Is Ad Tech the Next Internet Bubble?

This one’s not for skimming, y’all.

In this article, Gilad Edelman breaks down the message of Tim Hwang’s new book: Subprime Attention Crisis: Advertising and the Time Bomb at the Heart of the Internet.

That message? Microtargeted ads don't work and will eventually go the way of subprime loans.

“Microtargeting is far less accurate, and far less persuasive, than it’s made out to be, he says, and yet it remains the foundation of the modern internet: the source of wealth for some of the world’s biggest, most important companies, and the mechanism by which almost every ‘free’ website or app makes money. If that shaky foundation ever were to crumble, there’s no telling how much of the wider economy would go down with it.”

His solution? A “controlled demolition” of the business model:

“A sprawling marketplace representing hundreds of billions of dollars of wealth probably shouldn’t remain an ungoverned free-for-all; and replacing today’s opaque, monopolistic market with a transparent, regulated one might lead to more innovation in ad targeting and more competitive pricing.”

Nice timing, WIRED.

My take on what this means for publishers: The niche audience you’re creating has future value, especially if programmatic spending is determined to be more wasteful than profitable.

wired.com  

How Are Apple, Amazon, Facebook, Google Monopolies? House Report Counts The Ways

In case you missed it, last week’s House Tech Antitrust Report is, well, huge news.

“‘These four corporations increasingly serve as gatekeepers of commerce and communications in the digital age, and this gatekeeper power gives them enormous capacity to abuse that power,‘ a lawyer for the subcommittee’s Democratic majority said in a briefing with reporters.”

What kinds of changes will we see if the “structural separations” suggested in the Antitrust Subcommittee’s report are enforced?

“The recommendations, if enacted, could radically change how these companies operate. They could, for example, restrict Amazon from selling its own products in its marketplace, in direct competition with sellers who depend on the platform to reach customers. Google could be banned from using the data the Android operating system collects on users and other apps to refine its products. Facebook could, theoretically, be barred from acquiring another competitor, after concerns over how it bought rivals including Instagram and WhatsApp.”

Not surprisingly, the companies involved have been busy releasing statements (Amazon, Apple) in disagreement with the report.

npr.org