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posted by martyb on Sunday July 19 2015, @09:46PM   Printer-friendly
from the averse-to-adverts dept.

Australian Broadcasting Corporation carries a piece of analysis/commentary on the societal ethics of advertising. I found it fascinating by the depth of arguments (true, there is a bias, but it's likely that most of us soylents share it); do take your time to read it in full, my attempts to summarize it below is bound to fail:

Advertising is a natural resource extraction industry, like a fishery. Its business is the harvest and sale of human attention. We are the fish and we are not consulted.

Two problems result from this. The solution to both requires legal recognition of the property rights of human beings over our attention.

First, advertising imposes costs on individuals without permission or compensation. It extracts our precious attention and emits toxic by-products, such as the sale of our personal information to dodgy third parties.

Second, you may have noticed that the world's fisheries are not in great shape. They are a standard example for explaining the theoretical concept of a tragedy of the commons, where rational maximising behaviour by individual harvesters leads to the unsustainable overexploitation of a resource.

A classic market failure

The advertising industry consists of the buying and selling of your attention between third parties without your consent. That means that the cost of producing the good — access to your attention — doesn't reflect its full social cost.

...Since advertisers pay less to access your attention than your attention is worth to you, an excessive (inefficient) amount of advertising is produced.

...It's a classic case of market failure. The problem has the same basic structure as the overfishing of the seas or global warming. In economics language, people's attention is a common good.

Why now?

First, as we have become more wealthy our consumption decisions have become more valuable...

Second, a shift in social norms has made it more acceptable to sell other people's attention.... Anyone in a position to access our attention, like the managers of pubs or hockey arenas, will be approached by multiple companies offering to pay a fee to install their advertising screens, banners, or cookies...

Thirdly, technology has made advertising even more intrusive. Not only is it now possible to print advertisements on grocery store eggs and to put digital displays above pub urinals.... Every moment we spend on the internet or with our smart phones is being captured, repackaged and sold to advertisers multiple times...

Counter-counter arguments: How economists defend advertising and why it isn't enough

  1. The direct value of advertising First is that advertising gives consumers valuable information about the sellers and prices of products they want to buy. The favoured example here is the classified ads section in newspapers.... Perhaps it was the case in 1961 that consumers struggled to find such information for themselves. But it is hard to see how this can still be the case in the internet age...

    Advertising can be used to reduce competition: high spending by rich established players drowns out information from smaller newer competitors and thus creates an entry barrier, converting markets to oligopolies...

    Second is the counter-intuitive claim that brands communicate their trustworthiness by their conspicuous expenditure on advertising not by what it actually says....[but]Companies wanting to demonstrate their confidence in their products don't have to waste so much of our time to do so. There are all sorts of more constructive ways of spending money conspicuously.

    Third, is the social status that advertising can confer on a product and its consumption. What's the point of buying a Rolex or Mercedes unless the people around you know that it is expensive and are able to appreciate how rich and successful you must be? The business logic here is sound, but not the moral logic.

  2. Financing public goodsAdvertising is the financial model for many pure public goods like terrestrial television and radio, as well as club goods like newspapers, Google's search/email and Facebook... Advertising provides an alternative revenue source that makes it possible to profitably provide such services universally at the marginal cost of production — that is, zero.

    There are alternatives. If these things are so valuable to society there is a case for supporting them from with taxes — grants, license fees (many national broadcasters) or payments for ratings. This is a well-established system for funding public and club goods...

    Alternative models, like that of Wikipedia, are sometimes possible and are more socially — that is, economically — efficient. Wikipedia's value to consumers is in the hundreds of billions of dollars while its annual operating costs are only $25 million...
      Obviously Wikipedia's operating costs are so low, like Mozilla's, because of its volunteer labour force. But that fact just makes one wonder why we couldn't have a "democratic" Facebook too, and whether that would not be superior from a social welfare perspective to the current "farming model" of extracting maximum value from its members-cum-livestock.

The right to preserve our attention

Advertising is a valuable commercial opportunity for businesses with access to consumers' attention, or their personal information. For the companies that buy and sell our attention it is — as all voluntary transactions must be — a win-win. But advertising lacks the free market efficiency that is claimed for it. Advertising is made artificially cheap, like the output of a coal burning power station, because the price at which it is sold doesn't reflect its negative effects on third parties — us.


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  • (Score: 4, Interesting) by Grishnakh on Monday July 20 2015, @01:13AM

    by Grishnakh (2831) on Monday July 20 2015, @01:13AM (#211236)

    OK, I guess I'll be one the one dissenting voice here in all this anti-advertising vitriol.

    Yes, I do agree that most advertising is unnecessary, annoying, and a waste of resources and people's time.

    However, not *all* advertising is bad or worthless. Without advertising, you probably wouldn't know about a lot of products. I'll give a few examples: you're having some kind of problem with your car or whatever, and start Googling for an answer. On the text ads on the right, you see a small ad for a product that looks like it might fix your problem. You click on it, read about it, and it looks like just what you need, even though a minute before you didn't even know it existed.

    You're shopping for something on Amazon (or some other larger retail website), and you've found a product that looks perfect for whatever you need it for. On the page there's a section that says "people who bought this also bought these products...". One of these looks like a great accessory for this thing you bought, so you buy that too, even though you weren't specifically looking for it.

    You're driving through an unfamiliar town and you're hungry. You see a building ahead with a lighted sign out front that says "Gino's Italian Restaurant"; you like Italian so you stop there. Without a highly visible sign out front, you would have passed it by.

    Now of course, someone will probably try to argue that some of these aren't "advertising", but they really are. They're trying to get you to buy something that you may or may not have been specifically looking for; they're all forms of advertising.

    There's plenty more examples like this. Advertising can be really useful for educating consumers about the existence of products/services, and not all of it is uninvited. Any company's website is basically an advertisement. If you want to buy a car and you go to a dealership's website to see what they have in stock, that's an advertisement, as well as an informational resource (no point bothering to visit in person if they have nothing you want on the lot), for instance.

    I do wish we could get rid of a lot of the uninvited advertising out there. It's annoying, ugly, and wastes our time. But some of it really is useful.

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  • (Score: 2) by stormwyrm on Monday July 20 2015, @02:51AM

    by stormwyrm (717) on Monday July 20 2015, @02:51AM (#211258) Journal
    TFS talks about advertising as being a commons, and advertising is the exploitation of such a commons. Beneficial things come from all such exploitation of course, just as we get energy from burning fossil fuels and releasing the resultant exhaust into the atmosphere, and advertising helps to provide revenue for media such as television and the Internet, but all such exploitation comes at a cost. Burning fossil fuels has as a cost in the form of air pollution, and the cost of advertising can be thought of analogously as being a sort of mind pollution [johnleach.co.uk]. Seeing a sign for an Italian restaurant when I'm hungry and feel like Italian food is like getting energy from burning fossil fuel. Seeing a sign for an Italian restaurant when I'd rather eat something else is a few moments of my attention stolen from me that I will never get back again, and is like inhaling a whiff of smog. Now, some advertisers get it into their heads that customising the ads they show so they produce ads that are targeted to their viewers, but that requires tracking people to know what they can about them, but that's just a different sort of mind pollution, and arguably a more pernicious sort, like adding tetraethyl lead to gasoline (getting close to a car analogy here!). A balance needs to be struck here and I don't know if it is possible to impose it without having something like a government involved. There are laws in some jurisdictions that regulate advertising in public places, and there are also laws regulating the use of things like tracking cookies and so forth.
    --
    Numquam ponenda est pluralitas sine necessitate.
    • (Score: 2) by Grishnakh on Monday July 20 2015, @03:47AM

      by Grishnakh (2831) on Monday July 20 2015, @03:47AM (#211272)

      Seeing a sign for an Italian restaurant when I'm hungry and feel like Italian food is like getting energy from burning fossil fuel. Seeing a sign for an Italian restaurant when I'd rather eat something else is a few moments of my attention stolen from me that I will never get back again, and is like inhaling a whiff of smog.

      The problem is that if no restaurants advertise at all (meaning they don't even have road signs, and they don't sign up with Google Maps so you can't even look them up), then you're going to go hungry unless you brought some food with you on your road trip, and most restaurants will close for lack of business (those that stay open will only survive by word-of-mouth, which isn't that much help when you're traveling).

      like adding tetraethyl lead to gasoline (getting close to a car analogy here!).

      Tetraethyl lead was necessary back then for engines to run reliably, and they didn't understand the downsides so they didn't bother looking for better solutions until they figured that out. It's not like they just put that in there for the hell of it, or to make money in some sneaky way.

      There are laws in some jurisdictions that regulate advertising in public places, and there are also laws regulating the use of things like tracking cookies and so forth.

      This is most likely what we need, because when given free reign, advertisers usually go way too far. So, for another car/restaurant analogy, this is exactly why most locales have sign ordinances, limiting where signs can be placed, how large they can be, how distracting they can be, etc. So it's perfectly acceptable to place a sign on the road in front of your business so people can find you (even if they weren't specifically looking for you), but you can't make it billboard-sized in most municipalities, because many businesses would do just that if they could, so they had to make laws against it.