Privacy is a huge topic in today’s world, and justifiably so. The worst part is that many of the companies abusing our privacy are doing so with the goal of enabling ever more targeted ads. The claim is, of course, that those targeted ads perform so much better that they’re worth both the extra cost to the advertiser and the ill-defined cost of living in such a society. But is that even true?
A Wired article by Gilad Edelman about former Google employee Tim Hwang’s forthcoming book, Subprime Attention Crisis, suggests not, citing a study that showed that ad platforms targeting Australian men between the ages of 25 and 44 didn’t perform enough better to warrant their price premiums. Another researcher says that it’s common for platforms and media agencies to credit ads for purchases that consumers would have made anyway. It’s bad enough that we’re losing our privacy to advertisers; it’s even worse that it’s not even effective. Not that this should be that much of a surprise. Have you ever thought, “Wow! This highly targeted ad has just convinced me to purchase this product that I totally wasn’t planning to buy otherwise.”
Hwang has plenty of other criticisms of digital advertising, pointing out that many ads load out of sight and are thus never seen, that ad blockers eliminate billions of dollars of potential revenue, and that the combination of poor placement and systemic click fraud resulted in over 50% of all display ad dollars being lost. The larger issue for Hwang is what happens when it’s discovered that the ad industry is wearing no clothes, given that Google, Facebook, and Amazon play such an outsized role in the total value of the US stock market.