When I first heard Tim Hwang speak about Subprime Attention Crisis at Logic Book Festival, he began by saying that the problem with the discourse about Big Tech is that both its champions and its critics give it too much credit. That is, the marketers overhype what the technology can do, and the rest of us are eating it right up. (Anyone who's worked at a startup gets it: Engineering is always playing catch-up to Sales's promises.) His book, then, is a case study about why taking these claims at face value is not only gullible, but a threat to the health and stability of our digital economy.
Hwang argues that the modern digital ad market is on its way to becoming a bubble, much like the subprime mortgage crisis in 2008. Today, consumers ignore ads, Facebook and Google hide behind opaque, self-serving definitions of "views" and "conversions," and everything from overt fraud (click farms) to clever accounting (Facebook's overstatement of video views) runs rampant. It feels like everyone, from the digital marketers to the industry researchers, has a perverse incentive to act like digital ads work better than they do, despite study after peer-reviewed study questioning this assumption.
Hwang is also a fantastic econ teacher—and I'm saying this as someone who had no idea how the 2008 financial crisis worked until last summer. He breaks down the programmatic ad market step by step, walks you through its similarities to the mortgage market of the late aughts, then provides numbered suggestions to reform the system—all in a tight little 178-page volume. With clever analogies (e.g. one unit of attention: one fictionalized Standardized Chicken Lot) and a clear-cut narrative structure, you won't need a pre-existing passion for two-sided market design to get something out of this read.
By the end of the book, Hwang starts describing the social consequences of having the whole Internet—from journalism to Google Maps—run on ad dollars: surveillance capitalism, addictive feeds, political polarization. Each of his carefully numbered arguments builds toward a picture of the ad industry as an increasingly precarious house of cards, so it's no surprise that he concludes that "Rather than trying to fix a broken market, we should work toward a controlled demolition that reduces its influence in the long run." Hwang ends by proposing a few of these possible reforms, such as industry-independent research organizations, mandatory disclosures for vendors of programmatic ads, and legal teeth to punish frauds.
Overall, I found Subprime Attention Crisis persuasive, if mildly hyperbolic: the narrow reforms proposed in the last few pages don't seem to match the urgency of the the crisis-like descriptions of the first three-quarters. In my opinion, the bigger challenge of the next 5 or 10 years—and what I'm most interested in asking Hwang about next Thursday—is how we'll actually wean the web off ads and toward something more sustainable.
(mar 10, 2021)
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