Subprime attention and the end of your free Gmail account

Tim Hwang’s new book Subprime Attention Crisis makes the case digital advertising is a lot like America’s 2008 subprime mortgage crisis.

The gist being in the lead-up to the mortgage crisis, sellers bundled up lots of mortgages into good batches and bad batches. The good ones were likely to pay out and the bad ones to default.

The problem was the people buying these investment portfolios couldn’t tell and didn’t know whether they were buying a good batch or a bad batch. Once the bad ones started to default, buyers lost confidence in the whole market, making even the good ones look bad by association.

The attention crisis, Hwang argues, is a lot like 2008’s subprime mortgage crisis. But instead of big investment banks, Facebook and Google have bundled up attention and metrics like clicks and likes, but they do a very good job of hiding which ones are good and which ones are bad. The comparisons stop there, when you consider digital advertising has ad blockers and people who just plain ignore the ads.

About halfway through the book is a big meaty section I almost want to copy entirely. But because it’s somewhat long for a blog post, a few excerpts will have to do:

When they launched in 1994, the first banner ads generated a remarkable click-through rate of 44 percent. …Today, banner ads, command far less attention. One data set drawn from Google’s ad network suggests that the average click-through rate for a comparable display in 2018 was .46 percent. For some industries, that number is as low as .39 percent. That’s about one in every two hundred people. Recent attempts to measure click-through rates on Facebook ads reveal similar rates of less than 1 percent.

…Even the sub-1-percent click-through rates may overstate the effectiveness of ads on some platforms. On mobile devices, close to fifty percent of all click-throughs are…accidental “fat finger” clicks.

(I hear from people a lot, “But we do so much better on phones!” No, you don’t.)

In 2009, one study estimated that eight percent of internet users were responsible for 85 percent of all advertisement click-throughs online.

Another “large-scale experimental study of online search ads in 2014 concluded that, “brand-keyword ads have no measurable short-term benefits.” And, “Ironically, ads generated engagement mostly among ‘loyal customers otherwise already informed about the company’s product.’ The ads, in other words, were an expensive way of attracting users who would have purchased anyway, leading to ‘average returns that are negative.’.”

He goes on to cite how internet users age 20-40 experience “little or no effect from the advertising”. And despite being just 5% of all Internet users, people age 65+ are responsible for 40 percent of the total effects observed.

All this is to say most online advertising is “vaporous”. The sort of confusing, opaque, problems we had in the mortgage failures but now in the “attention advertising market”.

Much of this is driven by poor ad placement (looking at you, Google Ad Network), putting the wrong things in the wrong places (like advertising for bananas or whatever on Facebook. Who cares?), and ad blocking that is highly prevalent in the United States and Europe and expanding fast in Asia.

And we haven’t even mentioned all that Hwang says about fraud, click-farms, bots, and other junk. He estimates enough money is wasted to fraud in all online advertising each year to equal the entire current value of Facebook. It’s as much as 20% of all online ad clicks.

I have said this a zillion times:

  • Online advertising is full of fraud.
  • If you are paying for ads on Google or Facebook, it had better be the right kind. For Facebook, that’s “awareness campaigns” (which are impossible to calculate value and lead to this vapors nature of things) and digital goods that can be handled on-device, like downloading an app. For Google, that’s narrowly defined buyer-intent searches like hiring a handyman.
  • Older people can’t discern the difference between an ad and something not an ad. On the upside for some advertisers, seniors hold just about all the world’s wealth, so it can be lucrative. If you have to advertise to teens, you’re better off with a billboard by the high school.

And now that I’ve read this book I think another thing is likely to happen: a complete collapse.

Hwang thinks we should do a “controlled demolition” so the bottom doesn’t fall out. But I think the bottom will fall out eventually as small businesses (which account for 80% of all of Facebook’s advertising revenue) wise up to the realization this doesn’t work. And it doesn’t work because most of the ads are dull, boring, and just plain bad with lousy copywriting and cheesy stock photos.

Already I tell clients they need ever-more money to have any chance. $300 a month doesn’t cut it anymore. To have any hope, you need $1500 a month for AdWords or Facebook, depending on your market. Godspeed if you’re advertising insurance, financial services, or attorneys. Or to anyone under the age of 35.

If advertising online completely fails, Hwang says (and I agree) that we’ll see a lot of publications completely vanish. Ad sales won’t be enough anymore because no one will trust any of the ads, despite static ads being no more or less more effective than programmatic, text-based, or targeted ones. Paywalls will abound. No more free Google Maps or Gmail, which rely entirely on Hoovering up data for advertisers. There could be pay-to-play placement in search results (as in, to be included at all, not just as the top in the ads).

Increasingly I think publications like The NY Times, Wall Street Journal, and others that have paywalls are playing it right. And companies like Apple and Amazon will be in a good position to continue delivering maps and other “free but not free” services to their customers who pay for physical things.

One obvious downside to this pay-to-play approach is low-income people are going to be left out of a lot. Right now, the web is largely equitable. Everyone can get at the same Google or Facebook or Maps or YouTube or Wikipedia or whatever. But not if everything requires a subscription first.

At best, this could result in a lot more creativity in advertising, something that’s desperately needed.

If you must advertise, anywhere, you need to inject some creativity in the ads that make people even remotely want to look at it. Which may be impossible given most people’s aversion to being anything but bland or corporate or boring.

Think more advertising akin to Cards Against Humanity digging a big hole and less of whatever your local hospital is putting out.

Same goes for the junk most people throw at their Facebook walls every day. An appalling amount of attention is paid by marketing people and social media managers about the importance of posting at least 3x a day and other wasteful nonsense. If one more organization asks me what my hashtag goals are, I’m going to poke my eyes with rusty spoons.

Regardless, people are already so allergic to ads and this boring junk even the interesting ones are getting thrown out. Hwang notes studies of Snapchat users that the average view-time of a video ad is 1 second. It’s no better on YouTube, where it’s “whatever the minimum time required is to watch an ad”.

In the meantime, buy a subscription directly to a journalist or publication. And expect the Internet to look a lot different in the next five years.

We’re so full of white there are no jobs

So Apple rounded out the big tech companies last week with a report that basically says all our stereotypes are true: white dudes run the show and Asians are really good at math.

Remember, stereotypes don’t just appear out of nowhere, they are, technically, derived from observed conventions.

This is a complicated problem. For penis-toting white people you’re born, you go to school, get a computer for Christmas, and totally geek out and get a job later on doing geeky things.

For penis-toting black people, you go to school, maybe you sit at a computer a little bit, you probably can’t afford a computer or a very good one, or Internet access, so you go do something else.

For women it’s a whole host of different issues. We know the arguments there, and frankly, I just don’t have enough information to speak about them. I’m inclined to believe that maybe women just aren’t, in mass, as interested in technology. Women also aren’t that interested in hunting, fishing, race car driving, farting, and whittling canoes from dead trees, but no one’s stopping them from doing those things. Men generally don’t like massages, perfume, or anal sex, but no one’s stopping them or trying to push them into that, either. Insert your own gay joke here. Then call yourself a bigot.

But back to the black and white dudes with computers. The difference in these two upbringings is that one kid almost certainly went to a school with things like air conditioners and computers. I kid you not, there are schools within Indianapolis that do not have air conditioning. Computers are also not high on that list. I do not know where the seemingly endless stream of grant dollars for these things are going, but they’re not getting to the kids.

So in 20 years time you do not get to scratch your head in bewilderment why there are no black people in big tech companies.

Our national response to this is to pressure these companies to find black people and hire them. Ditto for women and anyone to “dillute” that pack of white sausages.

I’m all for the diversity of things. You get better products and it’s obvious we have been since women have taken a more active roll in the workplace. We’ve all seen how much better Sterling Cooper is with Peggy. It’s good for everyone. Just as it is for getting different opinions and thoughts from different backgrounds.

Years ago when I was working for the State there was this push for digitizing court forms. Great idea, “Except it won’t work,” I said. “Too many people out in the rest of Indiana do not have access to good enough Internet for this. They don’t have computers or the ability to get to one. There are all of 6 public computers in all of Washington County. Three of them are for Workforce Development only.” You can’t just “eliminate the paper” because until a couple more generations die off and we push for broadband everywhere, we will have this problem. I was the only one to fight this battle because I was the only person who had spent more than 6 minutes outside of Indianapolis.

But we can’t get mad at Apple for this, or Google or Facebook or any other company. It’s not their fault the pool of people to hire from is lousy with white dudes. They didn’t create that world — society did. Or, more aptly, the government. And now the government and society want them to fix it.

Does anyone believe for a second that Apple, with more money than God, would hire for a position and say, “Well, that woman is really awesome, but let’s go with the guy.” I don’t believe that. I don’t believe anyone at any of the big tech companies hire based on anything but what you’ve done and what you can do.

Turns out, though, if you can’t do much, or don’t do much, you don’t get the job. This isn’t a country club where there’s some sign out front saying “No black people” or “No girls allowed”.

But like my last post, this comes down to personal responsibility. You can, in big cities, get on a bus and go to the library and take a book about HTML out and read it. It’ll cost you $1.75. I’ll even give you the money for it if you want. That’s how most everyone working in tech today got started — no degree required.

But we do have a societal responsibility to take in kids, help younger generations learn ever more complicated code and languages and techniques, and to ensure schools get real money to spend on real equipment. We have a responsbility to treat people with respect and dignity, to understand hardship, and to punish people for their racism and bias. Even in 2014 we need laws to protect people in clearly segregated places, but I don’t think Facebook is the bad guy (at least this time, anyway). We do not have a responsibility to hire to fill some peer-pressured feel-good numbers quotient.

 

My Experience Using Chrome

When I first bought a Mac, I installed FireFox because I was used to it from Windows Land. Then, I started to appreciate the aesthetics of the Mac and FireFox didn’t fit into that scheme. So, I installed Camino, which is like FireFox-lite for Macs. It was great. It was fast, secure and easy to use. However, it didn’t support extensions. At the time, I wasn’t too irritated by this as extensions were a pretty new and novel thing and I could live without them.

At some point FireFox started to catch up with Mac aesthetic standards and Camino fell by the wayside. So I went back to FireFox. Enter Safari 5 and I went back to that. It was super fast, easy to use and new extensions made it perfect. I loved it. MobileMe kept Safari on my Mac in sync with my iPhone and later my iPad and other Macs. Add a bookmark on my Mac, boom, it’s there on my iPhone in seconds. The extensions were great, blocking things like ads, Facebook ads, etc. I also loved the “Reader” feature.

Then Google introduced Chrome and only a few people started using it. It was new, shiny and I saw it as “another browser to support”. The extensions for it were useless and only a few hardcore geeks used it for whatever reason. I installed it, thought, “That’s nice,” and never used it again.

At some point, I don’t know when, people started to hop on the Chrome bandwagon. Extensions grew, Chrome got better from Google’s end and FireFox started to feel bloated in comparison. Chrome became the FireFox of our childhood, so to speak.

I still ignored it, thinking it couldn’t be much better than Safari. I don’t visit malicious sites, so the “it’s more secure” bit is valid and I respect it, but I don’t care.

HOWEVER, I’m a tab-hoarder extraordinaire. I never restart my Mac until it comes crashing down around me, about once ever 4-5 weeks. Usually because Photoshop did something stupid. I never quit my browser because I always have tabs open that I want to come back to later. Right now, I have two tabs open to sample code I’ve been playing with and three tabs for sites I’m referencing for various research purposes and four tabs open related to a website I’m working on for a client. This is the norm on my desktop and I suspect on many other’s desktops, too.

Safari crashed yesterday, as it is prone to do after 7-10 days of heavy use for 10 hours a day. I have Flash disabled in Safari and use an extension to load H.264 versions of YouTube videos. But, that still causes Safari to misbehave. Safari also leaks memory like the dickens. I have 8GB of RAM in this machine and Safari usually holds up to 2GB worth and never lets go until I quit it. That’s a pain and makes me lose work.

So, with one crash yesterday I lost 19 tabs of things from the past day or so I was working with. Pulling them out of my history would be hard as I don’t recall what the URLs were and in some cases what the sites were even about. I just saw them and thought, “Neat. I’ll come back to this in a bit.”

That prompted me to bump Chrome to the top-spot in my dock. I’ve been using it for a few days now and it still feels snappy, stable and is using 122MB of RAM. Safari, however, uses about 80MB just as you open it. The best part is that I have yet to break this thing even with Flash enabled. Extensions have been able to fill in the gaps where I find them – like Reader and Facebook Ad blocking. I don’t like that I can’t customize my toolbar, which seems really unlike Google, but maybe it’ll get updated soon. I’m tired of looking at the “AdBlock” button all the time.

They’re some nice UI choices in Chrome, like how the tabs show key words in the page titles, not just the first few words. And the tabs are easy to drag around. However, with a full bar, it’s very difficult for me to move the whole window. I have to grab that sweet few pixels around the Close/Minimize/Resize buttons.

I’m sure at some point I’ll miss the ability for it to sync with my iPad and my iPhone, but I’ll learn to live without it. They’re other matters about Chrome I don’t like. For instance, when I “Copy Link Address” from a Google result, instead of copying “www.justinharter.com“, it copies this:

http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBgQFjAA&url=http%3A%2F%2Fjustinharter.com%2
F&ei=NkqTTb6GJYPI0QGK6OXMBw&usg=AFQjCNG55ScwONQY0KvUFBCM98ERsDdWeg

Not cool.

Chrome also has the same problem as Safari where it tries to direct me to items in my history when I want to visit a new site. For instance, yesterday I did a search for “Chrome Reader Extension”. Today, if I do a search for “Chrome” it automatically fills in “…Reader Extension” and takes me to that instead. Not what I wanted at all. I have to remember to type “Chrome” + ‘Delete’ key to really tell it, “No, search for Chrome. Seriously. I mean it.”

Admittedly, Safari has the same issue, but it’s better than when it first came out. Used to be that typing an address in Safari would make it search for every random word on every page you’ve ever visited. That got real old, real fast. An update arrived and it made it smarter, but still not perfect. I do think it’s better than Chrome’s, though. This is by virtue of having the address and search bars separate. It keeps their respective caches cleaner.

I’m enjoying Chrome well enough for now. If it can survive longer than Safari under my workload, it’ll be a keeper.

Google Rolls Out Updated Algorithm

Google:

Many of the changes we make are so subtle that very few people notice them. But in the last day or so we launched a pretty big algorithmic improvement to our ranking—a change that noticeably impacts 11.8% of our queries—and we wanted to let people know what’s going on. This update is designed to reduce rankings for low-quality sites—sites which are low-value add for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high-quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on.

Translation: “We see you people trying to game our system by doing a bunch of bogus link crap. Stop it.”

Google Takes my Advice!

From Google:

We’ve been exploring different algorithms to detect content farms, which are sites with shallow or low-quality content. One of the signals we’re exploring is explicit feedback from users. To that end, today we’re launching an early, experimental Chrome extension so people can block sites from their web search results. If installed, the extension also sends blocked site information to Google, and we will study the resulting feedback and explore using it as a potential ranking signal for our search results.

I’m going to take credit for that:

Maybe Google needs to be a little less automated and a little more human?

My suggestion would be for Google to get more customizable. I know I can do filters and searches within the search box, but that’s a pain every time I want to do a search. Why can’t I just tell Google, “Never show me results from about.com, ehow.com, etc.”? A simple blacklist feature in my account settings can go a long way.