Are Creepy Ads Worth It?
Hi friends --
You've probably heard that the creepy ads that follow you around the Internet are the price you have to pay for all the free services online.
But what if the price is too high and there is another way? In my latest New York Times opinion piece, I explore the costs and benefits of the commercial surveillance model.
On the costs side:
The commercial surveillance model has devastated publishers, particularly in news where global ad revenue has plummeted from $107 billion in 2000 to $32 billion in 2022.
Commercial surveillance has allowed for discriminatory advertising and divisive political ads, and has been exploited by nation state actors seeking to influence elections.
A new study from Carnegie Mellon and Virginia Tech researchers finds that targeted display more expensive products and are twice as likely to be sold by lower quality vendors than identical products found in a simple web search.
A recent study from the European Commission says the cost to society of microtargeting may outweigh the benefits.
On the benefits side:
Online advertising revenues have grown to $540 billion market worldwide, dwarfing all other forms of advertising, including TV, radio and newspapers.
Google and Facebook are top beneficiaries with $200+ billion and $100+ billion revenues respectively.
Ad industry groups say that "responsible data-driven" surveillance business models create $30,000 in economic value for consumers.
When I dug into the $30,000 number I found that it was from a study published in 2019 that asked people what they would pay to not lose access to online services. Participants were willing to pay about $17,000 for search $8,000 for email $3,000 for maps.
But the funny thing about search and maps is that they are the last bastion of contextual advertising -- in other words, ads that are placed in relation to the content they appear next to rather than in relation to a profile of the user. And email is a freemium model, where the basic service is often free and companies make money on additional features.
I argue that the industry's own numbers show that contextual advertising can and should support our online life, rather than relying on creepy ads.
After all, in the age of AI, isn’t it time that we trained our powerful classification software on categorizing content for advertisers to place ads near rather than on classifying us?
Thanks for reading.
Best
Julia