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

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 …


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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I think it’s a very noble idea, but rather hard to execute: who will pay through taxes - should a new international institution be set up similar to UN - or part of the UN - pay for it? And what about China and Russia and their aims to make a sovereign internet (https://codastory.com/authoritarian-tech/global-rise-internet-sovereignty/), which will inadvertently lead to a less equal and open world/internet. And the US-China tech-cold-war with Huawei and DJI isn’t helping either https://www.theverge.com/2019/5/21/18633744/dhs-alert-china-drones-dji-huawei. Meaning, how likely is it that all countries would be willing to join in together. And if not all countries, do others pay for those who don’t?

What? It’s how we got the Internet in the first place. Take Italy: the first entity who connected to it, laying the fiber for the first trunk of the Italian backbone, was CINECA around 1990-1991. That’s a not-for-profit consortium of unis, sharing computing resources; a sort of computing coop among universities. The telcos and tech sector were nowhere to be seen – busy burning CD ROMs. like @johncoate says above.

[brag] My company at the time bought from CINECA a connectivity paid service in early 1993. I think we were one of only 12 Italian companies to have a website.[/brag] :smile:

The same financing mechanism is also giving us health care, education, defense and art… why do you find it so unrealistic, @inge.

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I find it a bit unrealistic in a sense that I think Russia and China would not join - and possibly other dictatorships as well, making the case for them to “build their own -cut off from the rest of the world - internet” (https://codastory.com/news/russia-sovereign-internet-law-passes-2nd-vote/) even stronger. Yes, it is already happening, but if you’re asking them to pay for the internet of all, they’ll probably turn their backs?

And, I think that’s really not great for the people living in those countries. So, rather helping the world, it could be having the opposite effect.

But - hypothetically - I am totally for it. And if we’re ok with a divided internet - sure. But i’d personally rather see China remove the walls they’ve already built around their internet. And, at least now citizens can get around things and access content they want to, but this may become quite difficult if it’s pushed more behind walls.

FYI: not saying it’s not the answer, but I’m skeptical about how it would work would the two most powerful countries not join

Again, that’s what happened already. It was not Americans or Europeans that paid for the Russian backbone! It was Russians. They did not turn their backs, because the scientific and connecting uses were incentive enough to install the fiber, even without the app economy. Internet in Russia - Wikipedia

but then what about their recent moves actually turning away? Then is different from now

I think that does not have much to do with the financing model. It’s more of a national security/national sovereignty thing. Westerners are now (rightly) complaining about foreign interference into our digital discussion spaces. In countries like Iran, dissenters took to Twitter in the late 200s, and that must have felt like foreign interference from the point of view of the powers that be: like some foreign country giving all your internal troublemakers a communication channel that you are not prepared for. I was in Tunisia in 2010, just before the Spring, and the government had figured out how handy it was to have one single entry point for the backbone (from the Mediterranean, in the north). They were throttling the whole Internet with a blacklist of sites you were not allowed to visit. Early days, but the trend was clear: security and intelligence folks like digital borders.

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ok, so maybe I am pessimistic and they’ll be ok with joining in financially for a shared infrastructure. Because what Russia and China are building is, in my understanding, not just blocking off things, but building their own - but maybe my own understanding of how the internet is built isn’t sufficient to fully understand it.

Now, I understand the financing of the infrastructure, but how about content? Services? Who decides what should be funded? Kinda like a donor organization with an independent board that looks over grant proposals? Or with a community voting? Pref the latter probably, but then how can trolling, disinformation, etc be prevented?

Ugh, so many questions! :wink:

I think with China the government controls everyone already - what they can and can’t see, say or do. But the commercial channels between Chinese and European customers is something they would not want to break.

As for ads eating so much bandwidth, sometimes you can see it if you watch the URLs loading. It used to be much worse back when Doubleclick dominated the ad serving space. You clicked on a link to some (often news) site, and it would hang on loading the ads. Still does that a lot of the time.

as for sponsored content, in news there has always been what was called a “church-state separation.” Anyone reading a newspaper could immediately tell what was an ad of course, but other sponsored content had to be printed in a font clearly different from the regular news font, plus it would always say something like “special sponsored section.” A paper will still do that, but the websites often do not. And that is exactly what a sponsor wants. They do not see their job as upholding the integrity of news. Their job is to sell products and however they get there is fair game. And when you have salespeople who don’t get paid unless they serve the sponsor’s interest…well, you have todays reality.

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This is a conversation I would like to see more people in. Top of mind right now are the the crowd behind fixadtech as they have filed GDPR complaints about Real-Time Bidding (RTB) in the online advertising industry were filed today with Data Protection Authorities in Spain, the Netherlands, Belgium, and Luxembourg. One of the people driving it, Dr. Johnny Ryan testified today at the US Senate Judiciary Committee hearing on Understanding the Digital Advertising Ecosystem and the Impact of Data Privacy and Competition Policy.

But more than the opposition to it, I would like to know what alternative framings and approaches people are experimenting with. Especially ones that scale. During a recent event I heard about through @harryhalpin - I remember him making a point about the money being behind freedom/privacy enhancing solutions. And that building alliances that allow you to reach scale is crucial, and that this can often come from the very actors that are considered problematic. At the same event I came across Least authority which seems to have an interesting model that explores how to collect as little private data as possible by design/default in their software solutions. Have to dig up my exact notes, but that was what I took away from it.

Anyone looking at alternatives that we know of?

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To be a bit polemic here: I don’t think we need more news. News is what got it into the current mess. What we need is journalism, in the sense of researching, explaining, categorizing, reminding, and so on.

Alas, that is a lot of work, and the result is a lot of work to consume too - you have to read in-depth articles to fully grok a given topic, and given our increasingly complex world, things are only getting more complicated, not less.

The other side of the problem is time. We can only spend so much time per day consuming media. And while the global audience is pretty big, the “media consumption per day” is a finite resource. And journalism competes with music, games, movies, tv shows, books, theater, individual conversations & gossip, lack of time because people need to have three jobs, and so on.

And as now basically everyone can crank out content (watch me doing it right now, right here!), the competition for attention is getting even fiercer! Book authors not only compete with all the other media for attention, but they also compete with fanfiction, hobby authors, the giant backlog of already published books available for free on Project Gutenberg, and so on…

So even if you create top-notch content, entertainment, education or information, you need to get it out to people to see it. And then, yes, make money from it in some way too. And on both of these fronts, the competition is fierce.

Right now, the solution seems to be to make the content as tantalizing, attention-grabbing and as a result even controversial as possible, while at the same time attaching the ideal price tag of “free” to it.

The latter means that we finance through ads, and the former means that the content choices err on the side of flashy and/or controversial. And the ad-financing then reinforces the second choice, because more attention means more ad-money too!

Long story short: Ad-financing content is the worst! Really, it’s the original sin of the internet, and we should push it away as far as possible.