10 Terrible Things About Adtech

David Carroll on 2017-01-09

Automated Arbitrage Algorithms Conditioned You to This Sensational Clickbait Headline

Anyone familiar with my research and commentary knows I’m no fan of adtech, the hidden layer of behavioral ad targeting arbitrage that monetizes attention by the proxy of impression-based economies of scale. The perverse incentives that ensue from this hidden code incentivizes unregulated marketing surveillance over the populace to glut their feeds with more worldview reinforcing hyperpartisan propaganda and disinformation than high-quality investigative journalism. Here are ten deeply concerning things about the world of adtech as I’ve been observing recently, especially thinking about election fallout.

  1. It’s terrible for buying attention. $1 ad dollar yields 3¢ of advertiser value.
  2. It’s terrible for selling attention. $1 ad dollar funds 45¢ of publisher revenue before adjusting for rampant fraud and blocking boycotts. Content creators probably earn pennies on the ad dollar after the fraudsters steal their share and savvy users block their share. No one really knows. Is it even worth it?
  3. It’s terribly fraudulent. The recently discovered Methbot fraud botnet stole millions per day and could have used a residential IP SaaS rental service illegimately as its sinister trick to evade fraud detection methods that sense IP clusters from data centers. Until law enforcement gets aggressive about combating the criminal ad fraud networks, we just don’t know for sure how bad it is out there.
  4. The terrible hyperpartisan and opinionated fringe sites use the same adtech as the mainstream media. They just use less of it. But make no mistake, adtech is the economic engine of the propaganda ecosystem unraveling liberal democracies while degrading the news business toward noise production rather than essential information.
  5. It’s a terrible national security issue. Russian-sponsored state media outlets RT.com and Sputnik.com were detailed by the DNI ICA declassified report as key to a Kremlin-directed attack on the 2016 US elections. Both of these Russian publishers use a mix of US and Russian adtech, analytics, beacons, and embeds. I feel like I’m the only person who has noticed this.
  6. It’s a terrible cause of privacy erosion. FTC sponsored a study determining that Americans have no idea how their data is collected and shared across their devices, apps, and services. The study exposes how our browser cookie IDs are promiscuously shared among hundreds of third-parties for unknown purposes. This indicates that US adtech cookie IDs may get shared with Russian adtech cookie IDs during the normal course of business.
  7. It’s terrible at self-regulating. Adtech self-regulation lobby Network Advertising Initiative joined the advertising and data broker lobbies to mount a shocking First Amendment defense of unlimited data collection to attack newly passed FCC Privacy Opt-in Rules. Adtech’s self-regulation lobby org (NAI (Ed. correction: DAA)) “AdChoices” program is poorly understood by users and contrary to their expectations, does not opt-them out from tracking, only targeting. US consumers have only one reliable method to prevent generating revenue from browsing activity on hostile foreign state media actors: install a blocker.
  8. It’s terrible the way it now shunts advertisers into the p0litical danger zone. At least 3 adtech companies and 450+ brands have blacklisted Breitbart from programmatic ad buying campaigns with the support of a pseudonymous group of industry insiders called Sleeping Giants. This is putting brands on notice and on the spot. Do they even understand programmatic? Are they willing to take a stand against racialized nationalism and risk abandoning Trumpist marketshare?
  9. It’s terrible when a candidate uses it for voter surveillance and suppression. Adtech was a key component of enabling the Trump campaign’s Project Alamo which inundated both GOP and Dem voters with surgically targeted “Dark Posts” that overwhelmed Facebook’s moderation and Federal regulatory capabilities. Expect more Cambridge Analytica psyop campaigns geared toward toppling the EU. That would have the net effect of nixing the GDPR, humanity’s best last chance to recapture its privacy rights of self-determination from surveillance capitalism.
  10. It’s terrible when two companies dominate the market. Adtech’s duopoly, Google and Facebook are too-big-to-fail but they’re at the heart of why liberal democracy is in crisis. Americans have little idea how much privacy they have lost and how their data is being used against their interests while empowering bad actors, for profit.

References and Notes

The references hyperlinked above are embedded here with additional notes.

1. Yield

Most would agree adtech is terrible as in dysfunctional, decrepit, subprime, and unfortunately the only reliable method of monetizing attention on the web. But economically speaking, how bad is it? It is even worth the trouble?

Display Ads: My 3¢ Worth My New Years day Type A Group Newsletter drew some attention. Being a lazy-ass bum, I thought I'd kick-off the blog…adcontrarian.blogspot.com

Advertising's Moral Struggle: Is Online Reach Worth the Hurt? The problem is, most advertisers do not have the size or the financial wherewithal of MasterCard to simply opt out of…nyti.ms

2. Fraud

Wanamaker’s Rule should be considered a law. Digital advertising’s original promise was to solve the 50% waste. Fraud and adblocking is the new breakage. But Wanamaker strikes back. You still don’t know where half of your ad spending goes. Where does the digital ad money go? Some recirculates within the industry as it looks the otherway, but plenty certainly flows to organize crime.

Ad fraud could become the second biggest organized crime enterprise behind the drug trade It may not make for a great Martin Scorsese film, but online ad fraud is growing into one of the biggest organized…mashable.com

Rethinking John Wanamaker [This is adapted from a post I made to a list I’m on, and then put up on my blog. Other parties are in italics. I’m not…medium.com

3. Methbot

An ad fraud operation at large enough scale finally caught the attention of the media engine it has been cheating.

Krebs on Security New research suggests that an elaborate cybercrime ring is responsible for stealing between $3 million and $5 million…krebsonsecurity.com

4. Adtech Signatures

In search of an objective mechanism to differentiate between legitimate news sources and “fringe” sites, Mezzobit discovered that a distinct adtech signature can be visualized and analyzed to prove it. I’ve theorized that this indicates how real news costs real money, forcing legit publishers to maximize their use of adtech to monetize their pages. Meanwhile, pure propaganda sites seem to use adtech as part of its camouflage to look legit.

Study: Ad-tech use shines light on fringe, fake news sites In particular, the study - from the New York-based startup Mezzobit - showed that such fringe news sites are relatively…www.sfchronicle.com

Study: Mainstream sites have almost double the ad tech as fake news sites - Digiday Study: Mainstream sites have almost double the ad tech as fake news sites The spread of fake and misleading news has…digiday.com

📌#Election2016 #FakeNews Compilation Something like Mr Robot meets House of Cards meets academic hackathon deep-data journalism. IDK. All open data and…medium.com

5. Adtech and Russian Election Interference

What sites were named by the US Gov report? How does this implicate the US adtech companies that participate in profiting and disseminating pages produced to undermine our democratic process?

What Intelligence Agencies Concluded About the Russian Attack on the U.S. Election The office of the director of national intelligence on Friday released a long-awaited unclassified version of its…nyti.ms

6. Promiscuous Tracking

Consumers do not understand how their devices are connecting their data across so many boundaries that defy their expectations.

Cross-Device Tracking: Measurement and Disclosures We are pleased to announce that OTech's research on cross device tracking has been accepted for publication in the…www.ftc.gov

7. Adtech Lobby Aggression and Deception on Consumer Privacy

The industry went “nuclear” on its intent to fight democratically enacted limits to its surveillance capabilities.

Ad Groups Petition Consumer Internet Privacy Rules, Call Opt-In Requirement 'Onerous' The major U.S. ad trade associations Tuesday evening jointly submitted a petition to the Federal Communications…www.mediapost.com

This is despite the fact that their self-regulation is an abject failure.

Not only is it confusing to consumers, but AdChoices is also deceptive.

8. Politics of Programmatic

Election fallout includes new attention and focus from consumers on the automated attention arbitrage markets called “programmatic” adtech. Consumers were never supposed to know that programmatic exists, let alone send screenshots of offending ads directly to brands on Twitter in outrage.

In response to complaints, some brands are pulling ads placed on Breitbart - Digiday Brands and the agencies that work for them are caught in a tough place when it comes to ads on so-called alt-right…digiday.com

How to Destroy the Business Model of Breitbart and Fake News "We're focused on Breitbart News right now because they're the biggest fish," a founder of Sleeping Giants told me. (He…nyti.ms

9. Adtech Powered Voter Surveillance and Psyop

There are adtech savants in the White House now. Can democracy survive a continuous onslaught of weaponized advertising?

Our Next President: Also Brought to You by Big Data and Digital Advertising Democracy & Government How the Trump campaign used big data to elect a president. By Jeff Chester | January 6, 2017 The…billmoyers.com

How the Trump Campaign Built an Identity Database and Used Facebook Ads to Win the Election There may be some fake news on Facebook, but the power of the Facebook advertising platform to influence voters is very…medium.com

The (dis)information mercenaries now controlling Trump’s databases Now that Trump, his SuperPACs and even their vendors have got a ton of data on every American, what could they do with…medium.com

German firms including BMW pull advertising from Breitbart Major German companies including BMW have stopped advertising on Breitbart, the rightwing US news and opinion site that…www.theguardian.com

10. Duopoly vs. Democracy

Did Silicon Valley trigger Trump? Was this not only the first post-truth election, but also the first post-privacy election?

Democracy is in crisis, but blaming fake news is not the answer | Evgeny Morozov Democracy is drowning in fake news. This is the latest reassuring conclusion drawn by those on the losing side of 2016…www.theguardian.com

In response to an article about translating Instagram’s privacy policy for parents

A lawyer rewrote Instagram's privacy policy so kids and parents can have a meaningful talk about… In Britain, more than half of 12- to 15-year-olds are on Instagram, according to OfCom (pdf), the country's…qz.com

But there’s still so much to learn about what can be inferred from our behaviors and how our data is used to construct our identities without our knowledge and control.

Thanks for reading.

You can request your data from Cambridge Analytica. Thanks to Paul-Olivier Dehaye for being on top of this.