The bads of ads

Market failure

One particularly important market failure in practice might be the lack of awareness by publishers about the loss from advertising; anyone can calculate the immediate revenue from carrying advertising, but the loss in readership is far harder to measure, creating a strong bias toward carrying too much advertising. It's rarely measured, but does seem to be large enough that for many publishers, it would substantially decrease the estimated profit, or even turn it into a loss. (I am pretty sure the latter was the case for me.) Across an entire society, that might translate to quite a lot of deadweight losses due to excess ads.

To the extent advertising is aimed at raising the name recognition and thus market share of one product over its similar rivals, it is zero or negative sum

I want to push back a little on this point. In this scenario, the advertisement does actually provide a useful costly signal to the consumer: it makes sense for a firm to buy advertising when they expect that it will induce enough sales to earn back the initial cost in profits. Inversewise, when a firm is not confident enough in their product, they will not buy advertising. While there may be different factors that go into this, a large part of that is whether or not other existing / potential customers have a positive opinion of the brand, which is generally correlated with the quality (per price) of the brand's product. This means that if I see substantially more advertising for Brand X than for superficially-similar Brand Q, I can reasonably assume that Brand X is likely to have a better product than Brand Q.

This effect creates value for both me and the superior brand, even in a situation that seems superficially zero-sum. Of course, if the two products are literally identical, then this is irrelevant. But most products you see advertised are not perfectly identical to their competition. There are also other factors, such that companies with more pre-existing resources can buy more advertising than a less-resourced company - but even then, if the underdog's product is good enough, their investments in advertisements will have a better payoff, allowing them to bootstrap to the point where they can afford a similar amount of advertising.

It bothers me on a fundamental level that we've been conditioned to accept ads as "the price of the internet": I want to pay $5 for an app with no ads/IAP, not be advertised to forever. I want to pay $5 a month to listen to a podcast without ads, not have my precious time taken up with podcast hosts (aka People I Trust) telling me about how much they love whichever meal box kit is paying them this year. 

I put my money where my mouth is, btw: I support ad-free podcasts, or podcasts with unlockable ad-free versions, on Patreon (as ad-free is becoming a more common perk, it's beginning to get expensive, but podcast-listening is my main hobby). I messaged one small podcaster about why she didn't have ad-free versions of her podcast as a patreon perk and she said the reason for it was because her advertisers have a clause stating that there must be no ad-free versions, because apparently the more devoted listeners (the ones who trust the podcasters the most) are their preferred target market. 

I also emailed a podcaster I listen to when her podcast ran an ad for a 'product' I knew she wouldn't support if she knew some easily googleable backstory, and she emailed me back, pulled the ad, and said that she hadn't used the product and so didn't know that the product was counteractive to her 'brand'. Obviously, you know a lot of these endorsements are fake, but I find podcasts especially insidious as the podcaster-listener relationship is surprisingly intimate. 

So yeah, I completely agree with you. I'm voting with my dollar, to try and make the "paid" business model more sustainable for internet services. Thanks for an enlightening post!

I think of ads like a jungle.

The jungle is full of beautiful things, which are optimized to extract value from me. Some of them just want me to carry their pollen; others want to paralyze and eat me. None of them care much for what I want; the jungle was produced by eons of violent battle for survival, and every single piece of it is ruthlessly optimized for something orthogonal to human values. And yet, the outputs of that violent battle - the trees, the flowers, the birds - are beautiful.

As with a jungle, it's not an aesthetic which appeals to everyone. But it feels weird to me to call ads "bad", in much the same way that it feels weird to call a jungle "bad".

What would good and ethical advertising look like? Maybe I decide that I want to be advertised to now, and go to my preferred advertising venue.

Advertising you want to look at is called "news [LW · GW]", "media" or "product placement".

Mod note: the first image in the post was 27000px wide, making it over 10MB large. I reduced it's size to safe the poor data plans of our mobile connections and to make the post (and the frontpage) load a bit faster.

I like to think of advertising as commercial propaganda. That is technically what it is. Whereas political propaganda's purpose may be to influence people to support a political belief, commercial propaganda is to influence people to support a commercial enterprise. 

People tend to think of political propaganda as something from World War 2 and authoritarian regimes. But it was used in the West and it never went away. It just became more sophisticated over time and a part of that was re-branding it to "spin" or "public relations". The original word is useful because it is accurate and it highlights the obvious negative consequences of the practice. 

I would encourage Katja to try to flip some of these negatives of advertising on their head. After all, the growth of advertising is directly related to the greatest of human prosperity ever. The two are connected. For me, personally, the farthest I have ever been from public, corporate advertising was when I toured Havana, Cuba. 

I want to raise that I am rarely in the London Underground, and when I am I do find the ads kind of fantastical and exciting. Of course, perhaps I'm buying into a fraud.

I do think that architecture and design of major city centers has the potential to be a lot more unique if they don't have to be just loads of massive screens.

From a tort standpoint, I think you'd have to show breach of duty, and from a contract standpoint (even a theoretical one) a failure to comply.  In either theory, what caused the duty to give you a pleasant view or experience to exist for the advertiser or owner of a space?  From a more utilitarian standpoint, how do you measure the costs (and benefits, where they exist) to viewers in order to compare to the benefits to the advertisers and space-owners?

Is there a significant difference between advertising, and ugly/offensive public art?   Seems like the objections apply to both, but the advertising at least brings revenue to the space owner (possibly offsetting cost to consumer/taxpayer), where the "art" is pure expense.

What would good and ethical advertising look like? Maybe I decide that I want to be advertised to now, and go to my preferred advertising venue.

Epistemic status: throwing ideas

Ads exist because people aren't aware of all the products that exist. At its best, an ad manages to link a product with a client who needs it. Ethics in advertising should focus on maximising the chances of that, while minimizing side effects.

To me, the most obvious way to get that is that advertisings only assert and imply true things. As a bonus, they would avoid shocking the receiver needlessly, or uglifying their spot too much.

On a system level, the medium displaying ads would rate their quality (based on the aforementioned criteria and others), and the duration an ad is displayed would be commensurate with its rating.

I also hate ads, but to play devil's advocate:

1. It works as a sort of "progressive tax". Everyone pays the same amount of "stolen" attention for "free" internet, regardless of how much money they have. And wealthy people lose more potential earnings for the same fixed amount of time lost to the ad. 
2. It serves as an inoculation for more nefarious forms of manipulation. In advertising, everyone gets a chance to see what manipulation looks like when the manipulator's motivations are relatively obvious. So when some troll tries to convince you of a conspiracy, or pull you into a pyramid scheme, you might be a little more skeptical of it. ...maybe.

And now to play double devil's advocate:

1. To get the "progressive tax", I'd prefer to pay real money than have the oppressive shroud of advertising over everything. Also, people aren't paying the "same amount of attention". It's the easily manipulable people who are giving the rest of us a free ride. So in that sense, it's more like a regressive tax on the gullible. 
2. I'm not sure how well ads actually work as inoculation. It's a nice thought, but it also could be that it normalizes that sort of manipulation. People primed by advertising may actually be more vulnerable to other manipulations. 

I don't think we can do much to change the culture of advertising until we give people the tools to defend against it.  And a nice side benefit is we'd also be giving them the tools to defend against more nefarious manipulations.

One or more of the images in this post is causing my browser (chrome on android) to crash with a "could not load the page" error. The page loads fine until I scroll down to just below the "theft of a precious thing" section. If I scroll past that section quickly enough that it doesn't try to load the images there, then I can reach the comments without crashing.

I've had the same thought. Does the advertising market satisfy good goals [? · GW]? Probably not. What do you think the goals of the market should be?

It bears noting that ads can do good - they can spread important messages. They can encourage people to make purchases that they actually benefit from. And they can help especially with launching new projects that people aren't yet aware of. 

So ideally the advertiser would pay a price for inflicting these negatives, so that we would get the benefits with fewer of the costs.

This metaphor doesn't work, unfortunately. You have huge ability to avoid advertising. Don't go on the internet or watch TV. Turn your eyes away from billboards.

Advertising is an annoyance, closer to noise than theft. It is extremely annoying. Like noise, it may have very bad effects on us. Perhaps that's an argument for regulating it somewhat more tightly: laws against advertising in public places seem reasonable to me, which is what most of your pictures focus on.

You are mostly right, but also ads pay for a lot of things: for example, for most of the Internet. Of course you might prefer to be able to pay for the same services in other ways. But, there are people who can't afford to pay. They are probably not the intended target audience of the ads, but they get free things nevertheless. So, to some extent, ads extract value from negative sum contests between corporations and give it to the public, which might be regarded as beneficial.