Real Costs of the Business

Corporations like Facebook and Google that dictate today’s information flow and discourse are among the richest in the world – but their platforms are ‘free.’ Users are not their customers; we are only valuable insofar as they can track and profile us, and then sell advertisers as much of our attention with as much precision as possible. These tech giants ‘personalize’ everything we see – not just the ads, but news, recommendations, and more – to keep each user hooked. They amplify hate and lies by design, and feed users increasingly extreme content, because that’s what generates the most engagement and profit. Their own algorithmic tools have boosted everything from COVID-19 hoaxes and fake cancer cures to white supremacist groups and Holocaust denialism. Echo chambers, radicalization, and viral conspiracy theories are features of these platforms, not bugs.

The surveillance advertising business model may support ‘free’ services, but the real costs to society are incalculable. Below is a sampling of supplemental harms:

Funding the misinformation machine

The surveillance advertising industry funds insidious misinformation sites that promote medical hoaxes, conspiracy theories, extremist content, and foreign propaganda – all while siphoning funding away from legitimate news sources. The root problem is the nature of surveillance advertising itself, and the ways in which it differs from less opaque and invasive models like contextual advertising:

Contextual advertising simply relies on placing ads around relevant content, as opposed to tracking and profiling specific users or groups. For example, if you search for ‘new cars’ – regardless of who you are or what your browsing history reveals – you might see ads from local car dealerships; if you are reading about how to plan a wedding, you might see ads from caterers or photographers. Advertisers have traditionally placed these privacy-friendly ads directly through publishers and websites, ensuring control, transparency, and accountability over where they appear.

Surveillance advertising relies on tracking and behavioral profiling. Rather than choosing where to place ads, advertisers choose users with precise characteristics and target them wherever they go – all through opaque automated processes executed by adtech middlemen. For example, imagine Verizon places a large surveillance ad buy through Google, which dominates adtech, and services over two million websites. So perhaps a user who’d been browsing new cell phones goes to a health misinformation site; Google’s AI, recognizing that this user may be in the market for a phone, places a Verizon ad there. Now Verizon is unwittingly funding COVID hoaxes. This is not just an esoteric and hypothetical threat – it’s already happening at massive scale:

  • Protocol: Google says it’s fighting election lies, but its programmatic ads are funding them | “Since the 2016 election, endless attention has been paid to the way election misinformation can spread through targeted ads on social media platforms like Facebook and YouTube. But an equally insidious and less-discussed problem is how programmatic advertising, a field dominated by Google, has become the lifeblood of misinformation sites. 
  • Forbes (Dr. Augustine Fou): Big Advertisers Still Fund Hate And Disinformation Outside Of Facebook | “The Global Disinformation Index, which tracks disinformation, hate speech, and fake news sites, has published data which confirms that Google’s ad platform is by far the most ubiquitous and common choice for sites like these to make money via digital advertising.”
  • Poynter: How ad tech companies fund misinformation | GDI published a study [which] found that ad technology companies spend about $235 million annually by running ads on such sites… Google served about 70% of the websites sampled. It also provided about 37%, or $86 million annually, of their revenue.”

  • B&T: Over 4,000 Brands Bought Programmatic Ads On COVID-19 Misinformation Websites | "NewsGuard reported that in most cases, the advertisements were likely inadvertent, placed by algorithms on programmatic ad-buying platforms like Google’s DV360 rather than intentionally by the brands involved... NewsGuard said the data demonstrate the vast scale at which programmatic advertising supports the online misinformation ecosystem"

  • Bloomberg: Google Helps Place Ads on Sites Amplifying Covid-19 Conspiracies | “Google is also placing advertisements on websites that publish the theories, helping their owners generate revenue and continue their operations. In at least one instance, Google has run ads featuring a conspiracist it has already banned.”
  • New York Times (L. Gordon Crovitz): How Amazon, Geico and Walmart Fund Propaganda | “Algorithms are sending ads by American brands onto Russian disinformation sites.”

To combat the brand safety threats inherent to surveillance ads, companies have instituted ‘keyword blocklists’ that not only fail to solve the problem, but strip funding from legitimate journalism, further eroding the media ecosystem. For example, advertisers will stipulate that their ads not appear around words like ‘coronavirus’ or ‘racism’ in hopes of avoiding health hoaxes or hateful content, but in practice, they are merely starving revenue from publishers reporting on essential topics.

  • Fast Company: The attempted coup at the Capitol needs to be brands’ wake-up call about funding online disinformation | “Programmatic advertising technology places millions of ads, and an industry has popped up within that ecosystem promising marketers peace of mind by using algorithms to program keyword block lists that purportedly control where these ads appear. But according to findings by founder Krzysztof Franaszek, Mastercard, for example, had words like racist, racism, white nationalist, discriminated, protest, and discrimination on its block list. Problem is, the technology routinely blocks all instances of these words without context. So real news reporting on these important issues gets blocked”
  • The Guardian: UK publishers losing digital ad revenue due to content 'blacklists' | “UK newspaper and magazine publishers lost almost £170m in digital revenue last year as technology designed to stop advertisements from appearing next to hard-hitting content, such as shootings and terrorism, also inadvertently blocked them from appearing in some of the most popular stories of the year.”
  • Variety: Vice Urges Advertisers to Stop Blocking ‘Black Lives Matter’ and Related Keywords | “In a recent internal analysis, Vice Media Group discovered that content related to the death of George Floyd and resulting protests was monetized at a rate 57% lower than other news content. That, according to Cooke, is the result of brands and agencies specifically blocking their ads from being next to ‘quality journalism’ about these issues. ‘In some cases, campaigns outright canceled because of the unrest,’ she said.”

Banning surveillance advertising would restore transparency and accountability to digital ad placements, and substantially defund junk sites that serve as critical infrastructure in the disinformation pipeline. These sites produce an endless drumbeat of made-to-go-viral conspiracy theories that are then boosted by bad-faith social media influencers and the platforms’ engagement-hungry algorithms – a toxic feedback loop fueled and financed by surveillance advertising.

A menace to public health

Facebook served ads promoting health conspiracy theories and unproven medical treatments– including by allowing advertisers to micro-target COVID-19 misinformation to users interested in “pseudoscience.”

Business Insider: “Facebook Let Advertisers Target Users Interested in 'Pseudoscience,' Allowing Them to Capitalize on Conspiracy Theories that Falsely Blame 5G Cell Towers for the Coronavirus.”

  • “The Markup reported Thursday that ‘pseudoscience’ was one of many interest categories assigned to users, which advertisers can select from to choose which people on Facebook see their ads. More than 78 million Facebook users were assigned the ‘pseudoscience’ category, which the platform says it has since deleted.
  • “One pseudoscience-specific ad that The Markup found this month promoted a beanie that claimed to protect the person wearing it from cell phone radiation. The ad's appearance coincides with the rise of a conspiracy theory that blames the coronavirus outbreak on the rollout of 5G, a new technology designed to increase mobile connectivity speeds.”

Washington Post: “Facebook Ads Push Misinformation About HIV Prevention Drugs, LGBT Activists Say, ‘Harming Public Health.’”

  • “Facebook users have been bombarded with misleading ads about medication meant to prevent the transmission of HIV, according to lesbian, gay, bisexual and transgender advocates, who say the tech giant’s refusal to remove the content has created a public-health crisis.”

Business Insider: “Anti-vaccination Ads on Facebook are Targeting Pregnant Women, While a Measles Outbreak Spreads Across the Country.”

  • “Facebook is aggressively being used by anti-vaccination advocates to target pregnant women with sponsored advertisements to spread false information and conspiracy theories as the US battles a climbing measles outbreak. A sponsored ad found by Quartz journalist Jeremy Merrill shows the anti-vaccination organization Stop Mandatory Vaccination targeting women ages 20 to 60 who have expressed interest in pregnancy living in the state of Washington — where the governor recently declared a state of emergency over the measles outbreak.”

The Guardian: “Facebook Enables Ads to Target Users Interested In ‘Vaccine Controversies.’”

  • “Facebook enables advertisers to promote content to nearly 900,000 people interested in “vaccine controversies”, the Guardian has found. Other groups of people that advertisers can pay to reach on Facebook include those interested in “Dr Tenpenny on Vaccines”, which refers to anti-vaccine activist Sherri Tenpenny, and “informed consent”, which is language that anti-vaccine propagandists have adopted to fight vaccination laws.”

A vehicle for discrimination

Big Tech platforms allow advertisers to target ads based on demographic information like race, religion, and zip code. This information can then be used to exploit disparities that can result in discriminatory pricing, racially insensitive product servicing, and other unfair market conditions.

Mother Jones: “Facebook Settles Civil Rights Lawsuits Over Ad Discrimination.”

  • “Facebook has become a peerless source of demographic data for advertisers. The information it gathers on its users allows advertisers to target ads for their products and services to an unprecedented level of precision. If you want to sell baseball gear in Washington, DC, for example, you can target middle-aged mothers with children who live in a wealthy ZIP code. But for years, civil rights groups have been warning Facebook—first in conversations, then in a series of lawsuits—that this hyper-targeting can run afoul of civil rights laws.”

ProPublica: “Facebook Ads Can Still Discriminate Against Women and Older Workers, Despite a Civil Rights Settlement.”

  • “In March [2019], Facebook reached a ‘historic’ settlement of five lawsuits by civil rights groups. Under the terms of the settlement, the social media giant created the special ads portal to prevent discrimination in employment, housing and credit ads against legally protected groups such as women and older workers. The new portal also restricts Facebook’s algorithm from considering gender and age when finding audiences for these ads. ‘Getting this right,’ Facebook CFO Sheryl Sandberg said in a press release, ‘is deeply important to me and all of us at Facebook because inclusivity is a core value for our company.’ But new research as well as advertising information available on Facebook suggest that the social media giant has not gotten this right.”

ProPublica: “HUD Sues Facebook Over Housing Discrimination and Says the Company’s Algorithms Have Made the Problem Worse.”

  • HUD v. Facebook - Charge: “Respondent also provides drop-down menus and search boxes to exclude or include (i.e., limit the audience of an ad exclusively to) people who share specified attributes. Respondent has offered advertisers hundreds of thousands of attributes from which to choose, for example to exclude “women in the workforce,” “moms of grade school kids,” “foreigners,” “Puerto Rico Islanders,” or people interested in “parenting,” “accessibility,” “service animal,” “Hijab Fashion,” or “Hispanic Culture.” Respondent also has offered advertisers the ability to limit the audience of an ad by selecting to include only those classified as, for example, “Christian” or “Childfree.””

ProPublica: “Facebook Lets Advertisers Exclude Users by Race.”

  • Imagine if, during the Jim Crow era, a newspaper offered advertisers the option of placing ads only in copies that went to white readers. That’s basically what Facebook is doing nowadays. The ubiquitous social network not only allows advertisers to target users by their interests or background, it also gives advertisers the ability to exclude specific groups it calls ‘Ethnic Affinities.’ Ads that exclude people based on race, gender and other sensitive factors are prohibited by federal law in housing and employment.”

Harvard Business Review: “How Targeted Ads and Dynamic Pricing Can Perpetuate Bias.”

  • “Even the largest of tech companies and algorithmic experts have found it challenging to deliver highly personalized services while avoiding discrimination. Several studies have shown that ads for high-paying job opportunities on platforms such as Facebook and Google are served disproportionately to men. And, just this year, Facebook was sued and found to be in violation of the Fair Housing Act for allowing real estate advertisers to target users by protected classes, including race, gender, age, and more.”

Seattle Times: “Facebook is Rejecting Ads for Stylish Clothing Made for People with Disabilities.”

  • “But Mighty Well’s experience is simply one example of a pattern that has been going on for at least two years: The algorithms that are the gatekeepers to the commercial side of Facebook (as well as Instagram, which is owned by Facebook) routinely misidentify adaptive fashion products and block them from their platforms.”

Aiding and abetting violent extremists

Amidst the backdrop of deep partisan divides and increasingly violent, racist, and hateful rhetoric on its platform, Facebook has profited off ads selling military gear to members of extremist groups on its platform. The company has also allowed let groups run recruitment ads and allowed advertisers to explicitly target Nazi sympathizers among other things.

BuzzFeed: “Facebook Has Been Showing Military Gear Ads Next To Insurrection Posts.”

  • “Facebook has been running ads for body armor, gun holsters, and other military equipment next to content promoting election misinformation and news about the attempted coup at the US Capitol, despite internal warnings from concerned employees..."Facebook has spent years facilitating fringe voices who use the platform to organize and amplify calls for violence,’ said TTP Director Katie Paul. ‘As if that weren't enough, Facebook's advertising microtargeting is directing domestic extremists toward weapons accessories and armor that can make their militarized efforts more effective, all while Facebook profits.’”

Tech Transparency Project: “Facebook Ran Recruitment Ads for Militia Groups.”

  • “For years, Facebook profited from militia group ads looking to attract new recruits. The messages reached tens of thousands of users. Facebook has allowed dangerous militia groups to run recruiting ads that reached tens of thousands of users and is still enabling such groups to organize on the platform.”

Los Angeles Times: “Facebook decided which users are interested in Nazis — and let advertisers target them directly”

  • “ Facebook makes money by charging advertisers to reach just the right audience for their message — even when that audience is made up of people interested in the perpetrators of the Holocaust or explicitly neo-Nazi music… Experts say that this practice runs counter to the company’s stated principles and can help fuel radicalization online.”

The Guardian: “Facebook is bombarding rightwing users with ads for combat gear. See for yourself”

  • “Roughly four out of five ads shown to my pro-Trump profiles sell tactical gear clearly intended for combat. This is not a new thing – it has been going on since I started looking at these accounts in June 2019, and it was probably going on much longer than that.”

Selling access to sensitive personal information

Platforms like Facebook and Google are building massive data warchests on the most intimate details of our online behavior, eroding privacy and threatening our own civil liberties. As Federal Trade Commissioner Rohit Chopra explains, “Facebook's massive, private, and generally unsupervised network of advertisers has virtually free rein to micro-target its ads based on every aspect of a user’s profile and activity.”

Amnesty International: “Facebook and Google’s Pervasive Surveillance Poses an Unprecedented Danger to Human Rights.”

  • “Facebook and Google’s omnipresent surveillance of billions of people poses a systemic threat to human rights, Amnesty International warned in a new report as it called for a radical transformation of the tech giants’ core business model. Surveillance Giants lays out how the surveillance-based business model of Facebook and Google is inherently incompatible with the right to privacy and poses a systemic threat to a range of other rights including freedom of opinion and expression, freedom of thought, and the right to equality and non-discrimination.”

Consumer Reports: “How Facebook Tracks You, Even When You're Not on Facebook.”

  • If you have a Facebook account, you probably know that the company uses information about the stories you share and react to, along with the data in your profile, to show you ads. But you may not know that Facebook also tracks you across the web, on many other websites that aren’t visibly connected to the social network.

Wall Street Journal: “You Give Apps Sensitive Personal Information. Then They Tell Facebook.”

  • “Millions of smartphone users confess their most intimate secrets to apps, including when they want to work on their belly fat or the price of the house they checked out last weekend. Other apps know users’ body weight, blood pressure, menstrual cycles or pregnancy status. Unbeknown to most people, in many cases that data is being shared with someone else: Facebook”

Helping government violate 4th amendment protections

Federal law enforcement agencies like Immigration and Customs Enforcement (ICE) purchase personalized data collected by ad-tech companies to track down and arrest immigrant families, often sidestepping Fourth Amendment civil liberties protections.

Vox: “Law Enforcement is Now Buying Cellphone Location Data from Marketers.”

  • “Companies that sell your cell phone location data to marketers are also selling that information to Immigration and Customs Enforcement (ICE), the government body known for detaining children in cages… ICE and its affiliated organizations at the Department of Homeland Security (DHS) have been using location information for “millions” of cellphones bought from marketers to track down and arrest undocumented immigrants at the US-Mexico border.””

Wired: “Can the Government Buy Its Way Around the Fourth Amendment?”

  • “DHS isn’t subpoenaing location records; it’s buying them from Venntel, a data broker that according to the Journal has ties to Gravy Analytics, a major adtech company.”

Rigging the game against small businesses

While Facebook and Google portray themselves as lifelines for small businesses, the truth is they’re simply charging monopoly rents for access to the digital economy. Their surveillance-driven stranglehold over the ad market leaves the little guys with no leverage or choice – which the tech giants use to exploit them. Researchers have found that buying targeted ads can cost merchants up to 500% more than what they pay for other ads, despite offering minimal benefit.

Wall Street Journal: “Inside the Google-Facebook Ad Deal at the Heart of a Price-Fixing Lawsuit.”

  • State attorneys general said in a lawsuit earlier this month that a 2018 business agreement between two digital advertising giants, Facebook Inc. and Alphabet Inc.’s Google, was an illegal price-fixing deal. Lawmakers are calling for further investigation. The companies say it was above board...Ten Republican attorneys general, led by Texas’ Ken Paxton, say Google gave Facebook special terms and access to its ad server, a ubiquitous tool for allocating advertising space across the web. This and other conduct by Google, they allege in the final lawsuit, harms competition and deprives ‘advertisers, publishers and consumers of improved quality, greater transparency, increased output and/or lower prices.’”

TechCrunch: “The Case Against Behavioral Advertising is Stacking Up.”

  • “‘What we found was that, yes, advertising with cookies — so targeted advertising — did increase revenues — but by a tiny amount. Four per cent. In absolute terms the increase in revenues was $0.000008 per advertisement,’ Acquisti told the hearing. ‘Simultaneously we were running a study, as merchants, buying ads with a different degree of targeting. And we found that for the merchants sometimes buying targeted ads over untargeted ads can be 500% times as expensive.’”

The Intercept: “Facebook Managers Trash their Own Ad Targeting in Unsealed Remarks.”

  • “The documents feature internal Facebook communications in which managers appear to admit to major flaws in ad targeting capabilities, including that ads reached the intended audience less than half of the time and that data behind a targeting criterion was ‘all crap.’ Facebook says the material is presented out of context.”

Harvard Business Review: “Facebook’s Misleading Campaign Against Apple’s Privacy Policy.”

  • “Facebook’s central claim is that small businesses will lose revenues if they can’t use personalized ads...Facebook, in our view, cherry-picked the data they thought best supported its case, and the cherry wasn’t even good. In pointing this out, we don’t mean to dismiss the concerns that many small businesses have about the changes Apple is making to its privacy policy. They’re real: Under Apple’s new plan, companies will have to explain their data-collection practices when submitting new apps or making updates, and many users won’t give permission to have their behavior tracked online. Facebook says it wants to stand up for small businesses in the face of these changes, which it is perfectly entitled to do. But disinformation about advertising effectiveness isn’t the way to do that.”

Stifling innovation and competition

Facebook and Google’s obsession with market dominance and profit have driven them to employ anticompetitive practices in the ad marketplace – colluding to protect their duopoly and power. Together, Facebook and Google control nearly 60% of the total U.S. ad market each year, bringing them over $219 billion in revenue for 2020.

NY Times: “10 States Accuse Google of Abusing Monopoly in Online Ads.”

  • “Ten state attorneys general on Wednesday accused Google of illegally abusing its monopoly over the technology that delivers ads online, adding to the company’s legal troubles with a case that strikes at the heart of its business. The state prosecutors said that Google overcharged publishers for the ads it showed across the web and edged out rivals who tried to challenge the company’s dominance. They also said that Google had reached an agreement with Facebook to limit the social network’s own efforts to compete with Google for ad dollars.”

Wall Street Journal: “Publishers Feel Validated by States’ Google Antitrust Lawsuit.”

  • “Publishing executives say they were surprised by the volume of internal Google documentation included in the suit. Communications between Google employees, much of it redacted, suggest the employees were aware Google advertising tools didn’t always help publisher clients make more money than other ad tools, according to the suit.”

U.S. Department of Justice: “Justice Department Sues Monopolist Google For Violating Antitrust Laws.”

  • “As one of the wealthiest companies on the planet with a market value of $1 trillion, Google is the monopoly gatekeeper to the internet for billions of users and countless advertisers worldwide. For years, Google has accounted for almost 90 percent of all search queries in the United States and has used anticompetitive tactics to maintain and extend its monopolies in search and search advertising.”

Rife with fraud and grift

Instead of being a boon for online publishers, surveillance advertising disproportionately benefits Big Tech platforms. Facebook made $84.2 billion in 2020 ad revenue and Google made $134.8 billion off advertising, while the surveillance ad industry ran rife with allegations of fraud.

Wall Street Journal: “Behavioral Ad Targeting Not Paying Off for Publishers, Study Suggests.”

  • “Behavioral advertising, which involves collecting data about readers’ online behavior and using it to serve them specially tailored ads, often through bits of code called cookies, has become the dominant force in digital advertising in recent years. But in one of the first empirical studies of the impacts of behaviorally targeted advertising on online publishers’ revenue, researchers at the University of Minnesota, University of California, Irvine, and Carnegie Mellon University suggest publishers only get about 4% more revenue for an ad impression that has a cookie enabled than for one that doesn’t. The study tracked millions of ad transactions at a large U.S. media company over the course of one week.”

Digiday Research: “Most Publishers Don’t Benefit From Behavioral Ad Targeting.”

  • “Behavioral targeting was billed by many ad technology companies as a win-win for all parties involved: Advertisers would be able to target their ads to highly-specific audiences, publishers would be able to wring more revenue from their ad inventory as a result, and consumers would see fewer irrelevant ads. But fast-forward a few years and many online publishers are now questioning whether behavioral targeting has done anything to help their businesses at all.”
  • “Digiday polled 40 publisher executives responsible for revenue generations at their companies on the impact behavioral ad targeting has had on their overall ad business. Thirty-three percent of respondents said they believe behavioral targeting has resulted in greater ad revenue for their company. For 45% of respondents, behavioral ad targeting has not produced any notable benefit, while 23% of publisher executives said behavioral targeting has actually caused their revenues to decline.” 

Digiday: “After GDPR, The New York Times Cut Off Ad Exchanges in Europe — and Kept Growing Ad Revenue.”

  • “The publisher blocked all open-exchange ad buying on its European pages, followed swiftly by behavioral targeting. Instead, NYT International focused on contextual and geographical targeting for programmatic guaranteed and private marketplace deals and has not seen ad revenues drop as a result, according to Jean-Christophe Demarta, svp for global advertising at New York Times International.”

News Media Alliance: “Big Tech Says Publishers Keep Majority of Ad Revenue, But Experience Suggests Otherwise.”

  • “Google not only dominates the search market, with more than 90 percent of all searches occurring through Google or one of its platforms, but it also controls nearly 70 percent of the online ad tech market. This overwhelming dominance allows Google to bring in 37 percent of all online advertising revenue in the U.S. It also allows Google to collect the data of the millions of users who search for news content via the platform — data that the publishers responsible for that news content are unable to access or benefit from.When you add in Facebook’s dominance of advertising on the social media end of things, the duopoly takes in nearly 60 percent of all digital ad revenue. That leaves only 40 percent for the rest of the internet — not just publishers — to fight over. That means that publishers are fighting against such tech giants as Amazon and Twitter, as well as blogs, search engines, and other news sites for the crumbs of revenue left over from the duopoly.”

Digiday: “‘A Daily, Hourly Fight’: Digital Ad Fraud is Worse than Ever.”

  • “Video is where the money is, and therefore where the fraudsters tend to focus. Ad tech firm Pixalate, which measures 55 million OTT device IDs monthly, recently reported that global OTT fraud rates are 19 percent globally. Based on that figure, the firm has estimated that marketers could lose to fraudsters up to $10 billion annually in OTT spend in 2020.”

Inc.: “Facebook Admits It Exaggerated Ad Metrics.”

  • “Facebook is announcing three big updates to its advertising measurement offering, in the wake of the high-profile error that saw the the site exaggerating its video views number...The Wall Street Journal had made the matter public with a report earlier that month, revealing the social network had exaggerated its "average viewing time" metric by potentially as much as 80% for more than two years.”

Gutting the journalism industry

Surveillance advertising has crushed the traditional news industry, especially local journalism. Facebook and Google's monopoly power and data harvesting practices have given them an unfair advantage, allowing them to dominate the digital advertising market, siphoning up revenue that once kept local newspapers afloat.

U.S. Senate Committee on Commerce, Science, and Transportation: “Local Journalism: America’s Most Trusted News Sources Threatened.”

  • “The root causes leading to the destruction of local journalism are complex but can be attributed to two primary factors. The first is that the rise of the Internet and digital information has fundamentally altered how Americans receive and digest the news, disrupting journalism’s historic business model… The second major challenge is that local news has been hijacked by a few large news aggregation platforms, most notably Google and Facebook, which have become the dominant players in online advertising. These trillion-dollar companies scrape local news content and data for their own sites and leverage their market dominance to force local news to accept little to no compensation for their intellectual property.”
  • “Already, 200 counties nationwide have no newspapers covering their communities, and half of all U.S. counties are down to just one, a problem that is particularly acute in the South. Newspapers have been forced to let go more than 40,000 newsroom employees, a full 60 percent of the journalistic workforce that creates unique local content.”
  • “Today, Google and Facebook alone control 77 percent of locally-focused digital advertising revenue. To put this market share in perspective, the ad revenues that Google is projected to earn this year will exceed the combined ad revenues of all TV and radio stations in the country.”

Bloomberg: “Google and Facebook Killed Free Media.”

  • “Worldwide newspaper industry revenue has fallen 30 percent since 2009, according to Magna Global. Revenue from TV commercials is growing barely in line with economic growth, and the television is losing its longtime position as advertising's top dog. The music industry makes more from sales of vinyl records than it does from music video ads on YouTube, the most popular place to listen to digital music. The web was once thought to be a cure-all for media industries' growth problems. Media's shift to the internet has meant bigger audiences, yes, but the piles of advertising money have shrunk or are barely growing.”

TechCrunch: “How Facebook Stole the News Business.”

  • “Again and again, Facebook has centralized attention typically spread across the web...The problem is that for society as a whole, this leads to a demonetization and eventual defunding of some news publishers, content creators and utility providers while simultaneously making them heavily reliant on Facebook. This gives Facebook the power to decide what types of content, what topics, and what sources are important. Even if Facebook believes itself to be a neutral tech platform, it implicitly plays the role of media company as its values define the feed. Having a single editor’s fallible algorithms determine the news consumption of the wired world is a precarious situation.”

The Guardian: “Why Facebook is Public Enemy Number One for Newspapers, and Journalism.”

  • “Facebook’s increasing dominance over advertising is causing the laying off of journalists, the people who produce the news that it transmits to its users. The logical conclusion to that process is not only the destruction of old media, legacy media, mainstream media, whatever you want to call it, but the end of journalism as we know it.”

Perpetuating addiction

Sensitive information ranging from addiction history to waist-line-measurements can be bought and sold to target online advertisements, exploiting medical conditions to turn a profit. 

Washington Post: “Facebook Has a Prescription: More Pharmaceutical Ads.” 

  • “The same opaque Facebook systems that help place an ad for a political campaign or a new shoe in a user’s feed also can be used by pharmaceutical companies, allowing them to target consumers who match certain characteristics or had visited a particular website in the past. The ability of drug companies to reach people likely to have specific health conditions — a far cry from a magazine or TV ad — underscores how the nation’s health privacy law, the Health Insurance Portability and Accountability Act (HIPAA), has not kept up with the times. HIPAA, which safeguards personal health records, typically does not cover drug companies or social media networks.”
  • “Health-care researchers say geographic data could be used to target communities with a high percentage of people with substance abuse disorders. Or data such as the size of pants bought online, the type of food purchased with a supermarket loyalty card and a cable TV subscription could be combined to target a potentially obese group of consumers.”

Forbes: “Facebook Considers Legal Action Against Company Using Social Network For ‘Brainwashing’ People Into Gambling.”

  • “The use of Facebook by gambling companies doesn't end with simple advertising. No, because a small number of firms have also been using Facebook to more indirectly manipulate gamblers into visiting online casinos and gambling websites. They've been employing the services of The Spinner, a London-based startup that provides social media “sniper targeting,” a practice that sees individual users targeted with a regular supply of posts focused on any given subject… “In 2019, a few online casino operators have started using this method to influence their existing players, mostly slots players, to login and play more often," he says. "Those players are being exposed to hundreds of articles with titles like ‘Wisconsin man hits $1.3 million jackpot at Flamingo’ or ‘Lucky local cashes over $150K jackpot at Vegas-area casino’ on their social media feeds."

Promoting harms to children

As a result of patchwork regulations and loopholes, advertisers are able to use data collected from children’s online profiles from platforms like Facebook and Google, and exploit it. As a result, children are then served ads that promote a variety of harms ranging from sugary drinks to tobacco use. 

The Guardian: “Children 'Interested In' Gambling and Alcohol, According to Facebook.”

  • “Facebook has marked hundreds of thousands of children as “interested in” adverts about gambling and alcohol, a joint investigation by the Guardian and the Danish Broadcasting Corporation has found. The social network’s advertising tools reveal 740,000 children under the age of 18 are flagged as being interested in gambling, including 130,000 in the UK. Some 940,000 minors – 150,000 of whom are British – are flagged as being interested in alcoholic beverages. These “interests” are automatically generated by Facebook, based on what it has learned about a user by monitoring their activity on the social network. Advertisers can then use them to specifically target messages to subgroups who have been flagged as interested in the topic.”

Reuters: “Children Prey to Online Ads of Harmful Products, Regulation Needed: U.N. study.”

  • “Children and adolescents are being bombarded with ads on social media promoting harmful products from fast food to tobacco and alcohol, according to a United Nations-backed report on Wednesday that called for regulation. Advertisers also sell data on children obtained from electronic games to global tech giants, said the report’s lead author, Anthony Costello. ‘Global harmful advertising is targeted at children especially around things that will affect their development and health - things like promoting sugar, fast food, tobacco, alcohol, gaming and gambling,’ Costello told a news briefing.” 

CNN Health: “Physicians Group Calls for Legislation to Regulate Digital Advertising and Its Effect on Kids.”

  • “No less than $900 million is spent each year in the advertising industry, including marketing snack foods, video games and sugary drinks to kids each year...children who are exposed to those ads are more likely to consume high-calorie, low-nutrient food and beverages, studies have shown. Ads can be correlated with the use of tobacco products and electronic cigarettes, as well as alcohol and marijuana."
  • “‘Children are uniquely vulnerable to the persuasive effects of advertising because of immature critical thinking skills and impulse inhibition,’ the authors of the policy explain. ‘School-aged children and teenagers may be able to recognize advertising but often are not able to resist it when it is embedded within trusted social networks...or delivered next to personalized content.’...The data that these companies collect from children in order to serve up ads can end up hurting kids later.”

University of Michigan Health Lab: “Some Children at Higher Risk of Privacy Violations From Digital Apps.” 

  • As your preschooler plays an alphabet game, does a puzzle or dresses up a favorite character through an app on a phone or tablet, companies may be stealthily collecting their personal information for marketing purposes...while federal privacy laws prohibit digital platforms from storing and sharing children’s personal information without verifiable parental consent, those rules aren’t always enforced, researchers find. And privacy violations are most likely to affect kids from lower-education households. Children raised by parents without college degrees showed two to three times higher rates of digital information being transferred to third parties, according to the study that appears in JAMA Pediatrics. “Our study suggests that potential violations of child digital privacy laws are common, and social economic factors may influence which children are at greater risk for these violations,” says senior author Jenny Radesky, M.D., developmental behavioral pediatrician and Michigan Medicine C.S. Mott Children’s Hospital.”

BBC: "Google and Facebook Under Pressure to Ban Children's Ads."

  • "'The fact that ad-tech companies hold 72 million data points on a child by the time they turn 13 shows the extent of disregard for these laws, and the extraordinary surveillance to which children are subjected,' the letter reads. 'There is no justification for targeting teenagers with personalised ads any more than there is for targeting 12-year-olds.'"

Connecting scammers with vulnerable users

The murky and invasive world of targeted advertising has paved the way for a variety of new revenue streams for fraudsters: targeting ads to sell fake products, operating phishing schemes, and developing intricate recruitment networks to game the system – lining the pockets of snake-oil-salesmen and Big Tech platforms at everyday users’ expense. 

Buzzfeed: “Facebook Gets Rich Off of Ads that Rip Off Users.” 

  • “A BuzzFeed News investigation has found that in relentlessly scaling its ad juggernaut — which is projected by analysts to bring in $80 billion this year — Facebook created a financial symbiosis with scammers, hackers, and disinformation peddlers who use its platforms to rip off and manipulate people around the world. The result is a global economy of dishonesty in which Facebook has at times prioritized revenue over the enforcement of policies seemingly put in place to protect the people who use its platform.
  • “Company insiders said the ad platform’s issues are exacerbated by Facebook's continued reliance on a small army of low-paid, unempowered contractors to manage a daily onslaught of ad moderation and policy enforcement decisions that often have far-reaching consequences for its users. Internal documents and messages, as well as interviews with eight current and former employees and contractors, show that Facebook's ad workers have at times been told to ignore suspicious behavior unless it “would result in financial losses for Facebook,” and that the company is pushing to grow revenue in regions that flood its pages with scams.”

Bloomberg: “How Facebook Helps Shady Advertisers Pollute the Internet.” 

  • “Scammers from around the world gathered for a conference at a renovated 19th century train station in Berlin. All the most popular hustles were there: miracle diet pills, instant muscle builders, brain boosters, male enhancers. The “You Won an iPhone” companies had display booths, and the “Your Computer May Be Infected” folks sent salesmen. Russia was represented by the promoters of a black-mask face peel, and Canada made a showing with bot-infested dating sites. They’d come to mingle with thousands of affiliate marketers—middlemen who buy online ad space in bulk, run their campaigns, and earn commissions for each sale they generate.” 

Buzzfeed News: “How A Massive Facebook Scam Siphoned Millions Of Dollars From Unsuspecting Boomers.”

  • “...since 2016, Ads Inc. and black hat marketers working with the company have spent more than $50 million placing ads on Facebook through thousands of rented accounts. BuzzFeed News also uncovered how Ads Inc. utilized overseas workers in the Philippines to manage its account rentals and legions of associated Facebook pages, and built up a network of stay-at-home moms in the US to recruit friends and family members to rent their accounts. Taken together, documents, recordings, and other information provide an unprecedented, detailed inside look at how black hat affiliate markers weaponize targeted advertising…”