Advertising and The Time Bomb At The Heart of The Internet


Have you ever really hit it off with someone until they casually say something that makes you physically recoil and ask yourself how you could agree on so much while holding such fundamentally different mindsets? That’s how I felt on page 81 of Tim Hwang’s critique of programmatic advertising, Subprime Attention Crisis (https://lnkd.in/d55HjuRX) and his interview with Ezra Klein (https://lnkd.in/dqCWAJui On a side note: I was struck by how often both Hwang and Klein use the word ‘interesting’ and how they use it.)

Hwang argues that the market for programmed serving of online ads shares ominous features with the pre-crash subprime mortgage market. By commoditizing opaque packets of “attention,” companies like Google, Facebook and their financial backers have recreated the same market conditions in which extremely low quality (i.e. risky) mortgages were inflated wildly in value until the truth came out and it all blew up. Similarly:

“The value of the attention packaged by online advertising is declining. Online advertising is increasingly ignored – or actively resisted – by the public at large. Second, the “attention” the ads do receive is increasingly garbage – the product of a massive, fraudulent economy designed to extract money from advertisers. Attention is sub-prime.”

At this point, I was saying, “Yes! That’s one reason why advertising has to become more interesting.” But just a couple of pages later, he lost me. He seems to believe that if ads aren’t persuading, they simply aren’t working. He derides brand advertising as largely an excuse for failure: “The vaporous nature of brand advertising means that the goalposts are perpetually moving: the objective of the advertiser may not be to drive any behavioural change that is actually measurable in any sensible time frame. It becomes hard to refute the effectiveness of advertising when the bar set so low.” (This is especially odd coming just after talking about Nike ads.)

There is solid research to show that brand advertising works within quite finite timeframes, but I suspect that Hwang’s legal-tech mindset has a blind spot for ad content. His attitude seems to be that ads is ads is ads and no one wants to look at them anyway. You might also say that no one wants to look at books or listen to music. Except when they do. “People read what interests them, and sometimes it’s ad.”

In summary, a great book to bring along to your annual budget meeting as long as you tear out one page.

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