From the biggest technology giants to the smallest startups, advertising remains the critical economic engine underwriting many of the core services that we depend on every day. In 2017, advertising constituted 87 percent of Google’s total revenue and 98 percent of Facebook’s total revenue.

Telling this history and exploring these nuances are more than just academic exercises. Because advertising is responsible for such a colossal portion of the money that drives the internet, it is impossible to think about the future of the web without thinking about the future of advertising. Shifts in how attention is bought and sold will have major consequences not only for our everyday experience of the web but also for how the internet affects broad questions of expression, identity, and democracy.

On this count, the parallels between the financial markets and the attention markets reveal crucial hints about what the internet might be evolving toward. Indeed, the rush to architect the buying and selling of attention in the model of the financial markets raises the question of whether some of the problems of the financial markets will follow the attention economies of the web.

The infrastructure of programmatic advertising is architected so that, theoretically, publishers are able to sell their inventory of attention to the highest bidder among a pool of buyers. This is generally done through an arrangement known as real-time bidding (RTB). RTB is initiated by the tiniest of actions—clicking on a link or loading a piece of content—which sets off a rapid, orderly cascade of events, Rube Goldberg–style. As soon as an opportunity for delivering an advertisement appears, an ad server leaps into action, announcing to the marketplace the opportunity to bid for inventory. One of the most incredible aspects of the RTB system is that the entire process takes place in real time. The advertisements you see online are not predetermined. At the moment you click the link and load up the page, a signal from the ad server triggers an instantaneous auction to determine which ad will be delivered. The highest bidder gets to load its ad on the website and into your eyeballs.

Like the financial markets prior to the crisis of 2008, the modern infrastructure of the ad economy might have produced explosive growth while simultaneously introducing a set of vulnerabilities that could make this money machine less stable over time.

Thinking of the internet’s transition as a simple shift from noncommercial to commercial misses an important nuance. We should distinguish mere commercialization from the specific kind of commercialization wrought by the ad technology entrepreneurs of the 1990s and 2000s. Earlier generations of advertisers bought and sold attention, but never at the speed, scale, and level of granularity characteristic of today’s programmatic advertising marketplaces. What is different about the present-day online advertising system is the extent to which it has enabled the bundling of a multitude of tiny moments of attention into discrete, liquid assets that can then be bought and sold frictionlessly in a global marketplace.

For instance, we might say an ad has been “delivered” when it is successfully loaded up on a website. That definition has the advantage of being extremely easy to measure: an ad server can log that it sent an ad, and the website can confirm that the ad has been displayed. But assuming this definition as the bar for success might massively overreport the amount of attention that an ad is capturing. What if the ad is loaded, but is buried in a place on the website where no one ever sees it? Tons of ads could be “successfully delivered” under this metric without reaching anyone. We might try to raise the bar by only counting an ad as “successfully delivered” when a user pauses on the ad and actually looks at it for a period of time. But how long do users need to pause on the ad? How can we verify that they are looking at it? Setting the threshold for success too high creates new problems—by defining the attention asset so narrowly, we risk overly constraining the market. Publishers might end up with real attention they are unable to sell because the standards for measuring and verifying it are too stringent.

The fact that brand safety remains an ongoing challenge even among platforms run by the most well-resourced companies in the world suggests how structural this opacity problem is. To date, the primary approach has been to use human review in an effort to weed out these errors. The scale of the modern online advertising ecosystem makes this at best a partial solution. Mark Zuckerberg, commenting on Facebook’s decision to hire more content moderators in 2017, declared, “No matter how many people we have on the team, we’ll never be able to look at everything.” There is hope that recent advances in artificial intelligence might be able to ensure greater brand safety, but it is unclear whether these systems will ever have the context sufficient to address these issues in a comprehensive way. AI systems are able to recognize specific, concrete targets within images but remain extremely limited in understanding broader context.

The company’s “pivot to video” encouraged publishers to invest heavily in the creation of more video content, often at the expense of existing staff. The effort also fed substantial industry hype about the value of video advertising on Facebook. But it turned out that Facebook overstated the level of attention being directed to its platform on the order of 60 to 80 percent. By undercounting the viewers of videos on Facebook, the platform overstated the average time users spent watching videos. Facebook later admitted that several other key video advertising metrics were overstated. Creative accounting has dogged other marketing metrics that Facebook has promoted. One analyst noted that Facebook claimed to be able to reach 25 million more eighteen- to thirty-four-year-olds in the United States than should exist according to the U.S. census.

Public indifference toward online ads is reflected in the surprisingly ambiguous empirical evidence that these ads do anything at all. One large-scale experimental study of online search ads in 2014 concluded that “brand-keyword ads have no measurable short-term benefits.” Ironically, ads generated engagement mostly among “loyal customers or [consumers] 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.”

In 2013, a controlled experiment on more than a million customers to evaluate the causal effect of online ads concluded that a customer “between ages 20 and 40 experienced little or no effect from the advertising.” This was in spite of this demographic’s proportionally heavier usage of the internet. In contrast, the study found that customers older than sixty-five, despite constituting only 5 percent of the experimental group, were responsible for 40 percent of the total effect observed as a result of the advertising. This result suggests that the current effectiveness of advertising may depend on an aging and rapidly disappearing segment of the population.

The vaporous nature of brand advertising means that the goalposts are perpetually moving: the objective of the advertiser may not be to drive any behavioral change that is actually measurable in any sensible time frame. It becomes hard to refute the effectiveness of advertising when the bar is set so low.

The need to create a liquid market in human attention influences the architecture of the social spaces of the web. Commodification requires attention to be legible: in other words, the internet must structure “engagement” in a way that is easy and accurate to measure. Social interaction between people is mediated by structured tags such as “like” and “favorite” because these render sentiment easy to measure. Even features that we take for granted, such as requiring user registration to create a profile, are building blocks designed to support the delivery of advertising online. We’ve lived for so long in an online social universe purpose-built for advertising that it is difficult to imagine what an alternative might look like.

So how would the disclosure philosophy of the 1933 act apply to the world of programmatic advertising? The basics would be the same: prior to offering ad inventory for sale in the programmatic marketplace, sellers of attention would be legally required to provide to the public a standardized statement of relevant information. This statement of information would shine a spotlight on precisely the areas we have covered in the course of this book. It might include detailed metrics around brand safety, performance, proof of business relationships, disclosures of conflicts, and so on. The disclosure mandate will need teeth: these representations can and should put the company selling ad inventory on the hook if they turn out to be inaccurate later. Legal liability is perhaps the heaviest (and slowest) deterrent, but a range of potential punishments are available to those who falsify or otherwise spread misleading information in these disclosures. One might be excluded from selling advertising inventory across certain marketplaces or be clearly marked as a seller with a bad record. These disincentives would deter attempts to obfuscate the value of advertising being bought and sold.