When it comes to digital media, there may be a chink in that wall-garden.
Former Google executive Tim Hwang’s new book, Subprime Attention Crisis, claims the digital ad business is built on a fiction. Attention of viewers and targeting of audiences isn’t all it's cracked up to be. In fact, micro-targeting of users is far less accurate, and less persuasive.
The value of attention — the art of keeping digital users stuck to their screens for long periods of time to grab their data, which can be used or resold — is weaker than it appears.
All this is built around the outlook that digital media giants — Facebook and Google in particular — could be working themselves into a “bubble” or sorts.
No, not like a NBA location bubble for protection against COVID-19. Rather, a bubble that is fragile and ready to pop — like the real estate, mortgage-backed securities and the housing market in late 2008, which resulted in the Great Recession.
Considering all the recent gains in the stock market — after the initial massive drop due to the COVID-19 disruption in March/April — was built on the back of rising technology companies, Facebook and Google, as well, including Amazon, Netflix, chip-maker Invidia and others, Hwang says this is the bubble that could pop.
The idea of the book is that while user “attention” is pursued — one needs to examine the content users are consuming — the “quality” versus just “quantity.” Consumer personal information about family and friends might be “quality” stuff. But other news-related content might be suspect, and maybe some personal data, as well.
This might come to a head if advertisers realize they are getting far less return on their media investment — from less quality attention — and then leave digital platforms in droves. Hwang points the blame at machine-learning and advertising buying “programmatic” systems. This machine trading is what got mortgage-backed securities into problems back in 2008.
Also Hwang says companies’ ROI in digital marketing are often weak. Not helping this are the high costs around advertising technology -- which can climb to a massive 50% in some cases.
What would advertisers do then?
We can imagine they might move back, en masse, to traditional TV once they realize the digital media economy -- while working somewhat -- isn’t all that efficient in its ultimate goal: providing lasting value to users or advertisers.
Would better TV-based media/advertising systems then rise? Stay tuned — literally — to the TV screen.