"Subprime Attention Crisis" is a new book by Tim Hwang that argues that the ad-tech market is a bubble created by an ad industry doing what it does best: convincing advertisers that it is really, really good at selling its products.



Think of department story magnate John Wanamaker's infamous "Half the money I spend on advertising is wasted; the trouble is, I don’t know which half' and consider what a sell-job he got from his ad-agency if he thought that ONLY HALF of his ad spending was wasted!


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Writing for Wired, Gilad Edelman praises Hwang's book, which identifies the huge share of ad spending that's siphoned off by the ad-tech industry, which has interposed itself between advertisers and publishers without delivering real value to either.

This is becoming increasingly apparent: consider the Dutch public broadcaster NPO, which swapped out "behavioral ads" (chosen by profiling you) with "contextual ads" (chosen by profiling the web-page it appears on):



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Not only did NPO see similar or better click-through rates on ads that were served without knowing ANYTHING about the user, but more users saw those ads because the ads didn't have to get through a tracker blocker.

And, to Hwang's point, these high-performing, highly visible ads each delivered double the money to NPO, because there was no scammy ad-tech industry in the middle raking off a 50% vig for behavioral analysis, real-time auctions and other socially useless smoke-and-mirrors.


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Hwang argues that this all adds up to a bubble, where the spending is coming from purchasers who don't know what they're buying - literally, as programmatic ads are placed in realtime, so advertisers don't know which publications run their ads or how they're displayed.


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As with every bubble, there's an army of associated huxters pumping away to keep the bubble inflated: ad agencies arbitraging between advertisers and publishers, ad-tech platforms touting their devastating accuracy, and a captured rating agency controlled by FB and Google.

And Hwang points out that ad-tech isn't standalone: it's integral to the entire tech industry, woven into Amazon, Google, FB and even Apple's platforms, subsidizing them and publishers.


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When that bubble pops, it will be systemic - like the crash of 2008, which revealed how mortgages had been turned into structural elements of the entire economy.

Hwang wants to avert this calamity with a controlled deflation, with researchers aggressively calling BS on ad-tech claims, and the creation of a better, less scammy advertising ecosystem.


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Based on this review, I just bumped Hwang's book to the top of my pile. It certainly seems complementary to my own recent short book, HOW TO DESTROY SURVEILLANCE CAPITALISM.


That book's core thesis is that Big Tech lies about the efficacy of its surveillance/persuasion products and achieves its dominance through common-or-garden monopolization of the sort that mediocre sociopaths have mastered since the days of the Rail Barons.


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That surveillance capitalism isn't a "rogue" capitalism, it's just "capitalism" - with surveillance, which it gets away with by creating monopolies that can capture their regulators and enmesh themselves in the national security complex.


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This isn't identical to Hwang's formulation, but it's not so divergent, either. From the review, I think the big difference is that Hwang doesn't call for a reinvigoration of traditional antitrust, nor for a renewed and muscular interoperability:



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