by Tim Hwang
47. Alison McCarthy, “Millennials and YouTube Ads: Most Watch Until They Can Skip,” eMarketer, Jan. 6, 2017, www.emarketer.com/Article/Millennials-YouTube-Ads-Most-Watch-Until-They-Skip/1014979.
5. Inflating the Bubble
1. Ben S. Bernanke, “The Global Saving Glut and the U.S. Current Account Deficit” (remarks at the Sandridge Lecture, Virginia Association of Economists, Richmond, March 10, 2005), www.federalreserve.gov/boarddocs/speeches/2005/200503102.
2. Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (2011), 104, fraser.stlouisfed.org/title/5034.
3. Joint Center for Housing Studies of Harvard University, “The State of the Nation’s Housing, 2008,” www.jchs.harvard.edu/sites/default/files/son2008.pdf.
4. Martin Wolf, The Shifts and the Shocks: What We’ve Learned—and Have Still to Learn—from the Financial Crisis (New York: Penguin Books, 2015), chap. 5.
5. “eMarketer Releases New Global Media Ad Spending Estimates,” eMarketer, May 7, 2018, www.emarketer.com/content/emarketer-total-media-ad-spending-worldwide-will-rise-7-4-in-2018.
6. See, for example, Robert Seamans and Feng Zhu, “Responses to Entry in Multi-sided Markets: The Impact of Craigslist on Local Newspapers,” Management Science 60, no. 2 (Feb. 2014): 476–93. This article describes a 2013 study estimating a $5 billion loss to newspapers as a result of Craigslist.
7. Jasmine Enberg, “Global Digital Ad Spending 2019,” eMarketer, March 28, 2019, www.emarketer.com/content/global-digital-ad-spending-2019.
8. See “US TV Ad Spending to Fall in 2018,” eMarketer, March 28, 2018, www.emarketer.com/content/us-tv-ad-spending-to-fall-in-2018.
9. See Heather Connon, “Why Ninja Mortgages Could Wreak Havoc,” Observer (London), Sept. 30, 2007, www.theguardian.com/business/2007/sep/30/5.
10. See Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (New York: Viking, 2018), 49, which discusses the incentives of ratings agencies to be “helpful.”
11. Ibid., 70.
12. See, for example, Gretchen Morgenson and Louise Story, “Banks Bundled Bad Debt, Bet Against It and Won,” New York Times, Dec. 23, 2009, www.nytimes.com/2009/12/24/business/24trading.html.
13. See Michael Farmer, Madison Avenue Manslaughter: An Inside View of Fee-Cutting Clients, Profit-Hungry Owners and Declining Ad Agencies, 2nd ed. (New York: LID, 2017).
14. See, for example, Jeff Beer, “Why Ad Agencies Shouldn’t Fear Facebook’s Creative Shop,” Fast Company, April 12, 2017, www.fastcompany.com/40405239/why-ad-agencies-shouldnt-fear-facebooks-creative-shop.
15. Seb Joseph, “Ad Quality Rises to the Top of the Agenda for Media Agency Reviews,” Digiday, Jan. 20, 2018, digiday.com/marketing/ad-quality-rises-top-agenda-media-agency-reviews.
16. See Ken Auletta, Frenemies: The Epic Disruption of the Ad Business (and Everything Else) (New York: Penguin Press, 2018), chap. 1.
17. See Jessica Davies, “‘Data Arbitrage Is as Big a Problem as Media Arbitrage’: Confessions of a Media Exec,” Digiday, Dec. 11, 2017, digiday.com/media/data-arbitrage-big-problem -media-arbitrage-confessions-media-exec.
18. Jack Neff, “Former Mediacom CEO Alleges Widespread U.S. Agency ‘Kickbacks,’” AdAge, March 6, 2015, adage.com/article/agency-news/mediacom-ceo-mandel-skewers-agencies-incentives/297470.
19. “An Independent Study of Media Transparency in the U.S. Advertising Industry,” K2 Intelligence, June 7, 2016, online.wsj.com/public/resources/documents/Transparency.pdf.
20. Jessica Davies, “Confessions of an Ex-brand Global Media Chief: ‘It’s All One Massive Arbitrage System,’” Digiday, May 23, 2017, digiday.com/media/confessions-ex-brand-global-media-chief-one-massive-arbitrage-system.
21. Seb Joseph, “Two Years After the ANA’s Report, a Cloud Still Hangs over Media Transparency,” Digiday, July 16, 2018, digiday.com/marketing/two-years-anas-report-cloud-still-hangs-media-transparency.
22. Ross Benes, “Ad Buyer, Beware: How DSPs Sometimes Play Fast and Loose,” Digiday, May 25, 2017, digiday.com/marketing/dsp-squeeze-buyers.
23. Ross Benes, “‘We Go Straight to the Publisher’: Buyers Beware of SSPs Arbitraging Inventory,” Digiday, Feb. 16, 2017, digiday.com/media/ssp-arbitrage.
24. David Pidgeon, “Where Did the Money Go? Guardian Buys Its Own Ad Inventory,” Mediatel, Oct. 4, 2016, mediatel.co.uk/newsline/2016/10/04/where-did-the-money-go-guardian-buys-its-own-ad-inventory.
25. Ronan Shields, “Rubicon Project and The Guardian Resolve Legal Dispute over ‘Hidden’ Fees,” Adweek, Oct. 12, 2018, www.adweek.com/programmatic/rubicon-project-and-the-guardian-resolve-legal-dispute-over-hidden-fees.
6. Exploding the Bubble
1. See, for example, Shoshana Zuboff, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power (New York: PublicAffairs, 2019).
2. Ibid., chap. 10.
3. See, for example, Eli Pariser, The Filter Bubble: How the New Personalized Web Is Changing What We Read and How We Think (New York: Penguin Books, 2012).
4. Ethan Zuckerman, “The Internet’s Original Sin,” Atlantic, Aug. 14, 2014, www.theatlantic.com/technology/archive/2014/08/advertising-is-the-internets-original-sin/376041/.
5. James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven, Conn.: Yale University Press, 1999).
6. Erik Barnouw, A History of Broadcasting in the United States, vol. 3, The Image Empire, from 1953 (New York: Oxford University Press, 1970), 36–38.
7. See, for example, Gary Wolf, Wired: A Romance (New York: Random House, 2003), 107, noting that the rationale for requiring user registration was to “give sponsors exact information about viewers and eventually allow targeted advertisements to hit specific users.”
8. See, for example, Matt Haughey, “State of MetaFilter,” MetaTalk, May 19, 2014, metatalk.metafilter.com/23245/State-of-MetaFilter; Tavi Gevinson, “Editor’s Letter,” Rookie, Nov. 30, 2018, www.rookiemag.com/2018/11/editors-letter-86.
9. See Robert J. Shiller, Irrational Exuberance (Princeton, N.J.: Princeton University Press, 2000), chap. 7, which discusses the psychological role of “anchors” in determining market bubbles.
10. “About the NBER,” National Bureau of Economic Research, www.nber.org/info.html.
11. See Solomon Fabricant, Toward a Firmer Basis of Economy Policy: The Founding of the National Bureau of Economic Research (Cambridge, Mass.: National Bureau of Economic Research, 1984), 11, www.nber.org/nberhistory/sfabricantrev.pdf.
12. Michael Kaplan, “The Self-Consuming Commodity: Audiences, Users, and the Riddle of Digital Labor,” Television and New Media 21, no. 3 (Jan. 11, 2019), 240–59.
13. Lauren Johnson, “When Procter & Gamble Cut $200 Million in Digital Ad Spend, It Increased Its Reach 10%,” Adweek, March 1, 2018, www.adweek.com/brand-marketing/when-procter-gamble-cut-200-million-in-digital-ad-spend-its-marketing-became-10-more-effective/amp.
14. Jessica Davies, “After GDPR, The New York Times Cut Off Ad Exchanges in Europe—and Kept Growing Ad Revenue,” Digiday, Jan. 16, 2019, digiday.com/media/new-york-times-gdpr-cut-off-ad-exchanges-europe-ad-revenue.
15. Natasha Lomas, “The Case Against Behavioral Advertising Is Stacking Up,” TechCrunch, Jan. 20, 2019, social.techcrunch.com/2019/01/20/dont-be-creepy.
16. Roger Lowenstein, “Economic History Repeating,” Wall Street Journal, Jan. 13, 2015, www.wsj.com/articles/book-review-hall-of-mirrors-by-barry-eichengreen-1421192283.
17. See Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (New York: Aspen, 2003), 26–28.
18. Ibid., 34–35.
19. Ibid., 44–46.
20. Ibid., 31.
21. Ibid., 37.
22. See, for example, David Pegg, “The Tech Giants Will Never Pay Their Fair Share of Taxes—Unless We M
ake Them,” Guardian, Dec. 11, 2017, www.theguardian.com/commentisfree/2017/dec/11/tech-giants-taxes-apple-paradise-corporation-avoidance.
23. Seligman, Transformation of Wall Street, 44.
24. Ibid., 46.
25. Ibid., 39.
26. Ibid., 53.
27. Allen Ferrell, “The Case for Mandatory Disclosure in Securities Regulation Around the World” (Harvard Law and Economics Discussion Paper no. 492, Sept. 2004), www.ssrn.com/abstract=631221.
Epilogue
1. World Bank, Global Economic Prospects 2007: Managing the Next Wave of Globalization (Washington, D.C.: World Bank, 2006), elibrary.worldbank.org/doi/book/10.1596/978-0-8213-6727-8.
2. See Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (New York: Viking, 2018), 42–43.
3. Robert E. Lucas, Jr., “Macroeconomic Priorities,” American Economic Review 93, no. 1 (2003).
4. See, for example, Dipayan Ghosh and Ben Scott, “Facebook’s New Controversy Shows How Easily Online Political Ads Can Manipulate You,” Time, March 19, 2018, time.com/5197255/facebook-cambridge-analytica-donald-trump-ads-data.
Acknowledgments
I’d like to thank Moira Weigel, Ben Tarnoff, Jackson Howard, Emily Bell, and the teams at Logic and FSG, who encouraged me to write this book and offered invaluable advice throughout the entire process. I’d also like to acknowledge Adi Kamdar, whose collaboration with me on a 2013 paper about “peak ads” inspired many of the arguments contained in these pages. Finally, I’d like to extend a special thanks to Lea Rosen, whose tireless editing and frank feedback over the past year have sharpened my thinking and made the book orders of magnitude better.
A Note About the Author
Tim Hwang is a writer, lawyer, and technology policy researcher based in New York. Previously, he was at Google, where he was the company’s global public policy lead on artificial intelligence. Dubbed “the busiest man on the internet” by Forbes, Hwang focuses on the future of the attention economy and the geopolitics of computational power. You can sign up for email updates here.
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Contents
Title Page
Copyright Notice
Prologue
Introduction
1. The Plumbing
2. Market Convergence
3. Opacity
4. Subprime Attention
5. Inflating the Bubble
6. Exploding the Bubble
Epilogue
Notes
Acknowledgments
A Note About the Author
Copyright
FSG Originals × Logic
Farrar, Straus and Giroux
120 Broadway, New York 10271
Copyright © 2020 by Tim Hwang
All rights reserved
First edition, 2020
E-book ISBN: 978-0-374-72124-4
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