Gotcha!

We’ve all been hit by clickbait. You think you’re a click away from those hot new pics of Keanu Reeves shirtless on the beach, but instead you end up being pitched crypto by some mummy wearing a bath towel. What the Internet has shown is that advertisers will do anything — lie, cheat, and definitely steal — to grab your attention. And no one has been more successful at snatching our attention — and then getting rich off it — than Meta and Google.

At their core Google and Meta are ad-agencies — middle-men to companies who want to sell you crap. Doubt it? Check the numbers: Google gets 80% of its revenue from selling ads; Meta, a whopping 99%. In other words, these companies aren’t helping you find “friends” or providing all-inclusive cloud platforms, but tricking you to buy stuff. They’re 21st century Mad Men, sipping Soylent instead of scotch, and armed with tools of surveillance and manipulation that go far beyond even Don Draper’s wildest dreams. And they’re close to taking over the world.

As of 2021, 86% of the world’s Internet searches went through Google. Meta’s three apps — Facebook, Instagram, and WhatsApp — have 3.6 billion subscribers, or just over half of the world’s population and growing. Last year, Google and Meta raked in 67% of online and 42% of total ad-dollars. In other words, almost half of the world’s money used to persuade people to eat more naan, get a capoeira gym membership, or join a MLM went to just two companies. Two. All that ad-money pouring in has led to Google and Meta now being worth over $2 trillion dollars. For scale, that puts their market value somewhere between the GDP of Italy and France.

Given their size, it’s a misnomer to call Google and Meta companies. Together, with Apple and Amazon, they are the engines of a post-industrial global economy whose raw material is not timber or steel, but your attention in the form of likes, posts, and searches. This economy has grown so huge, so essential to commerce, that its refined product — data — has dethroned oil to become the world’s most valuable commodity. And the fuel that keeps this new attention economy humming along, the thing that turns all that data into dollars, is algorithmically targeted advertising.

That’s right, every time you click on that ad for CBD dog treats in your Instagram stories you are throwing some coal in Facebook’s furnace, doing your part to keep the wheels of industry turning. (And even if you don’t click, well…maybe someone, or something, will do it for you.)

Programmatic, algorithmically targeted advertising uses trillions of data points fed through artificial intelligence (AI) to create models of consumer behavior that predicthow you will theoretically respond to a given ad. To get this data, to learn about “you,” the consumer, companies like Google and Meta need to always stay one step ahead, to know what you want before you even do. It’s what social psychologist Shoshana Zubuff calls “surveillance capitalism,” an economic system centered around the capture and commodification of personal data. In this brave new world, you aren’t Big Tech’s consumer, you’re its product.

The basis of this economic system is the presupposed belief that digital advertising is more effective than just slapping a banner for Viagra on every sports gambling website. With the certainty of a medieval monk knowing how many angels can dance on the head of a pin, digital ad-savants claim a direct link between surveillance and advertising success — the more you know about a customer, the more you can manipulate their behavior, and therefore, increase sales.

But what if no one ever clicks on your ad for a new line of Sponge-Bob Square Pants lingerie or subscription-based dental floss start-up? What if the whole apparatus of surveillance and digital advertising — the financial structure that most of the Internet is built upon — is not as effective as everyone claims?

What if no is paying really paying attention?

Tommy Chong says throw out your CBD and buy this data analytics start-up

Over the last thirty years, companies like Google and Meta have sold investors on one thing: More snooping means more sales. But the results tell a different story. Google’s own data shows that only .42% of Google ads are actually clicked on. In a recent study of 500-million-users, Facebook had overestimated its advertising impacts by 4000%.

Despite massive market valuations, evidence shows demand just isn’t there — most people simply ignore digital ads, no matter how micro-targeted they are. A 2019 study of Australian men ages 25 to 44 found that targeted advertising performed slightly worse than just random guessing. In other words, the whole system of targeted advertising is basically bunk.

But failure isn’t always so bad. Instead of admitting defeat, Google, Meta, and other tech companies have doubled down on data harvesting. Because it’s not that the ads aren’t working, they just tell their investors “we need more data”.

In other words, success — by these companies’ own metrics — is not even possible. Instead, like Uber, WeWork, or other “growth” driven tech companies, digital advertising-based platforms are simply riding a colossal wave of speculative capital towards the ultimate goal of cornering their respective markets. As long as the money keeps pouring in, who cares if anyone actually clicks on those stupid ads?

And that’s just the demand side of the problem. On the supply side are the ad-markets, where companies bid for digital eyeballs on Facebook or YouTube in a highly complex, automated marketplace. These ad-auctions are the engine of the attention economy; the machine that refines personal data into a tradable asset. As pitched, they seamlessly match customers with products — your love of sea creatures with an ad for dolphin-free Bumble Bee-brand snack packs — by having advertisers buy ads that reach customers across websites or apps.

But like the financial markets they were originally modeled after, these secretive ad-auction markets are rife with fraud, wash trading, and rampant speculation. A 2014 study found that 57% of the ads purchased on Google were only “seen” by automated computer programs. Call it the wave of the future: “ads for androids”.

The scary thing is not necessarily that digital advertising may be a scam — we’re talking about an industry not exactly known for its honesty — but that so much of the Internet economy is funded by it. If you think the 2008 crash was bad, what till you see the Clickbait Collapse of 2027.

But to really understand how this all came to be, it’s important to look at how Google, Meta and other tech companies define your data. Because the origin of their profits, and the quantum leap that turns your scrolls into a profile, personal data into an asset, begins with a relatively recent, and philosophically suspect, definition of attention.

This is what happens if you spend 22 hours per day on social media

Stand up!

Attention — it’s a precious thing. And to most, no mystery. You’re giving this article it right now (well, maybe not). As the American philosopher William James said, “everyone knows what attention is.” Or at least, maybe they did before the Internet reduced its average span to microseconds.

Actually, most modern psychologists have no idea what attention is, or believe the term is so vague as to be useless. But advertisers desperate to capture the hearts, minds, and pocketbooks of consumers have found their own ingenious ways to calculate attention. And it all kicked off with television.

In the late 1940’s, the Nielson company developed the Audimeter, a device that would be installed in a family’s television set and record a week’s worth of programming on 16mm film. Randomly selected “Nielson families” were enticed to add the Audimeter to their TV in exchange for free services and repair (a hot commodity in the age of clunky, vacuum tube TV technology). At the end of every week, “TV Index” servicemen would round up film from the “black boxes” and deliver them to the Nielson company’s headquarters in Evanston, Illinois. There, the results would be tabulated and released as the Nielsen Television Index — a weekly report on what was watched, and who, more importantly, was watching it. The Audimeter ensured that even if Cleveland or Tacoma were leveled in thermonuclear war, the survivors could still dig through the rubble and know who was watching “Howdy Doody” while the bombs were dropping.

As primitive as it may seem, the Audimeter revolutionized advertising. What was once speculative, now became enshrined in data (albeit based on a relatively limited sample size). If you knew the demographics, income, and spending habits of your average “I Dream of Jeannie” watcher, you could theoretically predict a whole range of consumer habits. You could sell targeted advertising spots — chocolate bars and dresses to housewives watching “I Love Lucy” — and in doing so, fund television programming.

The Nielson ratings were the foundation of the TV advertising world for over half a century, but were still a primitive way of tracking consumers. In 1987, the ratings systems were improved by the introduction of a new “People’s Meter,” which transmitted information in real time back to Nelson via phone lines. It was another baby step towards a programmatic feedback-loop, but the real problem was with the medium itself: Television was fundamentally a passive medium, with little or no direct viewer interaction and limited ability to transmit more than just the most rudimentary information about television audiences. Counting eyeballs could only get you so far.

Without knowing who in a household was watching a program, targeted advertising was still mostly a guessing game. Instead of tailoring their ads to individuals, ad-men had to rely on brute projection, creating a fantasy world of limitless sex, power, and pleasure that was made to seem inseparable from reality. Their goal was not to mine, but to createdesire. You needed to show the hapless drone slurping Hungry Man over episodes of Alf, that what they really wanted, more than life itself, was an all-beef patty or less filling light beer.

The goal was to create a user that matched your product; build a reality and convince your viewers that they lived in it. You had to show everyone that they could not survive without more volume-producing conditioner, sleeker higher and higher-FI stereo systems, and crunchier and crunchier potato chips. Advertising was a hammer, instead of a scalpel. And the ultimate goal was — to crib Noam Chomsky — to manufacture consent.

However imperfect the Nielson ratings system was, it did one thing well: It quantified attention as a discrete thing — eyeballs to screens — which could then be turned into ad-dollars. But the rise of the Internet in the 90’s destroyed the clunky Nielson system. With the digital era, attention became more than just a weekly rating, but the basis for a new global economy.

This one trick makes predictive algorithms go crazy

Whereas television was fundamentally a one-dimensional, passive medium — you could only change the channel or turn it off — the Internet promised a whole new frontier of highly dynamic, real-time interaction. On any given website, there could be videos, essays, photos, chat spaces, games, ads, banners — a whole menagerie of interactive content to suck users in.

And the financial potential was there. In the beginning, the “information superhighway” beckoned venture capitalists with rosy visions of limitless future profits. The problem was, for the first decade of the Internet’s existence, nobody really knew how to make money off of it.

Beginning in the early 90’s, companies like AOL or Yahoo basically copied the old television formulas — throwing up ads matched to specific demographically targeted spaces in the hopes that someone would click on them. So, on CNN.com you’d see a banner for Rogaine and on MTV.com you’d get an ad for Mountain Dew; it was a simple, relatively easy way to fund a website. Anyone could toss some corporate banner on their website, get a few ad-bucks in return, and call it good.

All that changed with Google’s release of AdWords, Google’s digital advertising marketplace, in 2003.

In 2002, Google co-founder Larry Page was looking for a way to replace old-fashioned advertising sales teams with more efficient, software-driven systems. He hired Hal Varian, an economist, to develop an AI backed ad-auction program modeled after financial markets. On AdWords, companies would bid for advertising and then automated algorithms would match their ad to a targeted consumer base. When a company bought ad-space through AdWords, they would not know exactly where, when, or even if their ad would be shown. They had to trust AdWords, and assume that Google’s algorithms were effectively targeting their proposed demographics. It was an efficient, powerful solution to both advertise and fund websites on a large scale. Unfortunately, basing advertising on algorithms required some significant trade-offs.

First, AdWords needed a way to define attention, not as some floaty psychological concept, but as discrete action that could be translated into data. This data would then be used to create specific consumer demographics, creating a neat feedback loop that — as information accumulated — could grow ever more sophisticated targeting. Suddenly, attention became a commodity, a raw material made up of clicks, hovers, and scrolls that, once refined through the sale of target advertising, could be priced and sold. There was no need to pull black boxes, or tap phone lines; your customers’ attention was being tapped and sold to the highest bidder. It was this quantification of attention — from something that everyone somehow “knows” but can’t really pin down, into a quantifiable object and finally into discrete, marketable assets — that marked the beginning of the modern Internet economy.

Instead of waiting to dig through a stack of Nielson family reels, or guessing why Rogaine sales suddenly dropped after Golden Girls was canceled, Procter and Gamble or Rupert Murdoch could now theoretically see — in real-time — how effective their ads were. With this ability to micro-target customers, companies became more willing to pay for Internet advertising space, funneling more and more money in the early 00’s into Google and other start-ups.

And it seemed like a win-win for everyone. The public got “free” services like GoogleDocs and Facebook (founded in 2006); Silicon Valley got flooded with venture capital. And those that didn’t adapt — AOL and other subscription-based services — disappeared into the trash heap of history.

But eyeballs on screens weren’t enough. Like Victorian taxonomists, digital advertising demanded an endless collection of data and parceling of individuals into narrower and narrower groups. Each click needed to bring you, the user, that much closer to the perfect age, gender, ethnicity, sexual preference, and income level based hand lotion. Companies had to find more ingenious, and invasive, ways of turning your information into cash.

To do that, first you need constant engagement. The fact that social media platforms are designed to mimic casinos isn’t a quirk; they’re a feature of a system that needs to constantly suck at your attention, drawing as much information as possible to feed your consumer profile.

Take your typical lunch-break Instagram scroll. While you check out footage of Swiss supermodels wearing the hottest new designer jorts, Zuckerberg’s algorithms (cookies) are collecting your every scroll, pause, click, comment, and like. Each of these pings a signal, a little drip of attention that pools into a profile. Then, in the microseconds before you leave those jort pics to click on your favorite Whalestep song, software crunches that data to search for patterns. What these patterns reveal is a profile of “you” that it then uses to auction micro-targeted ad-spaces.

We’ve all seen the results. One minute you “like” a Facebook post about your friends’ favorite ice cream, the next you’re seeing ads for plus-size jeans. With a few eerie exceptions, it all happens so seamlessly, so invisibly, that most users accept, or are even unaware, of the implied trade-off. I get free, unlimited access to all the hottest Grogu memes on Facebook, and Mark Zuckerberg gets to show me a few ads. Seems pretty fair, right?

And that’s the pitch not only to you, but to the companies buying ad-space. They are paying for results — clicks, purchases, site traffic. If that means Facebook tracks sensitive personal information like your menstrual cycle, or gives your voting history to shady political actors, at the end of the day it’s all just ones and zeros, right? Because, you aren’t Meta’s customer, you’re the product. And how can a product have rights?

Tech companies reinforce you as the product, rather than consumer, by discussing their platforms as “data collection” or “data mining.” It’s clever PR, a way to subtly flatten all information — no matter how personal — into just another resource, like iron, oil, or wheat.

But these sneaky terms hide deeper ideological motives. Data mining implies that once personal information is harvested — for instance, if Facebook learns about your sexual preferences by snooping on your scrolling history — it is rightfully, and permanently, owned by the company whose platform you are using. We don’t own our deepest secrets because they can be measured on a quarterly report, or be used as another financial asset. Defining data as a resource, rather than a right, reinforces the belief that any reduction in its collection — such as reducing the surveillance capacity — is treated by companies like Meta as an existential threat.

In other words, terms like data mining conveniently obfuscate the true goal of surveillance-based digital advertising, and the attention economy it funds: to redefine individuals entirely within a technological, rather than political framework and in doing so, eventually commodify every aspect of their existence.

The fact is, when you scroll on Facebook, you are not being mined for data, but milked. Every time you click on your friends’ funny otter post, or clap back to your right-wing uncle about wearing a mask at the Starbucks drive-thru, ol’ Zuckerberg* is grabbing hold of your digital identity and taking a little squeeze — a few drops of data into a pail. That data is then collected, click after click, rant by rant, and processed by specialized machines — patented algorithms — into a wide variety of from your sweet dairy teat which are then sold at auction to distributors.

It’s through these auctions that Google, Meta, Twitter, TikTok and other advertising-based tech companies provide the liquidity for the modern Internet, undergirding the global attention economy that — at least on its surface — appears unstoppable.

But when you base an entire economic system on how many times someone clicks on gluten-free, cruelty-free condoms or shares a Grumpy Cat-Travis Scott mashup video, it’s worth asking: who cares?

Or, more importantly: who or what is buying all those ads?

These three things all cheaters and financial bubbles have in common

With automated ad-marketplaces, vendors like Google or Meta sell ad inventory to a pool of bidders in real-time. On the supply-side, buyers bid on the market they are trying to hit. They enter how much they are willing to pay, who they want to target, and how often they want to show their ads. On the demand-side, sellers set prices, rules for what advertiser eligibility, and other company-specific parameters.

All it takes is one — click! In microseconds, the ad-auctions seamlessly turn a customer’s search for “hottest taquito joint in Dallas” into a banner for your Brooklyn-based bluetooth-enabled yoga mats. It’s efficient, sophisticated, and widely successful. Or at least, that’s what everyone is meant to believe.

In reality, ad agencies and Big Tech have found plenty of ways to scam buyers out of their dollars, inflate ad-prices, and pump the digital advertising market to bubble-like levels.

Because online ad-auctions are so complex, most companies looking to market online outsource their bids to highly specialized intermediaries. These ad agencies act as brokers, helping — in theory — to get the best bids on the most effective ad-spaces. But often they engage in financial arbitrage, buying advertising space and then marking it up to their customers to artificially inflate the value of their ads. A 2020 study found that half of all online ad-spending went to such middle-men and that almost a third of the money spent on placing ads is completely untraceable.

But you wouldn’t know that if you were just buying a banner or two for your Puppy Rescue App on Instagram. In fact, you might look at the numbers — the boon of digital advertising is all that data, and it can show you exactly how many clicks or eyeballs your ads are getting — and see real product engagement. But behind the scenes, shady companies hire “click farms” of automated bots or low-paid humans to falsely pump ad engagement or use “domain spoofing” to make ad-inventory falsely look like it’s on a high traffic site. And you might have never had a chance to access the good ad-space. Online platforms give select buyers access to dark pools, or private marketplaces, where they can bid on the highest quality, least competitive ads. What all this does is inflate the value of targeted digital ads far beyond their actual value; you think you’re paying for a Times Square billboard, and really all you’re getting is a hobo holding a cardboard sign.

The scary thing is that all this waste and fraud doesn’t really matter. As long as money keeps pumping into it, and no one cares whether the thing works or not, the attention economy will grow and grow.

The top seven ways to rule the metaverse

Tech companies that rely on digital advertising are facing an existential crisis. They know, but can’t admit, that ads built on mountains of personal data are still no better than click-bait. But they still need to promise their investors something more: more users, or more clicks. More users means more addictive engagement; more clicks means more surveillance. We know, for a fact, how either option destroy democracies or concentrate power into unaccountable intelligence agencies.

The Metaverse is a delusional attempt to escape the limits of this economic model. It shows there’s nothing left to do but stick everyone in a veal crate with a VR helmet strapped to their head, milk them for every quanta of attention possible, to save the system from collapse.

Twenty years later, we know that digital advertising is mostly built on rainbows, unicorns, and a mountain of fraud. The fact is, targeted digital advertising will persist because it provides the liquidity to keep digital economies solvent, and acts as the backbone of a global surveillance system. It’s not going away. So how do we control it? Regulate ad-markets through the SEC, break up Big Tech, nationalize Google and Meta, replace Zuckerberg with a genetic clone of Grumpy Cat as Meta’s CEO — there’s plenty of options on the table, if only we, as a society, decide to actually start paying attention.

* It is literally Zuckerberg since he owns a commanding 51% stake in Meta.