Insidious Advertising

-- By LauraZhang - 05 Nov 2016

Consumers want advertisements. We want services and information and entertainment, and we don’t want to part with our hard-earned money. But this is a capital economy – services and information and entertainment do not come for free. Someone has to pay for them. Advertisers are eager to pay for these services in exchange for our ears and eyeballs. We as consumers are generally happy with advertisers paying for much of what we use in our day-to-day lives.

Unobtrusive Ads: A Welcome Marriage of Advertisers and Consumers

When an Italian phone company introduced a free phone service in exchange for agreements to listen to commercials, there was so much enthusiasm that the phone company could not gather equipment fast enough to meet demand. One of the customers interviewed was “as gleeful as a child getting free ice cream” as he gushed about the service.

Advertising, taking advantage of our desire for free things, has now become ubiquitous. The industry has become very competitive, and banner ads are no longer making nearly as much money. Now, we as consumers have higher standards for our advertisers. We understand that the services we use need to be paid for, but we don’t want to be inconvenienced by that fact. We want to pretend as if the advertisements are not there.

CNN’s travel page blends travel articles with reservation services from a travel agency. Search engines featured sponsored content at the very top of their search results. Publishers paid Amazon for prominent review treatment for their books. These examples are the tip of the iceberg.

Reddit, when trying to figure out how to monetize their site, had to think most of all about their culture. Too hasty and too obtrusive an advertising platform would quickly alienate users, and Reddit would go down the drain by way of Digg. The advertising platform must somehow integrate seamlessly into Reddit’s communities. Reddit’s strategy is to place ads within their discussion threads that look like comments, thereby disrupting minimally the user experience.

Buzzfeed engages in native advertising too – their triple-digit millions in revenue is mostly derived from Buzzfeed Creative, which creates advertising content for brands that look similar to its own editorial content. The ads, save for a little blurb at the top and bottom of a page, look identical to non-sponsored content.

Barry Schuler, the head of America Online’s flagship on-line service, echoes the sentiment of wanting convenient content: “Our users don’t care what the financial relationship is between us and the provider of the content they see. They care about whether it is convenient and does what they want it to.”

The Case Against Blurring the Line

Most tech-savvy consumers at this point have a vague idea that much of what they see online is sponsored content. The sponsorship is still somewhat required by law to be somewhat indicated on a page – Buzzfeed features the sponsoring company alongside the link and on top of the article page, Google puts the phrase “sponsored content” alongside sponsored links. Once consumers see enough of these disclaimers, we tend to start assuming that a good portion of what we see is sponsored.

But to what extent do these sponsors and these platforms pull the strings? I think the most insidious deception is how much power these media companies actually wield. The Telecommunications Act of 1996 opened the floodgates to an information superhighway in which broadcast services competed for the attention of consumers in order to maximize advertising revenue. A few years later, the FCC lifted regulations banning a network from owning more than one station in a given city. The regulations had been originally put in place to ensure that viewers were getting a sufficient diversity of viewpoints. Since the regulations were lifted, the bigger television companies with more revenue acquired the ability to push out smaller broadcast networks, thus increasing their own relative influence over the consumer’s exposure to news.

Not only have these individual large companies acquired more power over consumers, but they also have banded together to deliver goods from the same platform. Twelve major broadcasters in the year 2000 created “iBlast,” a national network using the airwaves and TV antennas to deliver downloads of digital media.

AT&T also lobbied the government to put in place provisions that would allow it to expand further in the cable industry. These provisions would kill a plan to create low-power FM stations for local churches and schools. By blocking local radio stations from broadcasting, AT&T would amass even more power and control even more of what consumers receive as news.

These broadcast systems are one-way streets of information – information is delivered to the consumer, but there is no way for the consumers to engage in dialogue with the broadcasters about the information. Essentially, the broadcasters are telling the consumer what to think without the consumers having the chance to argue back.

Most consumers are savvy enough to know that a great deal of what they consume is sponsored content. They may understand that when they search for something, they usually don’t need the “best” result – “good enough” in most cases will do. Sponsored content offers up “good enough” on a platter and obscures the “best,” but when it comes to trivial lifestyle choices like which restaurant to go to or which TV show to watch, it doesn’t matter so much for individual consumer satisfaction that we aren’t getting the best. What does matter, however, is the aggregated impact of sponsorships going through only a few large media conglomerates. These media conglomerates have the influence and power to shape our desires and our knowledge bases, and can be motivated to negatively manipulate us with the right economic incentives from sponsors. The great deception here is that the small manipulations that we concede to for our own convenience are really a lot more dangerous than we think.