What Is to Be Done About the Ad-Based Internet economy?

ps: that’s an amazing story by the way!

It should also be said that news orgs tend to follow the pack a lot…

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To be completely honest, journalists aren’t the most “ahead of the curve” unfortunately.

Usually too busy getting the story.

@inge Thank you very much for sharing the Quartz story!

@Emily, is this maybe also of interest to you? What is your opinion of the role of advertisement or paywalls, or other solutions such as the “Öffentlich Rechtlichen” (tax money sponsored media) Medien?

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All media - social or otherwise - could be behind a paywall. That is how it used to be except for hobby BBS systems. I think I said it already, but as a reminder, the advent of domination by advertisements came from the web being tiny and kind of hard to get into compared to other systems that back then depended on a CD that had the program on it. AOL mailed those things out by the millions over the years. You loaded the program and bang - “you’ve got mail!”

Getting onto the web required at first that you have 2 different programs that you had to carefully configure loaded onto your Mac (which is what I had) and you had to have an account with an early ISP (Internet Service Provider). The big companies like ATT and Verizon didn’t offer that. In Europe forget it at first. Telecom was still in the dark ages with their PTTs, until the mass use of mobile phones.

In 1995 I was flown by Apple to New York and Los Angeles to give a talk in their big day-long event called the Apple Multimedia Road Show. The NY event was in a huge hotel right at Times Square. This is 1995 and I was the only person there talking about the Internet. Everyone else on the agenda was talking about CD ROMS. Can you imagine?

I I get up there and my first slide says “The Web is Like Rock and Roll.” And I said to them the Internet and the web was going to crash like a tsunami, and soon. Most in the crowd seemed to look at me sort of like, “huh?”

Anyway the point is that those of us with a lot of content to offer on the web (like news - we had a ton of it) had almost no chance of luring even modest numbers of people into paying for our initial product, especially if it was such a hassle and expense just to set up to use the thing when those CD services worked with a plain old phone line.

So, ads…going that route brought us big numbers over time. Then it became the train you couldn’t get off of.

Now with paywalls they are trying. But we still route around them whenever we can, seems like.

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And it should be said that a lot of people like the ads and they like them to be targeted. So maybe the ads aren’t the real problem, but rather the data they use to target the ads more closely. Do you know what is being collected? Did you give permission?

They totally are a problem. In the current ecological crisis, anything that increases consumption is a problem, no? And ads have been doing that since decades now, with all kinds of insidious techniques that exploit people psychologically …

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This takes us straight into value theory. Ad-based is good for business, but what is business good for? After all, the NGI initiative is out to build a human-centric Internet; we already have a business-centric one, and it leaves much to be desired.

A value theorist would say that an ad is an informational device that has value only if it contributes to the production of something of value. Matt has a point that many products bring negative value to the economy. For example, nothing good is going to come by consuming more carbonated drinks, so ads for them are also value destroyers.

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Who decides? I agree that much advertisement is for harmful things and consumption is way out of control. And it does beg the question; should a real internet of human values include business prosperity? In the USA, similar to money contributing to political campaigns, advertisement is seen as a right of free speech. I’m not sure that is the case in Europe.

But I have been wondering lately about this. Considering this is a project funded by the European Commission, in what I assume is an honest attempt to dig up worthy new approaches, is the intent for it all to be financed by the public through paying businesses either directly or indirectly and then the government just regulates it more, maybe a lot more?

That doesn’t sound very different from what we have now. That is just an incremental advancement, not a “next generation.”

This is a news story about how Finland deals with disinformation, AKA “fake news” by intensively educating kids from early age to be better critical thinkers. If we, as a population, think more critically, do we even need so much government interference? And is being educated to detect corporate propaganda different from being able to detect political manipulation?

To quote a line from the story, “The first line of defense is the kindergarten teacher.”

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The U.N., apparently. The System of National Accounting states what gets counted as part of the GDP and what does not. Fun fact: up until the 1970s, the profit of financial form was not considered wealth creation, and would not be counted as part of a country’s GDP. Finance was considered a necessary evil, that shifted value around, but did not create any. Banks lobbied hard for their profit to be considered as part of GDP… and won.

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Regarding critical thinking:

I was in the first generation of kids heavily bombarded with TV ads specifically targeted to us. “Hey kids - get Sugar Pop cereal - loaded with more sugar! Get these cookies, get this chocolate for your milk…” etc etc. I was one of armies of kids who dragged their moms to the cereal aisle begging for the cereal with the most sugar. It was all brainwash manipulation from TV ads. Luckily for me, my mom was a nutritionist and wouldn’t buy the stuff. Which I resented.

Now the ads are much more insidious, much more sophisticated. And kids figure out how to finger their way through the web with iPads before they can walk.

One thing I learned about advertisers running an ad-based website, is they always want more in the next round of ad buys. “Ok that’s good, but can you do more?” This is the root of today’s ultra-invasive advertisement based Net economy. The companies buying the ads see the Net as a targeting machine and they want more value for the money they spend. In a sense, it could be argued that FB and Google and their ilk are merely trying to satisfy this insatiable appetite.

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That’s a great piece of knowledge, never heard that before. I always assumed that GDP had a bit more science behind it than it actually does – if it’s possible to change it by lobbying, it’s not more than an arbitrary agreement …

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Do we look at advertising as a whole that’s a problem (as @matthias pointed out) - driving consumption. Or are there forms of advertising that could be more acceptable. Is the kind of products that are advertised (consumption focussed), or is the messaging (big data based decisions violating privacy)?

I think there are a few more distinctions we need to make to make this into a valuable discussion. Because what about sponsored content? An article in The Atlantic that is openly labelled as advertising and clearly written for Microsoft, but still a pleasure to read. A video by The Big Story sponsored by the National Tourist Agency of country X - the video is still interesting, I know it is advertising.

But perhaps even that is flawed. Because then there may be ways to manipulate it in such a way that we hardly know what’s sponsored and what’s not.

Or what about sponsored events? It is advertising, but also helping groups to organize something which otherwise would’ve been difficult (ok, I know we’re talking about the internet, but I feel this discussion is a bit broader even. or we should narrow it down?).

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Source is Mazzucato’s The Value of Everything. Actually, I recommend it, to everyone but to you, Matt, in particular. And of course it is an arbitrary agreement, when you think about it. Humans (who are different) need to agree on what is important, what has value. The book has a historical section: the physiocrats in 17th century France believed that only agriculture was “production”; an ironsmith would be an unproductive worker, a kind of service provider, whose living was underwritten by the farming class. In this sense, the ironsmith would be as useless to society as a duke’s valet (or the duke himself). Smith disagreed, and pointed out that manufacture is also productive, but disdained services, and so on.

So, the agreement on what has value and what does not has been evolving – which makes sense to me. It’s politics, and ethics, not science. It is also fitting that it should be encoded in a U.N. standard, since that makes the nature of GDP as a convention more transparent.

That said, a hardline marginalist economist would tell you that there is an element of science encoded in the current concept of GDP. This: under certain (highly restrictive) conditions, individuals are led by their preferences to transact on the market until they achieve their optimal mix of goods/services/leisure. In the process, prices form to carry information about the marginal social value of all goods and services. This is proven as the first fundamental theorem of welfare economics. It means that each transaction increases someone’s well-being. GDP, at its heart, is the sum of all transactions, net of double counting (intermediate goods are incorporated into final goods rather than counted, like in VAT calculation).

Other economists (including non-hardline marginalists like Stiglitz) are aware that, even if the math checks out, the first theorem requires certain conditions to hold, and these are not met in reality. So, the theorem itself is irrelevant to real life.

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I think of this in terms of value rather than acceptability. When I am browsing the Internet, do I want to see ads? Do they do something for me? Generally, no. They may be beautiful and creative and all that: that’s great. When I want to look at pretty pictures and clever videos, I will be searching for them. But if I am not searching for them, I don’t want to see or hear them. I prefer to be in charge: the same content may be ham or spam, depending on the context.

So, the idea here is: ads enable certain business models. But at the same time, they have costs. I remember @matthias saying that 90% of bandwidth is used to convey ad crap. If we did not have that, we could connect the world with a leaner, cheaper, more inclusive experience: no need for 5G, and probably for 4G as well (I have no source for this). I am interested in a rough cost–benefit analysis of ads: ads themselves, I would argue, are almost always on the cost side, even when they are beautiful, because they stand between us and the content we are trying to get to.

On the other hand, if you go to events like La nuit des publivores, ads become a good thing, the very thing you are looking for.

I am not a huge fan of advertising myself as well, and fully agree with you.

But the reason I mentioned it is that I am absolutely not against subscription-based services, unless they give the people with access a significant advantage (such a information, valuable connections, knowledge) over those who cannot afford those services.

But perhaps it could be more like “pay what you can”, tho how would that work? How do you proof income on a global scale?

What other systems can we think of that allows anyone the same access to information/knowledge/ connections/etc? Advertising so far has made that possible, the question is at what cost of course.

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The time-honored solution is public good provision, funded by taxes or whatever. If you think that the Internet is a public good, like education or health care or parks, then it becomes obvious. Of course, the question is: which internet is a public good? Wikipedia is easy to cast as a public service. But is watching football matches from your phone also a public service?

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