This is part three of an ongoing, five-part series. Part one, the introduction, is here. Part two, about breaking up ad-tech companies, is here. Part four, about opening up app stores, is here. Part five, about enshrining "end-to-end" delivery on social media, is here. Download this whole series as a single PDF.
The ad-tech industry is incredibly profitable, raking in hundreds of billions of dollars every year by spying on us. These companies have tendrils that reach into our apps, our televisions, and our cars, as well as most websites. Their hunger for our data is insatiable. Worse still, a whole secondary industry of “brokers” has cropped up that offers to buy our purchase records, our location data, our purchase histories, even our medical and court records. This data is continuously ingested by the ad-tech industry to ensure that the nonconsensual dossiers of private, sensitive, potentially compromising data that these companies compile on us are as up-to-date as possible.
Commercial surveillance is a three-step process:
- Track: A person uses technology, and that technology quietly collects information about who they are and what they do. Most critically, trackers gather online behavioral information, like app interactions and browsing history. This information is shared with ad tech companies and data brokers.
- Profile: Ad tech companies and data brokers that receive this information try to link it to what they already know about the user in question. These observers draw inferences about their target: what they like, what kind of person they are (including demographics like age and gender), and what they might be interested in buying, attending, or voting for.
- Target: Ad tech companies use the profiles they’ve assembled, or obtained from data brokers, to target advertisements. Through websites, apps, TVs, and social media, advertisers use data to show tailored messages to particular people, types of people, or groups.
This data-gathering and processing is the source of innumerable societal harms: it fuels employment discrimination, housing discrimination, and is a pipeline for predatory scams. The data also finds its way into others’ hands, including the military, law enforcement, and hostile foreign powers. Insiders at large companies exploit data for their own benefit. It’s this data that lets scam artists find vulnerable targets and lets stalkers track their victims.
Our entire digital environment has been warped to grease the skids for this dragnet surveillance. Our mobile devices assign tracking identifiers to us by default, and these unique identifiers ripple out through physical and digital spaces, tracking us to the most minute degree.
All of this done in the name of supporting culture and news. The behavioral advertising industry claims that it can deliver more value to everyone through this surveillance: advertisers get to target exactly who they want to reach; publishers get paid top dollar for setting up exactly the right user with exactly the right ad, and the user wins because they are only ever shown highly relevant ads that are tailored to their interests.
Of course, anyone who’s ever used the internet knows that this is hogwash. Advertisers know that they are being charged billions of dollars for ads that are never delivered. Publishers know that billions of dollars collected from advertisers for ads that show up alongside their content are never delivered.
And as to the claim that users “like ads, so long as they are relevant,” the evidence is very strong that this isn’t true and never was. Ad-blocking is the most successful consumer boycott in human history. When Apple give iPhone users a one-click opt-out to block all surveillance ads, 96 percent of users clicked the button (presumably, the other four percent were confused, or they work for ad-tech companies).
Surveillance advertising serves no one except creepy ad-tech firms; for users, publishers and advertisers, surveillance ads are a bad deal.
Getting rid of surveillance ads doesn’t mean getting rid of ads altogether. Despite the rhetoric that “if you’re not paying for the product, you’re the product,” there’s no reason to believe that the mere act of paying for products will convince the companies that supply that product to treat you with respect.
Take John Deere tractors: farmers pay hundreds of thousands of dollars for large, crucial pieces of farm equipment, only to have their ability to repair them (or even complain about them) weaponized and monetized against them.
You can’t bribe a company into treating you with respect - companies respect you to the extent that they fear losing your business, or being regulated. Rather than buying our online services and hoping that this so impresses tech executives that they treat us with dignity, we should ban surveillance ads.
If surveillance ads are banned, advertisers will have to find new ways to let the public know about their products and services. They’ll have to return to the techniques that advertisers used for centuries before the very brief period in which surveillance advertising came to dominate: they’ll have to return to contextual ads.
A contextual ad is targeted based on the context in which it appears: what article it appears alongside of, or which publication. Rather than following users around to target them with ads contextual advertisers seek out content that is relevant to their messages, and place ads alongside that content.
Historically, this was an inefficient process, hamstrung by the need to identify relevant content before it was printed or aired. But the same realtime bidding systems used to place behavioral ads can be used to place contextual ads, too.
The difference is this: rather than a publisher asking a surveillance company like Google or Meta to auction off a reader on its behalf, the publisher would auction off the content and context of its own materials.
That is, rather than the publisher saying “What am I bid for the attention of this 22 year old, male reader who lives in Portland, Oregon, is in recovery for opioid addiction, and has recently searched for information about gonorrhea symptoms?” the publisher would say, “What am I bid for the attention of a reader whose IP address is located in Portland, Oregon, who is using Safari on a recent iPhone, and who is reading an article about Taylor Swift?”
There are some obvious benefits to this. First things first: it doesn’t require surveillance. That’s good for readers, and for society.
But it’s also good for the publisher. No publisher will ever know as much about readers’ behavior than an ad-tech company; but no ad-tech company will ever know as much about a publisher’s content than the publisher. That means that it will be much, much harder for ad-tech companies to lay claim to a large slice of the publisher’s revenue, and it will be much, much easier for publishers to switch ad-tech vendors if anyone tries it.
That means that publishers will get a larger slice of the context ads pie than they do when the pie is filled with surveillance ads.
But what about the size of the pie? Will advertisers pay as much to reach readers who are targeted by context as they do when the targeting is behavioral?
Not quite. The best research-driven indications we have so far is that advertisers will generally pay about five percent less for context-based targeting than they do for behavioral targeting.
But that doesn’t mean that publishers will get paid less - even if advertisers insist on a five percent discount to target based on context, a much greater share of the ad-spending will reach the publishers. The largest ad-tech platforms currently bargain for more than half of that spending, a figure they’re only able to attain because their monopoly power over behavioral data gives them a stronger negotiating position over the publishers.
But more importantly: if ad tracking was limited to users who truly consented to it, almost no one would see any ads, because users do not consent to tracking.
This was amply demonstrated in 2021, when Apple altered iOS, the operating system that powers iPhones and iPads, to make it easy to opt out of tracking. 96 percent of Apple users opted out - costing Facebook over $10 billion dollars in lost revenue in the first year.
Unfortunately, Apple continues to track its users in order to target ads at them, even if those users opt out. But if the US were to finally pass a long-overdue federal privacy law with a private right of action and require real consent before tracking, the revenue from surveillance ads would fall to zero, because almost no one is willing to be tracked.
This is borne out by the EU experience. The European Union’s General Data Protection Regulation (GDPR) bans surveillance for the purpose of ad-targeting without consent. While the US-based ad-tech giants have refused to comply with this rule, they are finally being forced to do so.
Not everyone has flouted the GDPR. The Dutch public broadcaster NPO only used targeted ads for users who consented to them, which means it served virtually no targeted ads. Eventually, NPO switched to context ads and saw a massive increase in ad revenues, in part because the ads worked about as well as surveillance ads, but mostly because no one saw their surveillance ads, while everyone saw context ads.
Killing surveillance ads will make surveillance companies worse off. But everyone else: readers, journalists, publishers, and even advertisers will be much better off.