When I raise concerns about ad-driven business models, most people shrug. Some may even get defensive. Ads pay a lot of salaries. They pay for so much of the online world that we consider essential. So why kick the golden goose?
Hear me out. Ads themselves are mostly harmless. We might complain about some overly loud videos for medicines we don’t need, or when ad-laden webpages jump around like monkeys on cocaine. We might vaguely suspect our cell phones spy on our conversations (they rarely do).
If you’re visiting a giant free buffet every day, you probably aren’t going to complain about the occasional rubber shrimp. We’re all familiar with the relatively minor costs of ads to our user experience. But are we really considering the harms that arise when advertising so heavily pays our way? Where is all this “free stuff” coming from? How does it affect us?
“Half of the money I spend on advertising is wasted; the trouble is I don’t know which half.” — John Wanamaker
Ads are like Bets
Here’s a small idea to consider: advertisers are gambling on us.
They spend their budgets making ads and then bidding to place them. The better the ads succeed in engaging us, the more it may cost to sustain the campaign, but the more money that campaign will be worth in the end.
If ads don’t work on us, if they don’t get us to at least look at something, then those bets are lost, wasted. The old repeated joke goes: “Half of all ad budgets are wasted, but the problem is: we don’t know which half.”
But what if advertisers could improve the odds? What if they could figuratively “load the dice” or “count cards” to predict the probability of future events and ideally bet on the winners?
Personalization is one way to improve the odds. It works by tracking what we do — what we like and don’t like— to better predict ad results and make smarter bets. Personalization effectively maps our personalities to light up the probabilistic pathways to advertising success.
In old TV ad lingo, it’s “new and improved” (but not so new).
Early TV advertisers employed statisticians to select the shows with the most suitable demographics (e.g., “Male 25–35, college educated”) for their given products, say men’s suits. They polled audiences, after the fact, to measure effectiveness. This is how many TV shows were judged or even conceived: around target audience sizes, their spending habits and their susceptibility, and thus the relative dollars they could earn from advertising.
This happens much more rapidly now. It’s far more predictive and the insights are far more powerful.
And why shouldn’t we be happy to only see ads that match our interests?
That might be true, if the system was geared around our actual needs. But we’re not the ones paying for it, at least not directly. It doesn’t work for us.
Reform advocates like Tristan Harris call this modern ad-tech “voodoo dolls” because of its potential to influence our behavior, for the benefit of others.
Author and activist Cory Doctorow is a surprising critic of that claim. He dismisses this idea as “mind control rays.” Ironically, he uses the tools of rhetoric to attempt to persuade us that we are not so easily persuadable.
If I’m not persuaded by his argument, does that mean he’s right? Genius!
Meanwhile Facebook has funded a deluge of non-personalized TV ads designed to convince us why personalized ads are good for us.
What they really mean to say is that tracking is fundamental to how they make money, so please let them continue to do so, ok?
Cory also claims that ad-tech companies like Facebook overly hype their effectiveness so as to bilk the advertisers. The advertisers apparently have no way to verify which platforms get the best returns, which would be shocking if true.
I usually agree with Cory, and he’s certainly right that there are no “mind control rays.” People seek to influence us all the time: co-workers, friends, family, media, influencers, authors like Cory or me, magicians on a stage…
Occasionally, it works. Sometimes we buy the products we see in ads, or vote for candidates who grab our attention, or even listen to our mothers about putting on a coat. Sometimes we forward these very thoughtful Medium articles to our friends and co-workers (thanks, much appreciated). There’s ample evidence for this, even though we all see ourselves as totally rational actors, free from external influence.
Turns out, persuasion and manipulation don’t need to work all the time. It just has to work better than — and most importantly hold our attention longer than — doing nothing. Statistical laws decide the actual winners based on small advantages over time, as long as we keep on playing. And the evidence is very strong that ad-driven companies have gotten very good at engineering our totally voluntary need to stay.
Have you quit Facebook, Instagram, or WhatsApp (all the same company)?
Do you still use YouTube and Google? Are you hooked?
I can almost say I’ve quit them, but it’s exceedingly tough to go “cold turkey.”
We’re Going to Vegas, Baby!
That should be a hint. Picking up the gambling analogy, it’s not just that advertisers make bets on us. It takes two to wager. Advertisers, networks and ad-driven websites are more like casinos in this analogy.
They’re “The House.” And as we know, “The House always wins.”
The House has the power to set and enforce the rules. Its viability depends on winning. Houses that don’t win don’t last.
In Las Vegas, we choose with our tiny little feet where to go and what to do. We willingly enter a world designed to trigger our dopamine reward receptors that make us gradually but increasingly empty our wallets. We may realize this is happening and still rationalize it as “the price of having fun.”
[FYI, movies are fun too, but cost about $8/hr in theaters and upwards of $15/month online. Video games cost about $1/hour, roughly speaking.]
When we visit ad-driven websites, we’re entering the analog of Virtual Vegas, even if we never place any bets. We entered for the content: articles, memes, photos, and so on. But once there, there are myriad ways for the website or social network to entertain, retain and keep us inside, so they can make and win more of these bets about us.
In real casinos, if we lose too much, most of us would walk away. Yet some percentage of people get psychologically addicted. If we win consistently, it’s a thrill. But unless the stakes go up each time, winning constantly would provide less and less reward. And The House would shut us down soon anyway.
On the other hand, if we found the game was rigged, we might take political action or call the cops. We might ask the government to police casinos to keep it fair and mostly even. And here’s a hint: we do!
Yet the reality is that The House always wins, on average, over time, by a fixed known percentage. For Roulette, it’s 2–5% depending on the wheel.
Virtual Vegas doesn’t need to literally control our minds any more than real casinos need to stack their decks or load their dice. They just need us to keep playing for as long as possible. Even a small statistical advantage is huge when multiplied by a billion people over multiple years.
If ads never worked, they’d disappear faster than a game show about dirt. They need to work just well enough to keep pumping more money into the system, to pay for all the free stuff we consume. Hosting our cat videos and celebrity memes is like the endless buffets and light shows of real Vegas.
And we eat it up. The absolute most crazy part of it is this: all the money that flows into ads, into Facebook and Google, funding our endless “free” buffet, comes from us, the consumers.
Yes, I said it. The products we buy are padded to fund the ad budgets that make us want them more. It’s capitalism, baby! You thought the product manufacturers were taking a loss? No. There is no free lunch [buffet].
Virtual Vegas is more like real Vegas than we ever could have imagined.
Why do we Gamble so?
Looking to the brain, ads must give us some reward for them to work on us. It seems all too often about making us feel a positive emotion for some physical thing that carries and feels no such emotion. We crave these emotions.
Sometimes it’s all about fear — of what will happen if we elect this horrible person — or perhaps the fear of missing out, or FOMO. We fall prey to these.
I have friends who watch the Super Bowl just for the ads. They ignore the sports, yet light up at a new Pepsi commercial. Brands pay athletes millions of dollars to wear their logos. The rest of us pay these brands to help them advertise back at us? How crazy is that?
We’re already stuck in this cycle, conditioned by the intermittent dopamine and social status rewards, and fears, to keep on playing this game forever.
The most important thing to understand about casinos is what happens when they become the entire city, like actual Vegas, working to capture our money no matter what we do.
You may resist excessive gambling, but some people become addicted. You can limit your drinking, but some people can’t. I personally love rollercoasters and other rides. So Vegas has those to entertain people like me. For other people, it’s the free buffets and drinks that lure them. For others, it’s the shows, the glittering lights and an atmosphere of “anything goes.” Or all of the above. It doesn’t really matter except that it works reliably to extract our money.
When we sit at a computer, the advertisers and websites must pick the most compelling aspects of Virtual Vegas to grab us and keep us playing for them to make these small individual bets on our attention.
They do it better when they know which parts of Virtual Vegas will work on each of us. That’s targeted advertising.
They don’t yet know what specific products we want or need. But they will soon, once we finish automating our consumer lives. Smart refrigerator, or NARC refrigerator? That’s up to you.
Once they know this, why bother with advertising to us? Just give us a nice concierge shopping service that promises it will compare all options and bring us what we want faster or cheaper than the alternatives.
Say, isn’t that what Amazon promises? Yes. Amazon advertises too, but mainly to lure us through the doorway into their own massive casino.
Despite all this, we may be perfectly okay with there being casinos in real life, or a Virtual Vegas online. Most municipalities make gambling illegal, in true NIMBY fashion, due to the social problems it attracts. Yet Facebook is so prevalent that we may as well think of it as being in our back yard. Google, with its array of devices, may as well be considered inside our homes. These companies are in our daily lives, even where we try to steer clear.
In the relatively unique places like real Las Vegas, where consenting adults can make consenting adult choices, we still police the games and schemes so as to limit the harms. We audit the casinos to see if they’re cheating or laundering money. We put limits on this real-life dopamine-mining activity and offer addicts some needed help.
For online advertising, there is no such regulation, no audits, no help, and almost zero oversight. Why not? Why are we so afraid to examine and maybe, possibly rein in this golden goose?
Could it because advertising has indoctrinated us, convinced us that it is completely harmless, untouchable and essential to modern life?
Might we already be addicted?
We can and should take a sober look at the true impact of ads in our lives. We should account for the ways that ad-tech undercuts and drives out other, healthier business models, driving society to an unsustainable bottom.
But Wait, There’s More!
In old TV infomercials, we typically saw actors dramatically frustrated by their current products and oh so happy with the ideal new product being offered. There was always some final hook — a false urgency to pick up the phone (yes, phone) and order the damn product already. “Operators are standing by… For a limited time only... Act now while supplies last.”
Most people are not yet seeing what’s cooking in ad-tech and XR. When AR and VR become prevalent in our daily lives, say 5+ years from now, companies will map our personalities much more rapidly and effectively than ever before.
They’ll also customize our personal 3D environments, so as to influence us more subtly and effectively than ever.
I wrote a previous article to explain the technology under development to back up these claims, including some proposed remedies.
It’s no wonder that Facebook seems to be the biggest spender on R&D here. They have so much to gain and so much to lose if they’re constrained by competing (and more privacy-preserving) hardware.
They reassure us that we probably “won’t hate” how they place ads in VR.
Honestly, I expect that’s true. They can likely use our own psychological data to engineer it so that we’ll accept, perhaps even love, their interactive VR ads the way some people already love those superbowl ads. There’s too much at stake to leave it to chance, and so much room to experiment on what works better than old-fashioned, dumb by comparison, TV and web ads.
At some point, I expect these new ads will feature automated copies (aka “digital twins”) of our most trusted heroes, friends and family members, all personalized and working to convince us to buy whatever product just won the bidding war. It may be dramatically obvious, or it may be more subtle, registering just below the level of conscious concern.
Our collective will-power may well be sapped by then, too consumed by the free buffet of Virtual Vegas to complain much about anything.
So act now, while supplies last.