02 Nov 2024

or we could just not

previously: Sunday Internet optimism

The consensus, dismal future of the Internet is usually wrong. Dystopias make great fiction, but the Internet is surprisingly good at muddling through and reducing each one to nuisance level.

  • We don’t have Clipper Chip dystopia that would have put backdoors in all cryptography.

  • We don’t have software patent cartel dystopia that would have locked everyone in to limited software choices and functionality, and a stagnant market.

  • We don’t have Fritz Chip dystopia that would have mandated Digital Rights Management on all devices.

None of these problems have gone away entirely—encryption backdoors, patent trolls, and DRM are all still there—but none have reached either Internet-wide catastrophe level or faded away entirely.

Today’s hottest new dystopia narrative is that we’re going to end up with surveillance advertising features in web browsers. They’ll be mathematically different from old-school cookie tracking, so technically they won’t make it possible to identify anyone individually, but they’ll still impose the same old surveillance risks on users, since real-world privacy risks are collective.

Compromising with the dystopia narrative always looks like the realistic or grown-up path forward, until it doesn’t. And then the non-dystopia timeline generally looks inevitable once you get far enough along it. This time it’s the same way. We don’t need cross-context personalized (surveillance) advertising in our web browsers any more than we need SCO licensesnot counting the SCO license timeline as dystopia, but another good example of dismal timeline averted in our operating systems. Let’s look at the numbers. I’m going to make all the assumptions most favorable to the surveillance advertising argument. It’s actually probably a lot better than this. And it’s probably better in other countries, since the USA is relatively advanced in the commercial surveillance field. (If you have these figures for other countries, please let me know and I’ll link to them.)

Total money spent on advertising in the USA: $389.49 billion

USA population: 335,893,238

That comes out to about $1,160 spent on advertising to reach the average person in the USA every year. That’s $97 per month.

So let’s assume (again, making the assumption most favorable to the surveillance side) that all advertising is surveillance advertising. And ads without the surveillance, according to Professor Garrett Johnson are worth 52 percent less than the surveillance ads.

So if you get rid of the surveillance, your ad subsidy goes from $97 to $46. Advertisers would be spending $51 less to advertise to you, and the missing $51 is a good-sized amount of extra money to come up with every month. But remember, that’s advertising money, total, not the amount that actually makes it to the people who make the ad-supported resources you want. Since the problem is how to replace the income for the artists, writers, and everyone else who makes ad-supported content, we need to multiply the missing ad subsidy by the fraction of that top-level advertising total that makes it through to the content creator in order to come up with the amount of money that needs to be filled in from other sources like subscriptions and memberships.

How much do you need to spend on subscriptions to replace $51 in ad money? That’s going to depend on your habits. But even if you have everything set up totally right, a dollar spent on ads to reach you will buy you less than a dollar you spend yourself. Thomas Baekdal writes, in How independent publishing has changed from the 1990s until today,

Up until this point, every publisher had focused on ‘traffic at scale’, but with the new direct funding focus, every individual publisher realized that traffic does not equal money, and you could actually make more money by having an audience who paid you directly, rather than having a bunch of random clicks for the sake of advertising. The ratio was something like 1:10,000. Meaning that for every one person you could convince to subscribe, donate, become a member, or support you on Patreon … you would need 10,000 visitors to make the same amount from advertising. Or to put that into perspective, with only 100 subscribers, I could make the same amount of money as I used to earn from having one million visitors.

All surveillance ad media add some kind of adtech tax. The Association of National Advertisers found that about 1/3 of the money spent to buy ad space makes it through to the publisher.

A subscription platform and subscriber services impose some costs too. To be generous to the surveillance side, let’s say that a subscription dollar is only three times as valuable as an advertising dollar. So that $51 in missing ad money means you need to come up with $17 from somewhere. This estimate is really on the high side in practice. A lot of ad money goes to overhead and to stuff like retail ad networks (online sellers bidding for better spots in shopping search results) and to ad media like billboards that don’t pay for content at all.

So, worst case, where do you get the $17? From buying less crap, that’s where. Mustri et al.(PDF) write,

[behaviorally] targeted ads are more likely to be associated with lower quality vendors, and higher prices for identical products…

You also get a piece of the national security and other collective security benefits of eliminating surveillance, some savings in bandwidth and computing resources, and a lower likelihood of becoming a victim of fraud and identity theft. But that’s pure bonus benefit on top of the win from saving money by spending less on overpriced, personally targeted, low-quality products. (If privacy protection didn’t help you buy better stuff, the surveillance companies would have said so by now.) Because surveillance advertising gives an advantage to deceptive advertisers over legit ones, the end of surveillance advertising would also mean an increase in sales for legit brands.

And we’re not done. As a wise man once said, But wait! There’s more! Before you rush to do effective privacy tips or write to your state legislators to support anti-surveillance laws, there’s one more benefit for getting rid of surveillance/personalized advertising. Remember that extra $51 that went away? It didn’t get burned up in a fire just because it didn’t get spent on surveillance advertising. Companies still have it, and they still want to sell you stuff. Without surveillance, they’ll have to look for other ways to spend it. And many of the options are win-win for the customer. In Product is the P all marketers should strive to influence, Mark Ritson points out the marketing wins from incremental product improvements, and that’s the kind of work that often gets ignored in favor of niftier, short-term, surveillance advertising projects. Improving service and pricing are other areas that will will also do better without surveillance advertising contending for budgets. There is a lot of potential gain for a lot of people in getting rid of surveillance advertising, so let’s not waste the opportunity. Don’t worry, we’ll get another Internet dystopia narrative to worry about eventually.

More: stop putting privacy-enhancing technologies in web browsers

#