There's a tendency to be like, well, of course they would have a mind control array, because that's kind of the most dramatic thing to be fighting. Whereas I think we should be asking, like, in a world where that stuff doesn't even work, are there still reasons not to want what they're doing?
SPEAKER_00Hello and welcome to Tech Won's Save Us. I'm your host, Harris Marks, and this week's guest is Tim Wong. Tim is a writer, researcher, and former global public policy lead for artificial intelligence and machine learning at Google. His new book, Subprime Attention Crisis, Advertising and the Time Bomb at the Heart of the Internet, forms the core of our conversation. And we discuss how even though we see ads everywhere we look online, that doesn't mean that the business model at the core of digital advertising is sound or will stick around into the future. The financialization of digital ad markets has created a real threat to their future, but also an opportunity for us to imagine a better future for the Internet. Tech Won't Save Us is part of the Harbinger Media Network, a new group of left-wing podcasts out of Canada. Another of the great shows on the network is Alberta Advantage, which delves into the deeply conservative politics of Canada's leading oil province and provides a really great analysis not only of what's happening in that province, but nationally in Canada. As always, if you like this conversation, please leave a five-star review on Apple Podcasts and make sure to share it with any friends or colleagues or on social media so other people can see that you're enjoying the show. And if you want to support the work that I put into making this show every week, you can go to patreon.com slash tech won't save us and become a supporter. Enjoy the conversation. Tim, welcome to Tech Won't Save Us. Yeah, thanks for having me on, Paris. You have this fantastic new book coming out this week called Subprime Attention Crisis. I think it really provides this critical and necessary insight into the digital ad industry and what's actually going on there and kind of dispels some of the myths that we really have about digital advertising, right? And so I wanted to start. We visit so many websites on a day-to-day basis and they're coded in ads. So can you just give us an idea of how integral digital advertising is to the business model of the modern web?
SPEAKER_01You know, I think it's worth going back to the kind of bad old days of the internet uh in the 90s, right? And, you know, it's uh kind of hard to remember, but like at the time, people were not sure how the internet was going to make money, right? Like you had these businesses that were growing extremely, extremely quickly. But the question of like what a sustainable business model on the internet look like was like a huge question mark. And really the sort of answer that we have landed on, the sort of financial engine that has kind of driven the internet over the past two, three decades is advertising. And I think the book really points out it's not just advertising, but a very particular kind of advertising, which is known in the industry as programmatic. And this is effectively the idea that in order to sell a large number of ads, you can't just do it by hand, right? You can't have a person be like, hey, Paris, would you like to buy this ad? And for you to say, yes, I would like to buy a Tim at this price. Instead, what we have is a large system, some might call it sort of a high frequency trading system, where algorithms basically interact in the buying and selling of attention. And this has turned out to be the cornerstone for how the biggest, most powerful technology companies in the world make money, right? You look at Facebook, you look at Google, despite, you know, the self-driving cars and the robots and the VR, you look at their financial statements, what they file with the SEC quarter after quarter, and it's the same. The advertising constitutes some supermajority of their revenue. So it really is core, not only to sort of these key sort of services online, but also, I mean, you know, your favorite media company, right? Your BuzzFeeds of the world, your New York Times of the world, they're also funded through exactly the same system. And so it really is a critical piece of shaping, I think, the modern web.
SPEAKER_00I want to pick up on that point there about the shaping of the web. One thing I found really interesting about the book, and I had thought about it a bit previously when I had read Joanne McNeil's book, Lurking, about kind of how the web has evolved. And in your book, you explain how that evolution of the web has also been influenced by the ad model because that is how money is made. So, can you give us some examples about how that business model has affected how the platforms and websites we use have been designed and are made to sell ads, essentially?
SPEAKER_01The way to think about it is really ads or the economics of ads are effectively a way of seeing everything on the internet. You can almost read the internet through the lens of ads. That's how critical it is to understanding how the internet is designed. And there's a couple examples I give in the book, but I think it reaches down to just like the most basic kinds of interactions and sort of features that we have online, right? So consider the like button, right? Something that we just have that is just ubiquitous in every single service now, right? Uh whether or not you're a Spotify or a Facebook, you know, like the ability to just say, like, I like that and push a button is something that's just default. And the main reason that you have a like button is largely to create more measurable engagement with content. And that's directly related to the ability to try to tell whether or not content is engaging and whether or not ads are engaging. And I think that's really interesting. Like this like way we interact with one another online is like almost purely defined or motivated in some ways by kind of like the financial incentive of advertising. The other one is the profile, right? The Facebook profile. Why do you have a profile? Well, one reason is you submit all of this demographic information that's very useful for ad targeting. And again, like this very fundamental building block of how we design social media, for instance, is really deeply embedded with the kind of economics of advertising. And so I really see it as kind of reaching down to like almost everything you look at. You can take a step back and say, well, there's a justification from this from a user standpoint, but like what is the advertising standpoint? And I think quite often you can quickly find a justification.
SPEAKER_00Even just comparing like MySpace to Facebook that we have today, right? And there was so much more kind of customization and stuff that could happen on MySpace, whereas Facebook is very much like you input your information, but there's not really much customization to your profile other than like changing out your picture and some of that information that, as you say, like really helps them target you more effectively, right?
SPEAKER_01Yeah, and I think that's right, is like I do think that you know the progression on the internet has been finding cleverer and cleverer ways of like structuring data effectively, both for targeting advertising and then measuring the effectiveness of advertising. So I I mentioned this in the book, but uh, I'm a big fan of uh seeing like a state. And one of the core concepts there is what Scott calls legibility, effectively the idea that in order to administrate a system, you often have to kind of shape the world to make it administrable. And he's really much, very much talking kind of in the context of like the government, right? But I think it actually applies with equal force here in the world of business and in the world of advertising, which is like in order to make ads measurable, in order to have a clear result, like, you know, 20% of people clicked on this ad, we have to sort of shape the world in order to allow us to do those types of measurements. And I think the kind of legibility process is actually really core to how these systems are designed.
SPEAKER_00You know, that really gets to the core of the book, right? Which is illustrating how these digital ad markets, these programmatic advertising markets, have been designed to kind of mimic financial markets because that measurability is really essential to being able to kind of trade a product effectively, right? So can you kind of describe the similarities between what we see in financial markets and then what we also see in digital ad markets?
SPEAKER_01I really again approach this from the perspective of thinking about these things as markets, which is whether or not you're trading grain or you're trading ads or you're trading, you know, any commodity you could imagine. We can actually look to the history of marketplaces as a way of thinking about how sort of the internet marketplace for attention came to be. And I do think that the kind of act of commoditization, the act of standardization is really key in this, right? Because think about what advertising is really buying and selling. You, Paris, buy an ad on my site and I deliver some amount of attention to you. Well, just that statement raises some questions. Like, what is an attention? Like, how do we measure an attention? And so we need to basically create packageable units for you to be able to buy and sell, right? And it's particularly necessary in a world where we need to sell billions of pieces of advertising inventory in an hour or over a course of a few days. And so I think one of the intriguing things is to kind of argue that the sort of development of these highly liquid capital markets, right, in say stock markets or in commodities, actually is a map for thinking about what's been happening to the sort of attention marketplace. One of the stories I get into is sort of like the story of kind of commodity markets, right, and grain and how you went from basically like grain that belonged to a particular type of farmer to grain that was just like a general commodity that could be sort of bought and sold. And I do think that that is actually effectively what we have on the internet now, right? That effectively you your attention has sort of been packaged in ways that allow it to be bought and sold in a very seamless way. So I think that's one point of similarity. A second kind of similarity which I point to in the book, which I think is interesting, is that it's possible that for all of the energy we put into designing these systems, that the root of it might ultimately be built on nothing. And of course, the name of the book, right, kind of points back to the 2008 financial crisis where you have these highly, highly developed markets with people who basically claim that they are masters of the universe as far as collateralized debt obligations are concerned. And kind of the argument of the book is, yeah, maybe we're ending up in that same place in advertising, right? Where we have people who have like, we have all the data, we have these sophisticated systems for buying and selling attention. How could we not succeed? Right. And sort of the claim of the book is, well, we actually have a lot of evidence of other cases in which like those claims turned out to be basically bonk in the end.
SPEAKER_00When I was reading it, I was thinking a lot about the discussions that are really ongoing and have come back into the news and the public discourse about the power of programmatic advertising, of algorithms to deliver information, like all these sorts of things, right? And there is this kind of scare or hype about the power that they might have to kind of change how people think, right? I think that they do have an effect in the sense that every communication technology has been able to kind of make us see things in a certain way, right? But I think what your book does is it illustrates that maybe we shouldn't take the marketing speak or the sales copy of these companies completely at face value and should look a bit deeper into what is actually happening there to understand whether it has the power they claim it has, right? That serves their ability to sell more ads. So, what are some of the issues that we see when we look at these ad markets and whether they are as effective as, you know, say Google or Facebook would like us to believe?
SPEAKER_01I think on your first point, you know, it's so interesting. I was just thinking about the um, so there's this report that the UK privacy regulator released yesterday on the Cambridge Analytica scandal. And I think one of the most interesting things coming out of that, to quickly reiterate, right? So you have Cambridge Analytica, they collect all this data from Facebook, and the story that we are told, the narrative we are told, is that this is the future of micro-targeting, right? Which is we can run these sophisticated psychographics to learn exactly what makes you tick and then deliver you a message that causes you to support Brexit. And the ICO, actually, like the British uh privacy regulator, got a lot of people angry because the end result of that paper that they released was actually it turns out that maybe Cambridge Analytics claims were totally overblown. And there's actually very little evidence that micro-targeting actually shifted any behavior. And so we're left in kind of a strange spot, particularly if you tend to be a tech critic, which is like we rested our entire claim based on what Cambridge Analytica said in its marketing copy. And again, maybe we want to resist Cambridge Analytica for reasons other than they have a mind control ray. And so I do really believe in the idea that if you want to be critical about these technologies, we always have to be wary of the risk that we in some ways are advancing their claims. And I think it's a very attractive thing for, you know, particularly people who are critical of tech to pull at, right? Because you want to feel like you're fighting, you know, the big boss. You want to be in a boss fight. And so there's a tendency to be like, well, of course they would have a mind control array, because that's kind of the most dramatic thing to be fighting. Whereas I think we should be asking, like, in a world where that stuff doesn't even work, are there still reasons not to want what they're doing, right? That's a better and more robust place for the critique. And so to move on to your second question, right, which is this question of what in the ad market kind of subverts the idea that ads are really powerful as a way of getting people to change their behavior. I'll give you two sort of interesting incidents that kind of maybe maybe illustrate this a little bit. One of them is actually in 2017, Proctor and Gamble, one of the biggest advertisers in the world, they make all these consumer products. They really, you know, want to make sure their online advertising works, basically cut $200 million from a digital ad spending budget to basically no result. In fact, they reported that the scope, the reach of their advertising increased about 10%. So this is like really interesting, right? It's a fact that comes out of like people who buy lots of advertising. And the fact of the matter is, is like, what is that $200 million million dollars doing if not actually helping them shape consumer behavior? So I think that's one interesting thing. So we have a lot of kind of practical evidence that sort of suggests that look, advertising might actually shape behavior. And there's some people who come back and say, Tim, I understand, but like, look, we have some cases in which advertising really works. And to that, I think the second thing I'll bring up is this study that Google itself did in 2014, which basically indicated that something like 56% of ads are never even seen. So we don't even have to get to the debate of whether or not ads work or not. There's a question of whether or not someone even sees an ad in the first place. And I think that's really powerful, right? Google, who has a huge amount of interest in getting this right, straight up admits that half of the inventory is never seen. And so again, I think there's a lot of questions about like, is this advertising engine as effective as we think it is? And I think there's a lot of evidence to suggest that it might not.
SPEAKER_00Google and Facebook are the giants, I guess, in the digital ad space, in the sense that they control really significant percentage of the market share, right? And in the book, you explain that by having so much power, they also have a lot of power to hide some of what's going on there and to make the markets themselves less transparent. So can you talk a bit about how that works and how that actually benefits their business by making it harder to see whether or not these ads are actually working effectively?
SPEAKER_01There's an interesting fetish around numbers in the advertising industry. Often what you hear is okay, digital advertising, at least it's better than billboards, or at least it's better than magazines. And I think the claim is largely built on the idea that we've got numbers. Like I can do, I can show you lots of spreadsheets with numbers on them, right? But I think it really sidesteps the question of like, what are those numbers actually getting you? And can you trust those numbers, right? I think is another really important question. And I think we have these incidents where the market power of a Google or a Facebook actually introduces a certain level of opacity in the system, right? Because the numbers that you get as an advertiser are largely based on the sort of discretion of these big companies. And we have these interesting incidents, right? So if you recall from a few years back, right, Facebook was like uh pivot to video. Everything is eventually going to be on video, and lots of people spend all sorts of time spending a lot of time on video on Facebook and actually convinced a lot of advertisers like we should actually get people to do video. It also encouraged a lot of publications to invest heavily in video. They fired a bunch of journalists and they're like, we just need all these video producers now. It turned out later, right, that like Facebook had inflated the numbers on how nice this was and how highly engaged people were by like about 60 to 80%. Now, again, we can argue about whether or not that was intentional fraud or just incompetence, right? Or just uh just negligence. But in either case, it proves the point, I think, that in a world where there's only a few big providers in advertising, you really are dependent on their willingness to give you transparency and accurate transparency at that. And so, yeah, I think I think there's a lot of problems given the consolidation in the market.
SPEAKER_00You know, obviously we talked earlier about how these digital ad markets operate kind of like financial markets, right? And so then what effect does that kind of lack of transparency have on, I guess, how these markets work or whether they're able to operate effectively or functionally?
SPEAKER_01The history of financial crises and bubbles is like a really fascinating thing to dig into, which is like how can so many people involved in a marketplace like basically make all these collective decisions that produce this ultimate outcome, which is like a crash that hurts everybody. And one of the things I think that we learn from those stories is effectively that there's a lot of incentive to keep going, right? And even though there's people who like know in the marketplace, right, that like things might be going wrong, there's a lot of need to keep the wheel turning. And I do think that this is a counterargument to people who say, look, people wouldn't spend money on this market if it didn't work, right? And so the fact that there is a market proves that the market is good. And kind of what I'm trying to argue is that like there's a lot of perverse incentives to keep the wheel turning. If you are a big platform, you want to show that your advertising is way more effective than you know, TV, for instance. And so you have to always show that advertising works. If you're a brand, you're a middle manager at a brand, you want to show your boss that the campaign that you spent all this money on on the internet worked really well. So you've got incentives to show everybody that it works. If you're an ad agency, you want to convince people that you're working on the hot new thing, which is digital advertising. So you also have incentives. So again, I think that there's like there's there's all of these pressures that are kind of continuing to kind of keep this market moving, but in a way that that's in a dangerous direction, right? If you're familiar with kind of the trajectory of these bubbles.
SPEAKER_00You touched on how this kind of excitement over digital advertising and the inability to really see what's going on is affecting news publications, is affecting television advertising, all these, you know, other ways of delivering advertising, right? And so in the news media right now, we're looking at this major problem where ad revenue has kind of collapsed, and that is causing a lot of problems for journalists to be able to get jobs. A lot of people would say it's affecting like the quality of the reporting and the investigation that we're able to receive because there's not the money to properly fund it. I guess my question is, you know, do you think that that lack of transparency and kind of the hype around digital ad markets is affecting news publishers' ability to get advertisers and thus revenue to fund their journalism? And where you also write that this lack of transparency is an issue in the market and that digital ads don't work as well as Google and Facebook and you know other players would say they would. If we look at it, like do you actually think that if we returned to a model where news publishers are selling ads that are relevant to the content that they're publishing, that would actually potentially deliver better returns for advertisers in terms of people like clicking their ads or paying attention to them?
SPEAKER_01The claim of the book is essentially that it's unclear if digital advertising is any better than like the long-standing advertising that we couldn't measure very well. But that sort of like a fundamental faith that digital advertising as better has kind of created this like gravitational well, right, where money has just kind of flowed to these big companies. And so I buy the argument that in some ways it's sort of like it's sort of parasitic on the advertising ecosystem, right? Which is that like if the market valued digital advertising correctly, that actually we would wouldn't see money being sucked out so quickly from, say, newspapers, right? From journalists. Yeah, I would buy that, right? I think the question we would have to ask would be in a world where digital advertising and traditional advertising were considered on par with one another, would we still see a lot of money moving to the big companies? And it's unclear, right? Because it is true that Facebook is getting much bigger reach. I think what we would tend to see, though, is probably that there would be advertisers that wouldn't want the trade-off that would say that, look, a newspaper that has content that's largely focused on, like, you know, a town or a state or something like that, right? Like local, local news. That's really where we want to be. And I do think that if the market priced it more effectively, there probably would be more room than we see right now. And it would certainly be more room than what COVID has revealed, right? Which is that like the media ecosystem is incredibly brittle and that like most publications don't have the reserves needed to even make it like two months in a particularly bad time. And so I think like you can at least make the argument that this mispricing, this incorrect assessment of digital advertising has created a much more brittle media ecosystem. So it's it's fragile in a way that it wouldn't otherwise be. I buy that for sure.
SPEAKER_00I wonder as well, because you talked about how when markets are financialized, kind of the value can be inflated. Like the value might not actually reflect what is being delivered because of all these financial transactions that are going on, all the speculative trading, stuff like that, right? So I wonder like if we're seeing that in the digital ad market, in this programmatic ad market where all of these trades are kind of decided by algorithms and and things like that, if that also kind of disincentivizes putting ads in newspapers or you know, just on media that is not targeted in that way because that financialization makes those programmatic ads look so much more. Valuable, I guess.
SPEAKER_01The argument may even go deeper than I think the direction that you're pushing in, which is you're kind of talking about like advertising with the big companies versus advertising on other sites online or other kinds of content. But I think that there's actually a very strong argument that the strength of advertising and programmatic advertising in particular has basically smothered a lot of the other potential business models that might emerge in the space. Not just advertising, like not on Facebook and on your local paper, for instance, but also just like things like subscriptions and worker co-ops and all these things that people are experimenting with right now. And I do think a lot of that, the fault of that actually rests less on the marketplace and more in the distortions in the marketplace that are actually driven by investors in the space. I spent about a decade out in San Francisco, and it was very typical to hear friends who are pitching business models where investors would say, Look, why are you trying to monetize in this way? We know advertising works and it's highly scalable. So you should definitely do that. And I do really think about how many businesses were not even, we weren't able to even experiment with these business models because they never even got the kind of risk capital to get off the ground. And so I do think that there's there's not only the market pressure of like, oh, well, this is so much better. So we should put it with Google. It's kind of like no one ever got fired for advertising with Google. I think it's also driven by like the psychological dominance of this model, right? Such that like investors are just unwilling to roll the dice on different things that really might carve out a different path for us.
SPEAKER_00I think I'll return to the question of alternatives in a minute. But now, you know, obviously when we talk about this financialization and you've compared it to say the crashes of 2008 and 1929. So when we're looking at these ad markets, and you know, obviously the the title of the book kind of calls attention to this, but when we have these bubbles that form when the value that people think is there is, you know, not actually as great as what's there, what do you see as the threat to this market and its possibility of collapse? And do you think that it's actually possible to kind of rein it in, or do you think we're just doomed to kind of explode this bubble as you talked about earlier, you know, where there's incentives just to keep going?
SPEAKER_01I was joking about this phrase on the internet the other day was uh you can be an intentional Marxist, right? And the theory there is basically like, look, the contradictions inherent in this market are going to bring it down eventually. So the wheel of history is just turning to eventually bring down the ad market. And I guess I tend to be kind of a skeptic with that, right? I do think that like, again, most of these problems are well known, right? People in the industry will be like, yeah, we've known about this for a long time. I've already gotten that review from some ad people who are like, yeah, this is nothing new. And it's true, it is kind of nothing new within the industry. What that suggests to me is that like the incentives are really pushing pretty hard to keep this ball rolling down the hill, right? Everybody's making way too much money. And so I do think that there is, to follow the theory, right, a revolutionary approach to the attentional economy, right? Which is that we need to do something to sort of pop this bubble or deflate this bubble, because we think the human consequences of it having to crash on its own are too great. Or at the very least, that we think it might keep going if we don't do anything, right? And we don't want to live in a society where that's the case. And so I tend to be a big believer in the idea that there is room for regulatory action here. And I think there is room for greater transparency. Because I do think that there has been a certain level of like open secrets in the ad industry. But it's actually interesting when you make this argument to a lot of people who don't think about programmatic ads all day, right? Which is like most people. They're like, oh yeah, that's really weird that this is how the whole internet is funded. And so I hope that the book is an exercise in doing this. But I think one of the things I'm also really interested in is is it possible to have effectively like a research organization, which is really an activist organization, that's sort of dedicated to kind of constantly deflating these claims and making it very obvious what's going on here, just because I think that helps to kind of slow down the market and deflate the market in a way that's less catastrophic than you know, all of us waking up one day and realizing that we've just built this whole thing on sand. And so I do think there's a need for sort of public education on these issues. And I think there's a need for regulation for sure.
SPEAKER_00If these regulatory measures were taken, you know, if this kind of research body was set up, it could go some way to kind of deflating this bubble or giving us more insight into what's actually happening here so people wouldn't be so blinded by, you know, what's happening in these markets, right?
SPEAKER_01The big question, right, which I think is the question you're probably going to creep up to is like, okay, so how do we how do we replace this advertising business model, right? And I unfortunately it's very difficult to say, right? We don't have a whole lot of ideas about business models that can scale so quickly and generate so much wealth. I think it begs two questions. One of them is do we want an internet that has those characteristics? And the other one is can we ramp up other types of business models to at least kind of cushion some of this damage? Because it isn't just the big companies that will be harmed. I don't really care about like what Mark Zuckerberg's gonna do with a billion less dollars. But I do care about, say, all the journalists that are suddenly trapped in a much more fragile media ecosystem. Like we need to figure out a way to transition this economy, or else I think the human consequences and the social consequences will, I think, be quite great.
SPEAKER_00You talk there about how there might not be another business model that can scale up in the same way. Do you think that by kind of deflating this ad bubble and kind of all this speculation that's going on that kind of inflates the value of these ads that then makes it okay to kind of pursue these other business models because advertising isn't as lucrative as maybe it once was because of the financialization that was going on?
SPEAKER_01I agree. And I do think that one of the problems here, you know, to be clear, my position in the book isn't necessarily that we should get rid of all advertising. I think what we really need to ask is like, do we want advertising to be the monoculture, right? Like that drives everything on the internet. And my answer to that question is no. And I'd be much happier with an internet that features a diversity of business models, right? I think my hope is actually not too dramatic in that case. Like all I'm asking for is that we should not have all of the biggest companies in the world funded on like 90% advertising. So yeah, I do think that the benefit of being able to deflate this market somewhat is that there would be a greater willingness to kind of consider and experiment with alternative models. And in doing so, my hope is that we find, you know, lots of things that can help the internet economy keep running.
SPEAKER_00The preferred path out of this would be to deflate the bubble, right? Because that would lessen the potential human impacts of this massive economy imploding in the same way that we talk about nationalizing the fossil fuel industry and kind of winding it down instead of just letting it all implode because the price crashes or something like that, right? It's about paying attention to the potential human impacts that could come out of this. But I'm also wondering if this bubble did explode, you compared it to 2008 and you know what happened with the housing crash of 2008. Do you think that the collapse of an ad bubble and its effect on all of these online companies would have the same scale of impact? Or do you think it would be less of an impact? Like, what do you see that being in terms of the effect on the economy more broadly?
SPEAKER_01I think this is actually a question where reasonable minds can differ. One of the good critiques of the book, right, is to basically say, okay, say we just snapped our fingers and advertising just disappeared, right? Like it went from like billions of billions to zero. Like, would it have a rippling effect in the economy? I think there's some people who can argue that look, like the 2001 crisis in tech stocks, like the first tech bubble, didn't have that big of an impact on the economy just because like pets.com and like all of these startups weren't really interconnected throughout the greater economy. And so I think the debate you would have is okay, is the modern ad economy, are these modern tech companies, are they more like ExxonMobil? Like are they like fuel companies? Or are they still kind of like the startups of the 90s? I tend to argue that like if you look at these companies, it just turns out that they've used advertising as this like impenetrable financial fortress with which to attack all these other industries. And I think that actually makes an argument that the failure of advertising would have these rippling effects. We can even think about like scientific research, right? A lot of my work in the last few years has been on machine learning and AI. Most of the great industrial labs, right, that have like the top experts in the world doing the most cutting edge research, those are loss leaders. They lose money for these companies. In fact, they're all underwritten by advertising. So you can imagine a world where you snap your fingers and advertising disappears. There actually is a real impact on things like scientific development, right? Because these companies have become so prolific in basically using the money they have from advertising to try to extend into other marketplaces. And so I think that there's a strong claim that you would actually see these rippling effects. Though again, I think like the game ends up being like what parts of the economy and where. And again, I think that's a fascinating discussion to have, and I think reasonable minds can differ on what that would look like.
SPEAKER_00I'm sure there are people who would disagree, but you know, I tend to agree with you, right? Because there's so much that is dependent on these companies that are funded by ads now. You know, if we think about writing all that kind of stuff, like there's a lot of people now who are kind of dependent on all of these free tools that come from Google, right? Between docs and Gmail and all these sorts of things. That's just to give one small example. And the number of people who use those tools are much larger. And so I'm wondering, you know, if we did see this breakdown in the ad model and advertising is not delivering these revenues that these companies are used to from advertising, what do you think would be the impact on our ability to access these tools and these products that we're used to having free access to? And, you know, you did talk about other business models. Do you think that these tools would transition to a different business model? Or do you think that we would start to see things look a lot differently because advertising is no longer able to fund these things in the same way?
SPEAKER_01I mean, I think it would become a battle really between economics and sort of mass psychology. So I think a lot about like so content is a great example, which is that essentially you have had an internet public for the last two decades be trained on the fact that the psychological price of content should be zero. And if you're in a situation where suddenly all these subscription walls need to go up, that's a very painful change. And I think there's a question about like how quickly would the market adjust, and how quickly would people be like, actually, I'm not going to pay for it. And I think that's a billion dollar bet if we ended up in that kind of situation, which is like, what would the public do? Would they spend less or would they step up and actually start deciding to subscribe to things? I think there's big equity questions, right? Which is like who can afford to pay for content, right? Is another big consideration that would definitely be the case. The other thing I would add too is it's worth kind of like fast-forwarding even after, slightly after the crash, to try to figure out where we would end up. Because I do think that one of the most interesting parts of the current debate around, say, whether or not to use antitrust, right, as a policy tool on the big companies, is that the big companies have now started to argue don't regulate us, because if you regulate us, we're gonna lose the tech war against China. Right. And so like the technology industry has gotten pulled into this geopolitical battle in a way that like I think a lot of companies, if they were really feeling the pinch, would go for bailouts, would go for arguing for less regulation just because like the strength of US technology is now such like a geopolitical question. And so there is almost a kind of like too big to fail type scenario you could imagine where you know these companies actually get bailed out, right? Or they they end up kind of being sort of like an ATT style monopoly, right? Which are like very closely kind of aligned and in collaboration with the government. So I think that's like another scenario that you might see in order to kind of preserve the feeling that the internet is the same as it was, right? So you see you have a situation where like, I don't know, say Facebook is really in trouble and they get bailed out by the government, they can continue to still keep having the same business model, right? And keep offering their services for free. And so there's that's almost a way of kind of like staving off the problems of this kind of crash.
SPEAKER_00Just last week, you know, on the show, we had JS Tan, who's kind of talking about how Silicon Valley is embracing that nationalism, right? So I think that's a really important question. And it's something I've been thinking about as well, like in terms of if these companies are perceived to be essential to the American role in the world, American dominance, the tech aspect of that, will the US government actually break them up or will they want to preserve them as part of their way to combat China, right? And so, you know, I think that's a really interesting question, and I'm sure it's one that is going to kind of play out over the next little while. But I'm also wondering, because you mentioned before that because these really powerful companies are able to extract such a large degree of profit from their various business models, you know, Google and Facebook, it's advertising, Amazon, you know, is cloud, Apple hardware, whatever, they are able to invest a lot of money, say, in research, in science. Do you think if we saw, say, this ad business model collapse or, you know, not be as lucrative as it was before? And for the other companies, it might be antitrust breaking them up or something like that. Do you think that would kind of force a greater public role to start investing in these things again, instead of it having to come from these companies that are able to extract the profits in order to do it?
SPEAKER_01Yeah, I for sure think so. I mean, I guess the question is whether or not you think contemporary American politics allows for that kind of action. You know, I've been I've been reading a lot about the history of the WPA recently. And like I was joking with someone the other day, I was like, it's almost from like a parallel universe. There's a point in the WPA where they're like, should we fund like people who act in theaters? And like the stated position of the WPA is like, I don't know, those people need to eat too. Like, obviously, we would do it. And I'm like, what is this? It's like, I mean, obviously I agree, but like it just seems like it's a political statement that like it's like almost science fiction, right? In my mind, given the current state of politics. But I agree with you. I mean, the breakdown, say, in funding and scientific research or the inability for people to access some of these things if they're not able to pay the subscription immediately raises the question of like, yeah, should the government play a role in providing access? Uh, should the government play a role in funding these things? And I my answer would be yes, right? I guess there's a question as like whether or not you think that there's enough kind of political will to push that sort of thing. In effect, uh particularly in the machine learning case, I think the US has frequently decided that it's gonna outsource RD, right, to private industry. Um and I think that has come with a lot of consequences that are not great, right? And so my hope would be there'd be this sudden realization, and we're like, oh yeah, we're gonna do all this public funding of scientific research. I guess I'm just skeptical whether or not we are there as a country right now to actually make that happen.
SPEAKER_00I completely agree with you in like seeing these very different paths. I was recently reading about Canada's response to World War II and how like it created 28 public companies and like Canada essentially had a planned economy during the period of the war. And it just seems like, on one hand, like, yeah, that makes a lot of sense. But on the other hand, it's like it's just hard so hard to imagine like the politicians in this age taking that kind of approach to these massive problems, right? And so I want to end by going back on the point that you made about inequality. The ad model, whatever you want to say about it, has made it easier for people who don't have the means to pay for subscriptions and all these sorts of things to still access the same services and products as everyone else, more generally, right? And so if we did see this ad model collapse or ads weren't able to support free products in the same way, what would be the issues then in terms of access? And how do you think that we would have to try to address those?
SPEAKER_01The kind of whole arc of the book should really be viewed not necessarily as an argument against advertising, but really the notion that advertising should be like a tool, what we decide to implement when we think like it's socially beneficial too. And so, really, you know, there is a lot of benefits with advertising, right? One of them is the one that you're you're pointing out, right? Which is that you can afford to offer the service for free. And that has a lot of access implications. And so I think we end up getting into this very kind of detailed, but I think important conversation about like what services should continue to run on advertising, what services should run on subscription, but be subsidized in order to ensure access, which services should just run on subscription, and like what things should be publicly funded. And I think that's like a that's a spectrum of different options. But to take probably, I think like one of the biggest cases is questions around access to news. And I think there there's a very strong argument that like it's a public good for people to have access to it. But the problem is that the trade-off and the incentives that advertising introduces is not always great. And so I think for there, there's a strong argument for this sort of subscription, but with a sort of subsidization for the purposes of equity. And now that may not apply for everything, right? Like, do you feel that's the same in a case like a TikTok? Tough to say, right? I think there's a there's a real intellectual project to be done saying, okay, if we're not going to run this on advertising, how do we ensure equity that we think is socially responsible? I don't have all the answers, but I think it will be this very detailed question of like, what is this service? And do we think that, you know, having access to it is like important from the point of view of, you know, being a person or being a citizen?
SPEAKER_00I think that's a really important perspective to have, right? Because that's been one of my biggest issues with kind of this discussion that's having now, especially around this, you know, social dilemma documentary from Netflix, right? There's this discussion about, oh, maybe so many services shouldn't be using ads and should have subscriptions. But I feel like a lot of that discussion often misses the access implications of that, right? And a lot of those talks are happening between people who are at a pretty high level, I guess I would say.
SPEAKER_01They can definitely pay for the subscriptions.
SPEAKER_00Yeah, totally. Like they have no problem with that, right? And there's not that kind of additional perspective to say, okay, I can avoid the subscription, but can everyone do that? And I think that's a really important thing for us to think about.
SPEAKER_01Yeah, and I think again, it's important for us to consider that, in large part because I think it really does raise the very thorny question, right? Of like, what are the services on the internet that we really feel are like critical and should be utilities, dare we say? And yeah, again, that's why I tend to shy away from kind of categorical arguments on this, because like I can see situations where subscription seems reasonable, other ones where it seems like sort of deeply regressive. So yeah, I agree with you. I mean, there's a lot of things to have beef with on social dilemma, but I think like one of them is kind of a lack of consideration on those points.
SPEAKER_00I completely agree. Tim, I think your book is fantastic and it really gives people a lot of insight into an industry that we don't talk so much about, but that we interact with every single day. And so I really appreciate you coming on to explain this more for us. Thanks so much.
SPEAKER_01Yeah, thanks for having me on the show.
SPEAKER_00Tim Wong is the author of Subprime Attention Crisis Advertising and the Time Bomb at the heart of the internet. And you can find information on where to get it in the show notes. You can follow Tim on Twitter at Tim Wong. You can also follow the show at at TechWon't Save Us, and you can follow me, Parismarks, at at Parismarks. TechWon't Save Us is part of the Harbinger Media Network, a group of left-wing podcasts from across Canada. You can find more information about that in the show notes as well. And if you enjoyed this conversation, if you enjoy the show, please consider going to Patreon at slash tech won't save us and becoming a supporter. Thanks so much.