[MaxScheiber]

This article has quite a cynical tone that I can't say I agree with. The argument that advertising is the business of harvesting customers' attention, while not necessarily incorrect, is disingenuous. The ad industry is not some diabolical entity that conspires to brainwash citizens of the world.

I would posit that the advertising market is actually quite efficient as opposed to being a market failure. Let's examine a paragraph from the market failure section:

> Movie theatres, cable channels, phone apps, bill-board operators, and so on price the sale of your attention at what it takes to extract it from you - namely, how easy it is for you to escape their predations. This is often much lower than the value to you, or to others, of directing your attention to something else.

The author makes the implicit assumption that advertisements automatically garner 100% of our attention. They don't. When was the last time you went to a movie theater before the previews started, sat silently, and stared at the advert loop? You probably have never done that! Instead, you give your attention to your loved ones or your phone. And maybe you'll watch the previews, but if you're even somewhat into watching newly released movies, those add value to you.

Some advertisements do capture our attention, and those are priced appropriately. Super Bowl commercials cost more on a CPM basis than a commercial to be aired during the Walking Dead, which in turn costs more than an Instagram sponsored story. This is the sign of an efficient market, not a market failure.

Moreover, people do avoid advertisements when they deem it necessary. Some people buy the premium versions of iPhone applications, some people only watch new TV shows on Netflix, and some people pay extra to watch live sports events on an ad-free Internet stream. Again, this is the sign of an efficient market, not a market failure.

You could, instead, possibly make the argument that advertising is a prisoner's dilemma. Perhaps the world would be better off without advertising. (I'm not even sure that this is true, given that advertising does benefit people.) But if there are no advertisements and a single company ran a TV spot, it would be at a huge competitive advantage. So everyone runs marketing campaigns. I really think this benefits the consumer more than the author gives credit for, however. Marketing is the field of creating value for a specific segment of the population, who in turn will enter into a long-term relationship with your firm and give you economic value in return. Advertising is an important part of this.

Also, to be clear, I don't advocate for marketing strategies that themselves are disingenuous. Moreover, there are perfectly valid arguments to make that inference-based advertising are immoral, or that Internet tracking is immoral. But the author is painting with absolutely massive brush strokes against the entire field of "advertising," and I feel the need to strongly qualify his argument.

There's a lot I want to say about this piece, because it seems that the author fundamentally misunderstands marketing. The entire bit about advertisers charging consumers directly is a terrible business idea, for example, for the same reason that we have grocery stores and shopping malls. However, I don't really want to spend all afternoon on a point-by-point response.

[abhv]

>The ad industry is not some diabolical entity that conspires to brainwash citizens of the world.

Yes, this is exactly the point.

Advertising is most certainly a "negative externality." Its cost is not fully borne by the firm, but rather imposed on intermediaries and externals. For example, there is no cost to the advertising firm for promoting blatantly incorrect or dangerous statements that must latter be corrected through costly education.

See for example the statistics about sugary-beverage advertising, and how society must ultimately pay for the health consequences [1].

>You could, instead, possibly make the argument that advertising is a prisoner's dilemma.

Advertising is not an issue of prisoner's dilemma (in which two players who benefit from cooperation are driven instead by rationality towards destructive outcomes).

It is more similar to a problem with asymmetrical information, i.e. the "market for lemmons." All of the posts in this thread about how "advertising is helpful for bringing information to the people who are looking for it" are talking about the very few instances of advertising improving the efficiency of an information marketplace. Instead, the marketplace is full of "lemmons," i.e. instances of advertising that are not aligned with true information flow, but with manipulation. The ad market is like shopping for used cars. Use caution.

[1] https://www.hsph.harvard.edu/nutritionsource/sugary-drinks-f...

[MaxScheiber]

> For example, there is no cost to the advertising firm for promoting blatantly incorrect or dangerous statements that must latter be corrected through costly education.

I disagree somewhat, as there is certainly a regulatory cost. Now whether FINRA is stringent enough is an entirely different question, and one that would be more fruitful to discuss.

Moreover, you'll see toward the bottom of my original comment that I don't think misleading advertising is a good thing. My comment mostly dealt with the author's discussion of consumer attention as a resource, to which I strongly disagree that there are externalities.

> Advertising is not an issue of prisoner's dilemma (in which two players who benefit from cooperation are driven instead by rationality towards destructive outcomes).

I defined cooperation to be a firm not advertising and defection to be a firm advertising. It certainly seems like the definition of a prisoner's dilemma to me under the way I'd set it up. But we're free to disagree. I agree that this is an asymmetrical information issue, but that quite literally applies to the entire business world.

[shanusmagnus]

The fundamental assumptions in your post disturb me. You are essentially mitigating the severity of the problem the article describes by saying that, really, advertis[ers|ments] are not _totally_ effective in stealing all of our attention. We can probably tune it out, sometimes. Usually we can mostly tune it out. For now.

This is such a pernicious idea. I suppose it can occur because this whole advertising thing has been one giant boiling the frog endeavor -- the fact that in some places you cannot engage in public life without turning over your attention, and all the statistical learning that occurs with it, to some entity over which you have no control. Well, other than the trivial "just stay in your house" control, which I don't feel to be control in any meaningful way.

It's interesting that the solution proposed to this is to assert property rights over something that, like clean air, people will probably have an intrinsic reaction to framing as property. In other words, a tragedy of the commons defense against something that is, in some ways, the opposite of the commons: the right to engage in civic behavior and still be gatekeeper of your own attention. Although maybe you could say it's the attentional commons, as if we all shared the same attentional pasture.

Attention is one of those things where it seems to me the sci-fi future is closer than we imagine -- where you walk along a street, and, based on who some company things you are, helpful product info gets beamed into your brain. It's already that way with audio, which, unlike visual stimuli, you can't even turn away from or tune out.

[Adlai]

I actually look forwards to the ads before movies on the rare occasions that I do attend cinema screenings. Since I watch no TV (and grew up without one) and make a point of minimizing my exposure to online advertising, this serves as an amusing little peek into the current state of pop propaganda.