Came across this article from last year, The new dot com bubble is here: it’s called online advertising. It takes a look at online advertising’s effectiveness. It seems the selection effect is strong, but not accounted for, because the metrics happen after that.
“It is crucial for advertisers to distinguish such a selection effect (people see your ad, but were already going to click, buy, register, or download) from the advertising effect (people see your ad, and that’s why they start clicking, buying, registering, downloading).”
All the data gathering, all the highly individual targeting, apparently means advertisers are reaching people they would already reach. Now people just click on a link the advertising company is paying extra for.
For eBay there was an opportunity in 2012 to experiment with what would happen if they stopped online advertising. Three months later, the results were clear: all the traffic that had previously come from paid links was now coming in through ordinary links. Tadelis had been right all along. Annually, eBay was burning a good $20m on ads targeting the keyword ‘eBay’. (Blake et al 2015, Econometrica Vol. 83, 1, pp 155-174. DOI 10.3982/ECTA12423, PDF on Sci-Hub)
It’s about a market of a quarter of a trillion dollars governed by irrationality. It’s about knowables, about how even the biggest data sets don’t always provide insight.
So, the next time when some site wants to emotionally blackmail you to please disable your adtech blockers, because they’ve led themselves to believe that undermining your privacy is the only way they can continue to exist, don’t feel guilty. Adtech has to go, you’re offering up your privacy for magical thinking. Shields up!