Which Half Is Wasted?

The internet doesn’t understand the advertising business. Then again, neither do most advertisers.

Produced in partnership with NewcoShift.

After nearly 10 years of research and reading more than 150 economic works on the topic of advertising, I’ve come to understand that every value proposition of advertising has been severely degraded in the digital age. We’ve thrown out the social contract that made advertising moral, as more and more advertising money is spent on platforms rather than supporting news gathering. We’ve always had some version of this — advertising didn’t support just the news, but also Howdy Doody. The situation on the ground, however, is steadily worsening, and the news that once justified advertising is taking a smaller and smaller share of our ad dollars. There’s utility to platforms, of course, but the math has completely changed, and the industries involved — tech, advertising, and media — haven’t come to terms with it.

Like many people in the ad business, I’ve often wondered over the years about the morality of what we do. My economics courses taught me about “externalities” — events and phenomena outside an economic model that influence that model. I knew that externalities could be positive and negative. I was pretty sure economics viewed advertising as a positive…