The Reason Targeted Ads Have Been So Effective - And Socially Devastating

The fact that messages can be targeted with greater precision does not mean the content is precisely true. JL

Siva Vaidyanathan reports in Slate:

For more than a century, no one knew if advertising worked. (Then) Google, Facebook, and Twitter would track every expression of desire, every social connection, and every move to generate vast collections of mineable behavioral data. This data helps them predict what you might want next based on what you have done before, what your friends want now, or what people very much like you have done. The damage to a healthy public sphere has been devastating. Citizens and regulators finally recognize the pervasiveness of the surveillance on which these systems depend. (And) there is growing concern that ad targeting might not work as well as assumed.

Don Draper once stood at a chalkboard in front of skeptical early-1960s Lucky Strike tobacco executives and sold them on a historically inaccurate slogan, “Lucky Strike: It’s toasted.” “Advertising is based on one thing—happiness,” said Draper. “And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams with reassurance, that whatever you are doing, it’s OK. You are OK.” Draper made the sale. Lucky Strike remained his client. But Draper was selling magic, not science. That’s why he spoke in poetry, not data.

For more than a century, no one knew if advertising worked, if it drove people who would otherwise not buy a thing to buy that thing. Companies had little choice but to engage expensive “creative” agencies like Draper’s fictional one. If they did not buy flashy, seductive ads in magazines, newspapers, television, or radio consumers might never learn their products existed, let alone whether they were superior to their competition.

When the second decade of the 21^st century began, Don Draper loomed large on cable television, selling a whole new set of Americans a set of nostalgic myths. His workplace politics were brutal and cruel. His family politics were brutal and cold. And his personal mythology, taking the identity of a fallen soldier in the Korean War, was the driving psychological factor to explain his motivations, and ultimately his madness.

Mad Men was a hot show at the dawn of the decade, spanning from 2007 through 2015, roughly overlapping with the Obama administration. “Look how far we’ve come,” the show told us. The phrase “sexual harassment” never appears in a Mad Men script because the show was set two decades before that concept entered common parlance.

The advertising industry that Mad Men portrayed was all myth by then, of course. Advertising had long ago mostly ceased to be about persuasion, stories, and—heaven help us—“happiness.” By 2011, advertising was on its way to being overwhelmingly efficient, uncreative, and cheap. It could not promise “happiness.” It could deliver immediate gratification, even for an urge you didn’t quite know you had.

As early as 2000, Google introduced small, simple, direct, and boring ads hitched to the keywords that people typed into the search bar. This revolution, where advertisers would only have to pay Google if a user actually clicked on the ad, delivered a solution to a century-old problem for companies trying to sell stuff: How do you run ads that reach people who might want your product, service, or candidate? More importantly, how can you avoid those many more people who are unlikely to care about what you have to offer?

Sheryl Sandberg departed Google in 2008 to make Facebook profitable. Dick Costolo left Google in 2009 to inject ad revenue into Twitter. And so it became clear that Google, Facebook, and to a much lesser extent Twitter would shape advertising and thus all commercial media for the foreseeable future.

These companies would master the practice of tracking every expression of desire, every social connection, and every move we make to generate vast collections of mineable behavioral data. This data helps them predict what you might want next based on what you have done before, what your friends seem to want now, or what people very much like you have wanted or done.

The prospect of data-driven ads, linked to expressed preferences by identifiable people, proved in this past decade to be irresistible. From 2010 through 2019, revenue for Facebook has gone from just under $2 billion to $66.5 billion per year, almost all from advertising. Google’s revenue rose from just under $25 billion in 2010 to just over $155 billion in 2019. Neither company’s growth seems in danger of abating.

The damage to a healthy public sphere has been devastating. All that ad money now going to Facebook and Google once found its way to, say, Conde Nast, News Corporation, the Sydney Morning Herald, NBC, the Washington Post, El País, or the Buffalo Evening News. In 2019, more ad revenue flowed to targeted digital ads in the U.S. than radio, television, cable, magazine, and newspaper ads combined for the first time. It won’t be the last time. Not coincidentally, journalists are losing their jobs at a rate not seen since the Great Recession.

It could be that, as holidays approach, these companies are getting less discriminating in their targeting strategies. After all, most of my discretionary purchases in December are meant for others, some of whom wear flats and pumps with regularity. Or it could be that Facebook is once again recalibrating its internal ad-targeting system, making note of what we ignore as much as what we click.

Meanwhile, there is growing concern that this sort of precise ad targeting might not work as well as advertisers have assumed. Right now my Facebook page has ads for some products I would not possibly ever desire. One is for the Oculus Go, Facebook’s own consumer-level virtual reality headset (“Experience virtual reality starting at just $199”). Another is for “Awesome Beer Lover Tee” (“A day without Beer is like … just kidding I have no idea”). I have never expressed the slightest interest in virtual reality. And I gave up beer around 2004, the year Mark Zuckerberg launched Facebook in his dorm room. The display ad in my news feed for leopard-skin-patterned pumps and flats doesn’t quite fit my profile either, unless Facebook really does know me better than I know myself.

The advertising ecosystem at the end of this decade remains opaque. It’s also under attack. Citizens and regulators have finally begun to recognize the pervasiveness of the surveillance on which these systems depend. The profitability of the surveillance economy has rendered Facebook and Google more wealthy and powerful than all but four or five global corporations. As anti-democratic forces learned over the course of this past decade how to hijack Facebook and YouTube to pump out hateful propaganda, they have leveraged the same data-driven targeting systems that make the companies rich. Saving democracy and human rights will have a lot to do with dismantling these surveillance and ad-targeting systems, whether or not they convince me to buy a virtual reality headset.