Re-Evaluating Online Ads

I recently submitted written evidence to the House of Lords Communications Committee, regarding their inquiry into the regulation of online platforms. Online platforms are attention harvesters. They take advantage of humanity’s receptiveness to variable rewards and natural tendency to be vigilant in order to harvest as much attention as possible.

These platforms then capitalize harvested attention through the display of targeted ads.

Since putting those materials together, I’ve been thinking about how ads are displayed and re-evaluating my own opinions about what makes for a good ad… relatively speaking.

Apparent Versus Embedded Advertising

You see thousands of ads every day. Marketers have myriad terms that they use to describe ads, but fundamentally there are two types. Apparent ads are the ones that you notice; embedded ads are the ones that you don’t:

As a consumer, how do you experience these different types of ads? Let’s examine:

A Day in Your Life

Work was exhausting. You had leftovers for dinner and just got the kids to bed. You’re right in the middle of a reality show and all of a sudden another goddamned beer commercial comes on. Sigh. You can either sit through it, or go pee, or check your phone again. You decide to just check your phone. Hello, Facebook. As the status updates flick past you hardly notice that a few of them are branded corporate messages (ads) masquerading as updates from your friends. These masqueraders slipped into your subconscious thought and Facebook just earned a few pennies.

There are as many ads as there are moments, and you just got played: fell for one form of advertising while dodging the other.

Your Life, Online

You see both kinds of ads on the internet, where platforms have sophisticated targeting mechanisms that use your personal data — demographics, interests, social connections — to choose what specific ads to show you.

True to form, apparent ads have always been painfully obvious online: interrupts, pop-ups, takeovers, pre-roll videos that appear on load or after the user has interacted with an element of the page. These ads are given full or partial screen space, and you have to find and tap on a usually-hidden “no thanks” or “skip” link to make the ad go away.

As expected, online embedded ads hide in plain sight. Originally, they were placed into web pages alongside real content, and displayed via a few primitive / standard-sized containers. Over the years, they’ve become increasingly integrated into primary content.

Google was the first platform to make major moves that direction. After achieving scale by building a more powerful and effective search engine, Google began development of their own custom advertising platform in order to make their business profitable. Google maintained full control of the economics of their ad model, and also gained the ability to display ads however they wanted.

Among other things, Google chose to disguise their ads as search results and displayed them contextually in the user’s results page. This maneuver actually violated user expectations: users had come to expect that Google would simply show the best matching web pages for a search query, and yet Google was displaying some of the best matches with advertisements furtively sprinkled in at the top. The rationale for this violation was that the user had given Google permission to show them relevant advertisements by virtue of having expressed a search query.

That rationale, in turn, is rooted in the concept of Permission Marketing. Permission marketing had been catching on in industry for more than a year by the time Google introduced AdWords. The marketer Seth Godin even wrote a book about it. The permission marketer would say that by expressing a query to Google, the user had offered Google three levels of permission to display ads:

• Selected the Google platform (Intravenous Permission)
• Determined that the Google search function was valuable enough to interact with (Points Permission)
• Informed Google of a topic / keyword of interest (Situational Permission)

The notion that the above user actions represent an invitation to advertise may seem a little absurd to you, but nothing in this world is free, right? The query terms enabled Google to display advertisements that were related to this area of interest. In this way, the ads were more relevant to the user. Google was going to show ads whether the user liked it or not; at least with permission marketing the ads would be more meaningful and less annoying than they had been.

Or at least, that was the idea and the excuse.

But why hide the ads? While less annoying, Google’s new ads were more deceptive and surreptitious than ads had ever been before. Their ads were actually pretending to be real content in the hopes that you’d click on the ads instead of the real search results. The deception worked, big time. Google’s users either adapted to this new normal, or failed to recognize the ads, or both, and Google made an incredible amount of money. Deceptive practices created profits. To this day — and as diverse as its technology initiatives are — Google still gets the vast majority of its money (84%+) from ad revenues. As a result of its financial success, Google became the de-facto model for the consumer platforms that would follow:

1. Build a platform with some sort of inherent value
2. Achieve massive scale
3. Embed ads into the experience of your platform
4. Assume you have “permission” to display and target the ads
5. Profit

You can’t embed ads on day one because they dilute platform value and impede growth, but we’ll come back to that point in a moment.

Social Ads

Upon achieving scale, Facebook took Google’s approach a step further by extending the notion of permission into the social realm:

• Your social graph: your friend has liked this product or service, so now you’ve given us permission to show it to you by being friends with them.
• Your social interactions: you liked a status update from Nike so now we have permission to show you shoe ads.

And this, of course, is how Facebook ended up so sideways on the issue of your personal data and how it is shared with their developers and advertisers. Their entire platform is built around the idea that you’re OK with seeing advertisements integrated with the “real” stuff generated by your friends. Facebook has assumed the responsibility to curate your content for you, and has an incentive to show you advertisements, because that’s how they make money. Personal targeting has always been a vital component of Facebook’s approach—and their primary differentiator. Their now-infamous developer program once shared your personal data with developers you’d never met, simply by virtue of the fact that one of your friends had interacted with the developer’s apps. This was an obvious move for Facebook to make, given that users weren’t knowingly giving permission, Facebook was just assuming permission and endeavoring to gain scale.

Critique

Both embedded and apparent online ads are targeted with personal data and introduce privacy and trust issues. Still, I would assert that embedded ads are worse. Why? Because the less awareness the consumer has of ads, the more harmful those ads are:

• Loss of Consumer Agency: Embedded ads strip the consumer of the opportunity to make an active, conscious purchase decision in real-time. Rather than make a direct appeal to the consumer on merit or value, embedded ads seek to influence a consumer’s subconscious thought over a period of time. Embedded ad platforms are more easily infiltrated by disinformation and propaganda campaigns because these platforms don’t clearly identify ads and have less affiliation with ad content.
• Lack of Product/Platform Integrity: Embedded ads pose as real content in an effort to trick consumers into interacting with them. This is deception pure and simple. It is also a direct violation of user expectations that content be legitimate. Web users are often not aware of the embedded ads when they visually scan the page. A user may realize that she mistakenly clicked on an ad; ironically, the best remedy for the user is to go back and click on something else, which benefits the platform by creating more user engagement.
• Loss of Product/Platform Value: Embedded ads create a platform incentive to make results less useful, first by diluting real content in order to make room for ads, and then by promoting content that only has engagement value, rather than cultural, historical, societal or other value. In embedded ad-driven platforms, value is stripped down to one dimension: it’s all about clicks/taps because that is how ads are priced. The consumer is not actively aware of the dilution or the promotion.

Apparent ads are annoying. But at least you know what they are and when you’re dealing with them. You know they’re trying to sell you something, and even though they can be indirect (like with their jingles) you can trust them to go away when they’re done. With apparent ads, you always know what’s up. A good example from my personal experience: Spotify. I had a free version of Spotify for almost a year before finally purchasing a monthly subscription. During that time Spotify would regularly interrupt my streaming of music with advertisements. Once I got sick of hearing the ads, I purchased the subscription because I valued the service. As a consumer, I may have been annoyed by Spotify’s ads from time-to-time, but my expectations were never violated by them. Furthermore I was able to discern how the ads had been targeted to me, because they were clearly identified.

It’s a different story with embedded ads. They hide in plain site. They try to influence your thoughts without you noticing. You don’t always know when they’re around or exactly what they’re trying to sell. They pretend to be something they are not. They manipulate you and erode your willpower over time. They compel advertisers to deceive and seek deepening levels of engagement while discounting other forms of value. With embedded ads, you’re in the dark, and the last to know.

What Do You Think?

Platforms and online marketers argue that embedded ads are the better of the two types, because they’re less annoying and more engaging.

Do you agree?