Digital Advertising: A Business Model That Is Hurting Our Institutions and Our Society
It’s no secret that the Silicon Valley dream of building an online utopia didn’t turn into what the architects of the early day web had once hoped to achieve. With pop-up ads, pull-to-refresh, clickbait, and addictive ecosystems built by tapping into our ‘lizard brains,’ we’ve managed to create an undemocratic digital world that is unresponsive to the needs of the citizenry and modern-day democracies.
Much of the challenge we’re facing in the digital world is as a result of the advertisement model, mastered by some of the most important and powerful forces of the world in the modern era–social networks and media platforms.
In an Op-Ed piece, the Times columnist, David Brooks wrote: “Tech companies understand what causes dopamine surges in the brain and they lace their products with “hijacking techniques” that lure us in and create ‘compulsion loops’.” Through directly tapping into our limbic system, these platforms try to keep our attention for as long as possible. In a report titled “Digital Deceit,” Dipayan Ghosh and Ben Scott, write “the central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising.” With almost no regulatory limitations, the stake in the battle for our attention keeps increasing (e.g., video autoplay). The math is simple, the longer you stay on their platform, the more ads you see, allowing them to make money off your attention.
The spread of Web 2–the period in which the internet became an interactive space, allowing for user-generated content and participatory culture–allowed for new possibilities while provide the infrastructure necessary for the rise of Facebook, Uber, Airbnb, blogs, and thousands of applications, changing our lives and how the world operates. At the same time, it centralized power in the hands of a few corporations, such as FANG–Facebook, Amazon, Netflix, and Google.
The major tech corporations are collectively worth trillions of dollars, and they generate much of their profit through advertisement, especially Google and Facebook. The problem is that as users, not only do we not receive any payment for our contribution to these ecosystems, but we also don’t have any say in how they operate. These ecosystems aren’t just some random platform anymore, they are in many ways public infrastructure. Many companies require job applicants to provide links to their Linked and GitHub accounts, and in countries such as Myanmar, most of what the internet is used for is Facebook.
The fact the citizenry have to use platforms that don’t compensate them at all for the revenue they bring to the platform, in addition to being undemocratic is just where the problems begin. In an article in the Times, Farhad Manjoo writes:
“[T]he online ad machine is also a vast, opaque and dizzyingly complex contraption with underappreciated capacity for misuse — one that collects and constantly profiles data about our behavior, creates incentives to monetize our most private desires and frequently unleashes loopholes that the shadiest of people are only too happy to exploit.”
As I wrote in an earlier article on Digital Identity, Facebook’s data policy allowed them to share your information (and that of your friends) with Aleksandr Kogan–who subsequently made them available to Cambridge Analytica, for political purposes. These realities make it clear that the advertisement model isn’t serving the needs of the citizenry or modern-day democracies.
As the Harvard Business School scholar Shoshana Zuboff wrote in her book, Surveillance Capitalism: “At its core, surveillance capitalism is parasitic and self-referential. It revives Karl Marx’s old image of capitalism as a vampire that feeds on labor, but with an unexpected turn. Instead of labor, surveillance capitalism feeds on every aspect of every human’s experience.”
In an interview with the Intercept, she said:
“Now we have markets of business customers that are selling and buying predictions of human futures. I believe in the values of human freedom and human autonomy as the necessary elements of a democratic society. As the competition of these prediction products heats up, it’s clear that surveillance capitalists have discovered that the most predictive sources of data are when they come in and intervene in our lives, in our real-time actions, to shape our action in a certain direction that aligns with the kind of outcomes they want to guarantee to their customers.”
The advertisement business model requires companies to make decisions based on incentives that are ultimately toxic to society, however, there are platforms and organizations working towards solving these challenges. Medium, for example, has designed a business model that only serves their users–writers and readers. In a public letter, the founder and CEO of Medium, Ev Williams, wrote:
“[I]t’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other ‘content’ we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.”
“We believe people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.”
The good news is that there is hope for change. As Web 3 technologies grow, they will allow for radical changes in how we interact with the digital world. Blockchains will democratization and decentralization of traditional digital ecosystems (e.g., Spotify vs. Ujo Music). And, Micro-payments made possible by a native internet currency (e.g., Bitcoin), will allow content producers and media companies to receive payments directly from the consumer of their content, in platforms with no central authority. We have the technology and creativity to create better incentive and business models, ones that serve the people and the democratic institutions our forefathers built over centuries, all we lack is the will to act.