The Ezra Klein Show: The ‘Subprime Attention Crisis’ at the Heart of the Internet

New York Times Opinion New York Times Opinion 2/14/23 - Episode Page - 1h 8m - PDF Transcript

I'm Ezra Klein. This is The Ezra Klein Show.

A core focus of the show this year is going to be attention,

but not your attention, not my attention.

Not attention as a capacity of the individual,

where we give you hacks to grayscale your iPhone

or meditate in the morning or eat better food.

Our attention.

Attention seen as a collective resource, as a public good.

Attention is, in total, the depth of thought and consideration

a society can bring to bear on itself.

Its problems, its opportunities,

everything from how to find economic prosperity,

to solving climate change, to strengthening our democracy,

or for that matter, doing the reverse of any of those things,

all of it depends on our capacity to pay attention,

on the quality of the attention we pay,

and on the condition we're in when we pay attention.

But like any collective resource, attention,

it can be polluted, it can be exhausted.

And I think to a large extent it has been.

And to see how and why,

we have to get really deep into the business of attention.

So today's episode is part of that inquiry.

Kim Huang was director of Harvard, MIT,

Ethics and Governance of AI Initiative.

He was a global public policy lead for AI Google.

He's currently the general counsel at Substack.

And for our purposes, most importantly,

he's the author of this weird, fascinating book

called Subprime Attention Crisis,

which is a really good explanation

of the business model responsible

for our collective attention today.

I always worry when approaching this topic

that it is a problem of something we all think we know about.

We see the banner ads,

we know we're tracked across the internet.

We're familiar with this.

But we're really not.

The scale of it, the technology that really underpins

the pervasiveness and centrality of this business model

to almost all of the information and entertainment

we now consume,

the way it is something completely different

than it used to be.

When you get into the technical underpinnings

of our whole attention economy,

it's almost wondrous.

It will really make you, makes me step back and marvel.

But our attention here isn't just being bought and sold.

It's being used and changed.

And really tracking the plumbing of this economy

is where we have to start to see how.

And so I asked Huang on the show to talk me through it more.

As always, my email is reclinedshowatnytimes.com.

Tim Huang, welcome to the show.

Ezra, thanks for having me on.

So the argument at the heart of the book

is that the internet as we know it

flows out of its business model.

So what is that business model?

Yeah, absolutely.

So the book Subprime Attention Crisis

is really about advertising on the internet,

which over the last few decades has become

the sort of primary funding model for everybody,

everything from the biggest platform companies

to kind of like the smallest sort of publishers

and websites on the internet.

And it's specifically about a very particular kind of advertising

which is known as programmatic advertising,

which is sort of the use of algorithms

to buy and sell attention online.

And something that you talked through in the book

that I've heard you talk about,

and that I think people know,

but when you hear this really remarkable,

is just how central this is.

Go through a bit of how much advertising supports

the things that we use on the internet every day.

Yeah, so the fascinating thing about advertising

is that it is really kind of embedded

in kind of our experience online.

The very fact that you get to use a lot of services

for free on the internet is really powered by the fact

that they are funded through advertising.

So you log onto Google, you use the Google search engine.

The reason it's free, of course, is advertising.

And it's not just that it's kind of free online,

but that these companies are like extremely dependent

on this ecosystem of advertising as well.

So we're talking sort of hundreds of billions of dollars

worldwide flow in and out of the online

programmatic advertising marketplace.

And for both Google and Facebook,

to take two examples, we're talking about companies

that have over 80% of their revenue

coming from these advertising sources.

And so what's interesting about it is that it is not

kind of only something that sort of like influences

our present day experience of the web,

but kind of continues to sort of shape

like why things are designed on the internet the way they are.

So one of the examples that I always give

is thinking about the like button on social media.

Like why do you even have a like button at all?

Well, one of the reasons is that it makes

engagement quote unquote with content a lot more measurable

and therefore a lot better for buying and selling

and serving ads.

And so, you know, almost kind of like from the smallest

sort of aspect of the web to like the biggest economics

of the web.

It's sort of all shaped by this kind of core ecosystem.

This gets to an interesting question.

I had reading the book though, which is which comes first,

the design of the internet or what advertising needs

for the internet.

So I think classically the way we understand these

platforms is that we have this sort of weird model

that emerged online where you get attention

by any means you can and you can run at a loss

as long as you're getting attention for a very long time

because venture capital firms and other kinds

of financial investors will support you

so long as they can tell, they can see measurably

that you're commanding people's attention.

And then eventually you have to figure out

how to make what you're doing legible for advertisers, right?

You figure out search auctions at Google

and you figure out different kinds of personalization

at Facebook and whatever it might be.

But it's not so much that we built the internet

for advertising as it would be very clever

about figuring out how to make advertising fit

onto the internet we've built.

But you see it more the first way that we build the internet

to make it legible to the advertisers.

So kind of make that case for me.

Sure, definitely.

And yeah, I think that these are a bunch of debates

and it's of course really hard to replay the tape of history

to say like, oh, if we just ran the internet again,

do we end up with an internet that is largely based

on advertising and I think there's some people

who'd make the argument that that's the case, right?

That we're just like, history is unfolding

and we're discovering that it's powered

through advertising essentially.

I'm a little bit skeptical of that position

because I think that there's kind of a deep path dependence

in the sort of funding of online platform companies, right?

That I think that the fact that you had Google, right,

which was this company that was this,

frankly this kind of like lab experiment, right?

That came out of Stanford and was this huge, huge loss leader

for such a long time.

VCs kept pouring more money into it

and there's just lots and lots of users coming in

but no real way of making money.

And then at some point they figure out the ad marketplace

and obviously Google becomes one of the most valuable

companies in the world.

It's almost, I think, that dream that almost kind of gives

sort of momentum to this business model, right,

in two respects.

I think one of them is that investors are willing

to give these companies the benefit of the doubt, right?

Like if you're able to aggregate a lot of attention online,

we just have this almost religious faith that like there's

just some way that you got to be able to turn this into money,

right?

You will become a Google, you will become a Facebook.

And what that allows is I think is like these companies

to kind of like continue going on for much longer

than they would otherwise, right?

So I think one of them is like that the anchor of Google

and Facebook have given sort of room for a lot more advertising

sort of companies to emerge.

I think the second one too is that there's kind of like the flip

side of that, right?

Which is basically that if you come to a VC and you say,

I want to do a subscription business model,

well, they'll say, well, I don't know.

We don't have a whole lot of examples of that like really

blowing up.

So, you know, why don't you just do advertising?

And I think that also has another effect, right?

Which is that you basically don't have sort of funding going

to sort of true experimentation with lots and lots and lots

of different alternatives that might kind of build the internet

in a really different way.

I think the only final thing I'll note here is that what I use

always as kind of a marker for how kind of unplanned it was

that advertising ended up becoming the business model of the web

was actually to look at Google.

And what's fascinating there is that they were basically like,

okay, we'll have advertising, but it'll constitute 10%,

maybe 15% of our revenue.

Most of it's going to come from licensing our search algorithm,

right?

Which is like, obviously not the case.

But I think it's clear to me, at least from the historical record

that like there are lots of different models,

business models at play.

I think the debate ends up being just like,

do you think the incentives inevitably push us towards that?

But I feel it's kind of a failure of imagination

in some respects.

The collapse into advertising as so often the chosen business model

is it's really widespread.

So I think about basically what are the different industries

that make up our informational comments, right?

Give us the information we use to talk to and to

debate with each other and know about the world.

And I've worked in a bunch of them.

Newspapers, which are heavily advertising supported,

not only but heavily, magazines heavily advertising supported.

If you think about television news, including cable news,

that is heavily advertising supported.

Radio is heavily advertising supported.

Then you go online and you have search advertising supported.

You have social media advertising supported.

Really the only major one that always comes to mind

that is not built on advertising is books.

But almost everything else we use to talk to each other

about the world in which we live

is built on people trying to sell you sugar water.

That's right. I'm arguing a little bit against myself,

but then I'll give the counterpoint.

I think one of my favorite historical examples of this

is the creation of the visual telegraph, right?

Which is basically this like communication network

that was built in France.

And the way it worked was basically like a bunch of these

effectively kind of like windmills with shutters on top

and you'd use them to basically like flag another tower

that was a number of miles away to communicate

across long distances.

And they set up this network in France

and pretty soon afterwards people were like,

you know what this would actually be great for?

It'd be great for advertising basically.

And so it is interesting and I agree with you, right?

Like I do think that there is kind of like a,

the availability of advertising is always there, right?

Because it's always attractive to offer a product for free

and then have it subsidized by a third party, right?

Like I guess I'm not trying to argue that like

that option isn't always there.

But one thing I would point out though,

and this is kind of my counterpoint is

maybe to think a little bit about what makes businesses

viable or not viable.

For me, I think it's wrong to be like,

well, the market will always kind of collapse in

on a particular business model.

Because really what we're talking about is people

and what are people willing to pay for

or not willing to pay for, right?

And I do think that with books,

what we have is a great example.

Like the example that you brought up is that

it's an example in which I think a market

has been sort of trained and that it is actually like,

there's a norm to say, yes,

a book is a thing that I will buy, right?

And even if it's basically just a text file,

I'd be willing to pay X amount of money for it.

And I think that just ends up being a question

of like what people want and what the market

will sustain and our norms around what's worthwhile

or valuable online or not.

And so I think if you buy that thesis,

I do think that there's this kind of interesting

maybe self-reinforcing cycle, right?

Which is that we've lived with all of these

kind of like advertising models that make

content available for free.

It makes it really difficult for you to convince

someone to pay for content because the psychological

cost of content is just zero, right?

And so you almost have to shift cultural norms

to get these business models to work.

I just happened to believe that if there was,

say VC funding, their venture funding to really

push that ahead, we might very well be able

to shift those norms, but I think it's a reasonable

minds can differ on how stuck we are

with that particular way of thinking.

Well, let's put a pin in the question

of VC funding because I do think there's

at least some evidence that this is changing.

But now let me join you in arguing

against myself as beginning to this question.

Sure.

Which is I just gave this quick argument for

continuity, but something you

argue in the book and that I believe

is true, is it digital

advertising is a discontinuous with the

advertising before that the fact

they have the same name actually

obscures how different what is happening

when a magazine

supports itself in print on ads

and that same magazine

moves online and supports itself on digital ads.

So talk about the change

about online advertising as a different kind of

phenomena.

I guess I can give you the

dream and the nightmare maybe is the best way

of thinking about this.

It's true. It looks quite different

from what you'd usually imagine advertising

to be. So you think about advertising,

you think about madmen.

We have people smoking

in an office and they're coming up with

creative to try to sell Pepsi.

And that was the way advertising

worked for the history of print magazines

and print newspapers and kind of older

forms of media.

What we see with programmatic advertising is something

which is a lot more automated,

a lot more data driven, a lot more

scaled than that.

And the way to think about it is Google, Facebook,

these were pioneers in the space and what they needed to do

is not to sell enough advertising

to fill a magazine, they need to sell enough

advertising to sell ads against every

possible search query that someone might have

online. And so they invented the system

programmatic advertising which

in my book and the book kind of verse to it

looks a lot more like the capital markets

that have high frequency trading.

And to give just a quick sketch of it,

the way it looks is when you go online,

you go to a website that's going to serve you an ad.

Essentially what happens is that there's a signal

that basically is put out to a marketplace

saying, hey, we've got Tim, mail 25

to 35 in the East Coast

who's looking at this website, who wants

to advertise to him. And essentially there's

a number of algorithms that operate on behalf

of advertisers

that compete, you know, to basically bid

to deliver the ad to me and depending

on which sort of bidder wins,

they upload that to my website and sort

of into my eyeballs, right? And this happens

billions and billions of times every single day.

And so the dream of this

model was that you could do advertising

at much larger scale, but it also

was a dream that this kind of online

advertising could transcend kind of the

limitations of older advertising, right?

So, you know, it's very data driven,

right? You know exactly who's looking, who can

click on it, you know, it's scalable, you

can get a message out to lots and lots and lots of different people.

So there's sort of a dream that you'd finally

kind of be able to create like sort of advertising

as a science, right? Like that we could measure,

quantify and deliver ads in a way that would

truly kind of finally get rid of the sort of

like kind of touchy-feely

aspects of the industry. And that's the dream

and you know, I ultimately argue that that dream

didn't end up being true, but it was something

that kind of motivated this industry. And I think

frankly, it's been responsible for a lot of ad dollars

moving out of old media to the

web, right? Because of this promise of

measurability and scalability and sort of data.

And one of the

points we're making is that it isn't what is

different about online advertising is not

just the way in which it is

technologically differently

structured than say a newspaper ad,

but that the framing

is financialized in a way that

advertising wasn't before that. So can you talk

a bit about that, the financialization

and what is being financialized? What is

being commodified and chopped up into

into little pieces to be sold on marketplaces

exactly?

Yeah, absolutely. So

I think the good frame to sort of think

about this is in the context of what it means

to set up an advertising

marketplace of this scale, right? So

you know, you imagine like you're running

like your local paper, right? In the 1950s.

You really know

the audience that's going to be likely reading your paper

and the advertiser is

kind of putting ads to like reach that handful

of people. And you know, in some ways

like attention is very heterogeneous,

right? Because like the media markets

are really small. And like in some ways

like the kind of publisher like knows

the reader maybe on like even a person

to person level. Like I know Jim, he comes into the office

and he complains about this all the time.

And you know, programmatic advertising and

contrast is like very, very big, very,

very hands arms length

very, very anonymous.

And you know, effectively what has been

done, what I think of as a form of

financialization is to kind of like commodify

and spread out and like kind

of render all sorts of attention

very much the same, right? So you kind of go

and you say, well, I have a couple of demographics

I'm trying to reach, but like I don't really care

where they come from or where they are

just serve these ads out to the internet.

And so there's an attempt to kind of like

turn it into

a tradeable commodity, right? That like, oh

well this blog versus that blog,

you know, they may differ on a couple characteristics,

right? But so long as I can reach

a person of a certain characteristic, I don't

really care what channel that

advertising is flowing through or how it gets

done. And this actually accounts for

what has led to actually some interesting

litigation against Google, you know, these

systems that sort of act on behalf

algorithmically of the ad buyer.

And so I think that's kind of a little bit of

what I think about as sort of like financialization

is that there's been an effort to kind of like turn this

into something that's a lot more tradeable and

that you can really, really kind of do at scale.

It's like the formation of a market at scale

is kind of how I think about the financialization

of this ecosystem.

So attention for me is really the keyword.

It's like why we're having this whole conversation.

I think of attention as

the most important, often

like worst theorized least

explored thing in life.

It's everything and then it's very hard

to get your hands around what exactly it is.

But you have a lovely line, rewrite.

The amorphous shapeless concept of attention

has been transformed into discreet comparable

pieces that can be captured, priced and

sold. Buyers and sellers

can quickly evaluate opportunities

and transact in attention at massive

scale without individually evaluating

each opportunity.

So there's this point here that our attention,

like much in the way that other kinds of bonds

and assets are, is somehow being

regularized, packaged together

and sold. How?

When you say that buyers and sellers

can transact in attention,

where do they do that? What do these

marketplaces look like?

So there's two elements to this.

So I think one of them is what are you buying

and selling exactly? And it's actually

fascinating because there's a bunch of

standards that have been written in the ad

tech industry to say, okay, so

what is a page view?

What is time on site anyways?

What is attention? I think the question

that we're really ultimately trying to answer,

it's written in kind of quite terse

speech frequently, but I think

it's in some ways kind of like an absurd exercise.

How do we turn this thing attention, which is

just me looking at something

into something that can be bought or sold?

And typically what that ends up looking like

is measuring it based on

your activity or your

kind of engagement that you have with, say,

a website or an app. One

common definition is, okay, you

have held the ad in the window of

your browser for at least a second

before moving on.

And that's how we define the proxy for attention.

That's really what a buyer is buying

when they buy your attention.

And then the second question, a bit of your question was,

okay, so then how is this kind of bought and sold?

And this goes to a little bit of the kind of process

I was describing a little bit earlier,

which is that you have a marketplace which

consists of these kind of two types of infrastructure.

There's essentially a set of kind of

bits of software that act on behalf of

the sort of publisher. So this would be

your New York Times or your Facebook or your

Google or, you know, kind of places that are

aggregating attention. And then you have

a set of pieces of software that basically

represent the ad buyers here, right?

So your Coke and Pepsi and your agencies.

And these kind

of two bits of software plug into

an ad exchange where essentially

these kind of bids and offers are made, right?

So in the description I gave a little bit earlier,

it would be, hey, we've got mail

25 to 35 clicking on this

website. Who wants to buy

the ability to deliver an ad to him?

And the exchange basically facilitates

the auction by which sort of these bits of

software acting on behalf of agencies

and Pepsi and Coke go

and compete to basically deliver those ads.

And so this is by and large kind

of an instantaneous process. It happens between

the time at which you click to go somewhere

and the time at which the page actually loads

on the other side. And that's kind of

what it looks like, right? And so this is all done

really in an automated way. We're talking about

global servers talking to one another

rather than anyone having to pick up the phone or call anyone

to kind of facilitate the delivery of ads.

I mean, that's truly amazing.

Put aside however you might feel about advertising

or attention or anything else. Sure, yeah, of course, yeah, yeah.

That this is all happening. There's an

auction for your attention which serves

you up something in a personalized way

and the time it takes you to load a website

on a broadband connection

is nuts.

It's wild.

Yeah, I agree. I mean, I think it is

maybe at the risk of overstating it.

I think one of the premier engineering

achievements of the 20th century,

like, you know, in some ways the reason why

Google succeeded, right? There were other people

playing around with these types of marketplaces when

they were coming up. They succeeded because

they were able to do very high performance

infrastructure running

at really, really high speeds.

That was the secret to their success and getting

that to work is, yeah, an enormous

challenge. I think it's like just wild that it works

like that. Wait, can I hold you on that for a minute?

Because this is, I think, a pretty unknown story

for most people about Google. I think you say

what did Google do? People say, oh my

god, they figured out search.

And that's half of the story of what Google

did. That's right.

But they also figured out the business model

of online advertising to a very large degree.

So what did Google do to make their

business work? What is the great Google

business innovation? That's right.

So the complexity,

you know, put yourself in the shoes of these

kind of like two youngsters from Stanford

with this company with Search Engine.

You have lots and lots of people using this

thing called Search to find things on this

wild new thing called the Internet, right?

And this is all well and good. You're very

excited that you have a bunch of users, but you're

just burning cash on a month-to-month basis,

just paying for the service to keep this thing

running. And the engineering challenge of

delivering advertising here is to basically

say, okay, someone could come to our

website and search for literally

anything. How do we make sure

that we can deliver an ad that's

relevant to that search query

at the time at which they kind of like

do that search query? And so

like the engineering that needs to take place

in order for this to happen is that you basically

set up a marketplace on a keyword

by keyword basis, a kind of product called

AdWords. And this was kind of the

system that they set up was essentially

an auction infrastructure.

So what they would say is, okay,

well, if you're a plumber, you can

advertise against the plumber keyword.

And other plumbers who also

want to advertise against that keyword can bid

against you. And an auction will be sort of run

to deliver that ad. And part of their

innovation there was not just kind of like

setting up that marketplace, but

famously one of their kind of

key things that they sort of figured out was

that they also wanted to kind of rate

the person who won the ad based

on the quality of the ad. And that was built

on a number of different features about the kind

of ad you'd submit to the system.

And so kind of what they were trying to do in this

early phase was kind of balance the

scalability of advertising, but also to

ensure that advertising didn't become

sort of terrible, that it wasn't low quality

ads that you didn't want to see. And

like I think in nailing that and getting a marketplace

to really get up and running, that

in some ways is kind of their true sort of business

innovation and the thing that created sort of this

waterfall of money that's kind of supported the company

to this day.

So now I want to go back to this question of what kind

of internet the ad business has created

because whether or not everything begins with

ads, it does at least

in the case of almost every major

online platform with the exception of Wikipedia

and then a couple of the

subscription based streamers like Netflix.

It all becomes ads.

So once you have

an ad business, once you're there

what are you incentivized

to do?

And then kind of a very long

legacy. I think it's a metanarrative

of the last few decades of the web.

Famously, Larry and Sergey

have this paper where they first describe

kind of the architecture of their search

algorithm, so page rank.

And one of my favorite bits is they

have an appendix where they go out of their way

to say let's consider whether or not a search

engine should ever adopt advertising.

And they conclude

much to I think the chagrin of

their future lawyers that would be representing

for various antitrust proceedings and otherwise

that essentially that no

search engine in their right mind

should adopt advertising because

once you have a third party that is

kind of paying to access eyeballs in your

search engine, you have lots and lots of

incentives to kind of shape your experience to

cater to the people who are really paying

your bills. You know, I think this is part

of the sort of concern about online advertising

is to say, okay, well, in that

case, you really want to be able to

provide a lot of data about your users

to these advertisers. That's one thing that you might want

to do. The other thing is that you might want

to make sure that the ads are kind of

indistinguishable from sort of legitimate

search results that the search engine is showing

up, right? And so one thing that people have pointed

out is like it's harder and harder to kind of tell

what's an ad and what's not an ad. And those

types of incentives have always been sort of

at the heart of the web, right? That like,

no, no, we can really balance these incentives.

And I think some people and I would count

myself in this category would say, well, no,

even the kind of strongest company becomes

sort of victim to these incentives over time

and that they have sort of these profit

incentives to structure the web in a way that are

ultimately kind of adverse to their users.

I think there's a

view out there that I've

conflicted feelings about,

which is that the

obsession with engagement

is a byproduct of the

advertising-based business model. That if you're

not based on advertising, if you're subscription

or something else, you don't really

care how long people are on your

site just that they're paying for it.

On the other hand, you'll hear

the head of Netflix say, are big competitors

sleep and Netflix has

autoplay and they're obsessed with how long

you use Netflix for a month.

So do you buy the narrative that

the attention-hungry

outrage-oriented

or often outrage-oriented engagement-based

nature of most

major online platforms now

is a factor

of the ad buying process?

I'd say no.

And I think this is one of the reasons why

the book kind of pissed off like

ad optimists as well as sort of ad critics.

I don't really believe that

view and I think the view as at least as I'd frame

it is basically that like

the internet is kind of like to blame

for a lot of the content ills that we see on

the internet. But I don't think it's

so certain, right? Because I think the incentives

for a creator, right, like

I'm going to use that very broadly, everything from your user to

your sort of professional YouTube influencer,

I think is interested in generating

an audience online, whether or not the person

pays for you by subscription or

you release that content for free or

if you get ad dollars, right? I think that

in all those cases

there's a desire to grab attention

and I think that introduces

bad incentives no matter what the business model is.

Now I do think that

there's kind of two subtleties that I point out there.

I think one of them is that I think there is content

that might not otherwise exist

unless there was sort of the additional

kind of impetus of advertising, right?

And I'm thinking here of kind of like

the sort of really interesting ecosystem around

fake news websites, right? It's like,

well, maybe we can really

kind of like gin up very profitable websites

very quickly by generating a certain type of content

and it's kind of like, well, would they be

willing to go to those extremes in natural

terms if their only incentive was to aggregate

an audience? That's one view and I think

there's kind of some cross bleed there.

I think there's a lot of gray area.

I think the second thing which I would maybe

kind of pivot to is

to kind of think a little bit more about

like the influence of things like content

recommendation, right? On shaping

the types of content that people produce.

I think in the default, in all cases, people want

audience, but I think when there's

the additional intent of to say, oh, well

if you publish this type of content, you'll get distributed

to everybody on our platform.

I think in some ways that's almost even a stronger

motivator than sort of simply kind of like

ads, right? Being the driver.

And so I think obviously it's a complicated

question, but I think it's very wrong to believe

that at the core of this

ads are to blame for

the outrage culture, if you will,

of online discourse.

I want to pick up on one of those subtleties.

Something that ads permit

is financing

mechanisms that are built very much on scale.

So you can have

the example of the fake news websites is really good.

If a lot of people are coming to your website

but people don't really know it or like it,

it just, for whatever reason, is getting

a lot of drive-by traffic.

You can make some money off of that under ads.

Subscription, you actually need to connect people

to the site. Now you can do that in good or bad

ways. A lot of things that do very well in subscription

are very bad things because people are

subscribing because they believe

or want to support something very bad.

So I'm not a idealist

about subscription either.

But if you take, say, what's happened on

Substack and what they've proven out,

one thing that subscription really allows

is you can have 5,000, 10,000, 15,000

people. And if they're only

to pay 20, 30,

50, 80 bucks a year for what you're doing,

that's actually quite a bit of money. Whereas

10,000 or 20,000

people for ads is like

nothing at all unless you have

intense industry-specific advertising

for a decision-maker class.

And so there is something

about what is permitted in the two. I do think

that the internet moved way more towards

scale-based business models because

of advertising

when a lot of what is best is often

a little bit more niche, but that tends to thrive

better in a subscription model.

I never really thought about it like that,

but I think it's a great way of taking it,

which is I think we can think a little bit about the fact

that the ad market was designed to be

as frictionless as possible, right?

Like that the old generation of advertising was bad

because, yeah, you had to call the madmen

and get your ad produced and it took a really

long time to sign an engagement letter

with them and it just complicated.

And the effort to commodify,

to financialize attention

has been to make it as frictionless as possible, right?

Like you have a website on the internet,

you can just plug into this ecosystem and start making money.

You have ad dollars you want to spend,

you just put your coin in the slot and you go.

And, yeah, I think that's right.

I think we've landed on sort of like metrics

and an infrastructure,

which I think might reward

kind of like content on a

page-by-page basis maybe is kind of a way

to think about it, right? Like that there's actually

something about the business model that suggests

like the ordering

or the structuring of content

and information online.

Now, like you say, I

hesitate to be like, oh, and that means that the content

is more shallow on the internet or

oh, isn't it the case that like it's just intellectually

less interesting? I think that brings a lot

of baggage to it, but I think that

if you're just purely talking about like how

we experience content online,

do we think that

the experience of it as just like a single page

that you hit and then you go away?

I think the idea of that, I think, is a lot more

possible because of the ad ecosystem.

And so, yeah, it is sort of interesting to think about

like almost like away from kind of a values

laid in judgment way of thinking about it, almost like

what's the collection of texts

that you encounter online and how is it connected

to one another is very much kind of like shaped

by ads. I think it's, yeah,

a super interesting way of thinking about it.

My name is Abdi Latif-Dahir. I'm the

East Africa Correspondent at the New York Times.

Imagine

a 100-year-old

fig tree in downtown Nairobi, Kenya

standing in the path

of a major expressway that is

about to be built, funded by China.

Fig trees are

very important for many

Kenyans and the young people are trying to defend

the environment. There's

an outcry. People rally to divert

the highway rather than chop down the tree.

There's a confluence

of so many things here.

New York Times subscribers

keep our journalists reporting from

across the map to help you

understand the issues shaping our world.

If you would like to subscribe,

you can do that at nytimes.com

Tell me about the central metaphor of the book.

The subprime attention crisis.

What is that?

I mentioned a little bit earlier

that I can tell you about the dream

and the nightmare.

The dream

has been

the laissez-faire vision

of online ads.

These ad exchanges

would connect ad buyers and ad sellers

and we would have

a transparent marketplace where finally,

we'd be able to overcome

what's known as Wanamaker's law.

Wanamaker's law is

50% of the money I spend on advertising

is wasted. I just don't know which.

The idea is with data,

with targeting, with all this machinery

we've built, finally

we can get this thing to work.

This is something you still hear from ad boosters

which are people in the industry that say

no, we've cracked this.

We can put in $1 here,

get $1.25 out, and by and large

the system works.

We've really cracked it.

One of the things I point out in the book

is that this marketplace may be

a lot less functional

than it might initially appear

because it relies on a number of assumptions

that don't turn out to be

ultimately true.

What I argue is that we've got

implicit in the title of the book

Subprime Attention Crisis is kind of

bubble in the making.

We have a market that people believe

is extremely, extremely valuable

and only getting more valuable

is dysfunctional with time

and that the kind of central promise

of this market, which is

I can reach a consumer and get them

to buy my product, is not really

ultimately playing out.

I can kind of sketch out just a few arguments

and I'm sure we want to go into them.

Yeah, make the case for me.

This is not what it appears to be.

This is not worth what people think it's worth.

Maybe a couple of quick arguments

I'll make on this front.

The way I kind of think about it is

hyper-targeted mind control laser

that you fire from space to this consumer.

I can get to Tim

to change his behavior

and as I said before, that relies on

a couple of different assumptions about

things working really well in the

ad ecosystem. So the first one is

that you can reach me or you can reach

a real human at all. That is to say

when I deliver an ad on this marketplace

that it actually goes to someone

who is a human

and there's these really interesting kind of

things that have been done. So

Forrester, the research group did this paper

that kind of suggested that 56%

of display advertising, so the kind of

ads that you see on places like Facebook

may actually never see a real person.

It's kind of like lost to fraud

and the way the kind of gimmick works

is basically that these are ads that are

basically being delivered to a fraudster

that actually has a bot that's loading

a website or has what's known as a click

form where you pay a bunch of people to click on ads.

And the scale of that's huge.

The really kind of ambitious estimate

is one in out of every $3

is lost to fraud online.

So, okay, well, maybe you take a look at that

and you say, okay, Tim, like lots of markets have fraud.

Let's assume that you actually reach

a real person.

And then I'd say, actually, that's also another assumption.

The assumption that you actually reach a person

and you have relevant data

about that person. So I've been using the

mail 25 to 35 through the episode.

There's some studies that suggest that

essentially like 41%

of sort of ad campaigns

don't actually reach the right person

because the ad data is all inaccurate.

So you think you're reaching mail 25 to 35.

Turns out it's like female

75 to 95 that's living somewhere

completely different from where you thought.

And then I think there's another kind of layer of arguments

which is to say, okay, well, Tim, like we're going to

reach a real person. We're going to have accurate data

about them. Does this actually work?

And again, another number

of really funny kind of shocking stats, right?

So Google itself did a study a number of years ago

that suggested that even if the ad is delivered

56% of ads

are just never seen, right? They're like below the

fold. They're in some weird corner of the site.

You're just not looking at it because you're reading the article.

And so, you know, I think the way this kind

of goes is kind of ultimately you're like kind

of grinding, grinding, grinding, grinding down and

you're like, are these ads actually even reaching

people? Is this as effective as we think it is?

And I think in the very least, right, even

though we can come up with examples of ads

working, the question is whether or not that's

the median case, right? Is that that's by and large

happening in the ad markets? Or is it largely

kind of money that's being kind of like wasted in the

sort of weird system of

fraud and lack of attention and

inaccurate data and all these sorts of things. And so

the sort of vision of this kind of mind control

laser from space is a kind of vision of perfection

that doesn't actually exist once you actually get into

the guts. And so what if it

doesn't work? Why should I care

if this ad bubble, if it is a bubble

pops? Yeah, I

agree. I think like the reason

we should care, right, is not

so much that we're worried about Mark Zuckerberg

having a couple less billion dollars, right?

Like I think the reason we should care is

that this ecosystem funds

almost everything that we know about the

web. It subsidizes the fact that we can access

a lot of services for free online.

It funds journalism and media. Like if you think

that's important, that's like a huge reason to care.

One of the things that I think is another

weird angle on it just to throw it out there is

a lot of these companies that have become so

rich off of the

ecosystem are simultaneously subsidizing

lots and lots of other

things outside their industry, right? So you think

about the entire kind of wave of

advancements in AI.

Those are being done by companies that

can only subsidize those at a huge, huge

loss because they make money through

advertising, right? So there's also like this kind of

relationship between like the health of this ecosystem

and the kind of advancement

in science and technology. So I think

for all those reasons, right, like I think we should

care more about this

because it touches so many

parts of our lives. And I think if it is as

shaky and as messed up as

there's a lot of evidence to suggest that it is,

you know, we might want to think about like the stability

of that market, right? And like, you know, the

bigger question, right? Which is what do we think we want

to replace all this?

One thing that was interesting for me and challenging for me about

your book is that it takes this reverse

view of the way I normally think about this

market, which is that what I care

about is the quality of the attention

not what is happening to the

advertising. And you're making this point that,

well, if it turns out the advertising isn't working,

then a lot of the

economic underpinning

of the web all of a sudden blows up.

But let me push on this a little bit

because I've covered financial crises

and in particular cover the subprime

mortgage crisis. And so

I spent a lot of time thinking about this metaphor.

And

one thing that occurred to me about it, there's

an old Keynesian insight

about financial crises, which is that what

is weird about them

and the damage they inflict

is it nothing has happened to the factories,

nothing has gone wrong with the people,

nothing has been lost

on our knowledge of how to do work, that

the economy has not become any

less productive at its potential.

There is just this weird financial

dynamic that makes it less productive in

fact, because people, you know,

lose their money and stop investing and so on.

And one thing that struck

me is that that is

a disanalogy here

because I think the thing that I worry about most,

not with whether the ads work or not

because you can imagine this happening, maybe

even happening worse in a situation where all

the ads work perfectly, but

is that if you think of

attention as a collective good, a public good,

a public resource, which I do think

of it as, then

if the ad

industry is getting either

too good or too pervasive or too

attention grabby or whatever it might be

or what it's supporting

is not good information,

then it's degrading the collective quality

of the attention. Like unlike in this

prime mortgage crisis where all the houses work

basically fine, right, you could inhabit them.

I worry that our collective

attention is being degraded

by the way the web has evolved

and every individual

player has

an individual incentive to grab more and more

attention. It's highly competitive.

They're all competing with each other for

our attention. And so you get

this sort of tragedy, the comments dynamic

where everybody is basically

exhausting our attention, making us irritable

and angry at each other and

unable to focus.

And it's not really in anybody's interest

to figure out how to collectively

manage the attention to the comments better.

I'm curious how you respond to that.

Yeah, I think that's right and I think

luckily I don't think we're too far apart

Ezra in some ways. The stat

that kind of really sticks out to me when you say

that is this kind of comparison I do

in the book between the first first banner

advertisement that ended up on the web

as this AT&T campaign that was

running on, I think, Wired.com's website

and the click-through rates there

in 1994 were 44%

which is wild. It's almost from like a

science fiction universe because I think if you're

familiar with the stats

that we have today from banner advertising

it's more like 0.1%,

right, like you're thrilled if you get anywhere

near 1% click-through.

Anyways, I come to mention that just because I think

it's like almost a proxy for what you're

talking about, right, which is sort of like

attention as a common good and whether or not

the incentives of this market are

essentially driving disattention, right,

that like basically your content

feeds, your information feeds are just filling

with so much garbage that even

the good stuff can't get through

and the end effect is that people just pay attention

less or they pay attention in a much more

shallow way than they used to

and that ultimately is a kind of problem,

I guess implicit what you're saying is kind

of a problem from like a societal standpoint,

almost from like a democracy standpoint.

I think it's also kind of like an interesting

way of sort of using the subprime

metaphor again, right, because what is the core

asset that we're buying? We're buying

these kind of like click-throughs, we're

buying these engagements, we're buying these

moments that you look at online,

but the core of it,

which is how much are people actually paying

attention to the ad is declining, declining,

declining and I think it's a little bit like

the subprime mortgage crisis in the sense that you have

generalized debt obligations where people are like,

we're going to just keep buying the same mortgages

as we've always done, but underlying that

the asset's just getting worse and worse

and worse and worse and worse until the whole

thing kind of busts and I think that's similar

here, right, which is the market's still behaving

as if it's buying attention circa

1994, but the kind of collective

incentives of the market to take kind of a

Keynesian approach has resulted

in a situation where like the underlying

kind of societal dynamics of this if you

will are not really supporting the kind

of attention that was bought and sold back

in the day and I think that really

is kind of quite parallel to the crisis.

The weird effect of that if you buy what I'm

saying though is that when we looked

at ads in the early 90s,

they really did work better, which is

kind of the funny thing, like there maybe

been a period where actually ads did work better,

but essentially the core underlying asset,

which is attention, has become so degraded with

time that like this channel is becoming

useless and maybe this is kind

of a way of thinking about advertising, which is

advertising is more a function of novelty

than it is a function of anything else

and so that the internet is

kind of just going through the same thing that all other

media channels have had, which is that it fills

with terrible advertising and then people are attracted

to the sort of high value attention channel

and they move on and maybe that's

happening with the internet as a whole.

I think this is a place

where in a weird way advertising

and basically everybody else on the internet

the incentives are aligned

but nobody seems to know what to do

with it, which is

I'm not very convinced by the idea

that advertisers are going to wake up one day

and decide their ads aren't working anymore

because I'm more of the belief, as you

mentioned that law earlier, that they know

a lot of them don't work, but they also don't know which ones

do work and everybody is trying

to be the place where it really works and so

that can just roll on for a very long time.

But

the danger to ads

is ad blockers.

We see a pretty

significantly growing proportion of the online

user base using ad blocking technology

and that can't get away from everything

but it actually can block quite a bit.

You see Apple dealt

a pretty significant blow to Facebook

now met as business by just creating

this little ask app not to track

just knocking app tracking

which is

part of the advertising machinery

from iOS

or at least making it easier to block app tracking

within iOS

but the more this happens

the more you're seeing

these symptoms

of on the one hand

really significant user discontent

people don't like the way the modern internet feels

they don't like the ads on it

to some degree they just don't even like what they're doing on it

I always think it's a much bigger vulnerability

for Twitter than people give it credit for

that so many of its power users have this

hellscape attitude towards it

it's like oh another day on the hell site

that's not a great way

for your loyal user base to feel about you

I think it's fine to say that's a bad user experience

yeah so something is going wrong

there that I mean even in Elon Musk's

letter to advertisers he talked about

Twitter potential

Twitter's potential is a hellscape

there's something wrong there

that if there becomes a technological

or competitive answer to that

something else that does something similar for you

but doesn't make you feel like that

you can see mass migration and so one of the things

that feels to me much more rickety

internet than people realize is

people don't like the experience of it

and they may not feel like they have

good alternatives but the more they

do be that browsers

that block ads or other kinds of services

or whatever the more they might end up

you know getting into some tipping

point dynamic or once a network

effects of things begin to fade

they everybody begins to leave and mass

so

a lot of things to respond to there

I think that's right that you know

you're almost kind of like articulating

an alternative path

right to how this whole

ad thing might come apart

and it isn't the kind of sort of explosion

that I'm putting out in the book but more sort of

the shift in

sort of what people want

when they go online and I think that's right

right like I think ad blocking in some ways

is just the most kind of potent

or most striking kind of like proxy

for the fact that people just don't want

to pay attention to ads right and so like

there's two ways of avoiding ads or you just don't

pay attention to them or you go out of your way

to install software that actually

blocks those ads and you know the numbers

that we've seen on ad blocking is that it is

showing up right and so there's maybe

one small stat here that I'll maybe drop

which is pretty interesting there's a study

from comscore a number of years back

that kind of concluded that sort of 8%

of the population is responsible for

85% of the clicks online

the clicks on ads are all clicks

I believe it's based on ads specifically

so one of the things that's sort of interesting

about that is kind of an ad ecosystem where

you could sort of imagine this kind of

weird ecosystem that is maybe parallel

to what you're talking about which is basically that

like people get tired they drop off

they go off these platforms

we kind of like have more and more the ad

ecosystem resting on a small group of people

who are just ad maniacs

I think that's like a potentially sort of

like interesting outcome from what you're talking about

and I do think that you know when people say

oh you know like I was catching up

with a friend recently who is like

it feels like the era of Twitter is

over right like we're not going to see a Twitter

competitor just because people just

don't want that experience anymore

it is sort of interesting to consider it's just like

is the future of the internet really social

like maybe we kind of want to escape

that just because that channel has become so polluted

and has so much baggage now that it's almost

kind of unsustainable because it has like

it's toxic to launch a social

network given the sort of like

norms and expectations that you know people bring

that kind of product.

Twitter brings up an interesting shift here though

which is another thing that could

happen is a shift to more

mixed business models and in particular I think

we're at least seeing both in

terms of actual platform

and publisher behavior

and in investment at least

a lot more experimentation with subscription

so there's of course the big

streaming platforms which are mainly

subscription based right you think of

Netflix or Disney Plus or HBL

those are not advertising based businesses

maybe they'll have some

now or later but that's not really what they're doing

you saw YouTube roll out

a subscription product

I pay for that I find it very much

worth it I don't have ads on YouTube

anymore and it's better

Twitter Blue under Elon Musk

they fired a bunch of people they made themselves

much more toxic to advertisers

and now they're trying to get people to pay a subscription

fee I don't know if that will work out but it is

certainly what they are attempting

I've mentioned Substack which

isn't a huge business exactly

but I think it's had a very outsized

effect on how people think of

how you might fund media

online and I think actually much more

so at the vanguard of that is the New York Times itself

which has built a huge subscription business online

much bigger than I think at this point anybody

else's and sort of proved at least

it is possible to do but of course

the FT and the Wall Street Journal and the Washington Post

and others have them as well

and so it seems to me there's

a shift right now both in fact

and zeitgeist towards

subscription maybe not always to the

exclusion of ads a lot of these

are hybrid models but trying

to hedge your bet a little bit

how do you think about that

yeah I'm really excited

by these types of models

and this maybe takes us all the way back to the

early part of the episode is

you know for me a lot of this comes down to

when someone encounters

content you know

whatever that word means on the internet

what do they expect to pay for it

what is the expected value

I guess and and expected price

of that and

a lot of that I think is like

it's a common good in some ways right which is okay

we could live in a society where everybody says oh yeah

just by default I just think that this

should cost money I will pay for it

and all of these kind of

attempts to sort of like scale subscription

normalize subscription

if you will kind of like shift the overton

window around subscription

are to me really really important because

they in some ways kind of create the sort of like

normative scaffolding

that other businesses can build on right

like okay well great we've got actually

like an audience of people that have proven

that they want to pay for things

in this way online now that

expectation is set maybe we can build on that right like

it's not so weird for you to pull out your wallet

and do that online

so I'm quite interested

by it and I think it's exciting because

like if we can win that sort of

war for hearts and minds I guess that's

to be too dramatic about it like

possibilities start to open up on the web

right because I think ultimately this ends up being

people and how they want to spend their attention

and how they price their attention

now I think the only kind of note that I'll strike

maybe on the other side of that is that there are

some people that say

and then we'll live in a media utopia

and that's a little bit of a straw man but

I think I kind of pointed out to say that

there are trades there are very real trades

in imagining an internet

that's all subscription right like one of them

is just accessibility

one thing that a lot of people have kind of interestingly

sort of pointed out is like a world in which high quality

media sources are moving behind the paywall

is one in which low quality media sources remain

out and widely available

and I think that kind of dynamic is

is a really sort of interesting

one and I think part of it is just like

do we want to live in kind of

like a Walt Garden Web right where it's like

okay well you can you can access this kind of like

other worlds but only if you can pay

I think overall I tend to be still in favor

of subscription and normalizing subscription

because I think it forces that hard conversation

right which is what kinds

of these services are so valuable

as to maybe being something

we want to subsidize or like kind of think about

as a form of infrastructure that you sort of have

access to as a right

we've been able to avoid those discussions because the price has been free

but the creation of subscription

also kind of like I think forces that

for any conversation in a way that I think is ultimately really helpful

So you worked at Harvard MIT's

Ethics and Governance of AI Initiative

you worked as Google's Global Public Policy

Lead on on on AI

about a couple years ago

AI is is exploding much more

into wide use now

I hear the things are happening

Yeah there's been been a lot I don't know if you've noticed

and one thing

that I would say concerns me about it

is that a lot of the major AI shops

either are part of

ad-based businesses so Google

or Alphabet I guess

has a lot of AI work going on

Meta has a lot of AI work going on

or attached them in one way or another

so open AI has a lot of investment

from Microsoft which obviously sells

a lot of software but if you think about

what they want to achieve one day with Bing

I mean there's a big ad market there too

right and what the kind of AI we're

creating is good at is just creating

endless quantities of

personalized manipulated content

and figuring out

what people want from that content

one thing that worries me is actually a

world in which AI is used to make online advertising

much much much more effective

and personalized and omnipresent

and creepy

but maybe I'm looking at this wrong way

so I'm curious if somebody's thought a lot

about ads and thought a lot about AI

how you see AI changing

what is the fundamental business model of the internet

now that the major AI systems

are being created by the people who control

the models

yeah big question

and I think there's a couple ways at it

I think we can think a little bit about the influence

of the kind of current wave of

AI innovation which is a specific technology

called large language models or LLMs

as having an impact on

sort of the product landscape on one hand

and then on the business landscape

the ad landscape on the other

and so let me first begin I think by

kind of thinking about the product landscape

I think what's so interesting and

one of the reasons that has been reported

there's a code red at Google

that OpenAI's chat UPT has gotten so many

users we're worried because it might

ultimately replace search

and we can almost think

about like the epistemology of search

if you will the kind of experience

we've had with a sort of google

centered web over the last few decades

is one in which you punch a search query

into a box and what comes out

of it is a set of options

it says okay we've ranked these

and you choose and you know hopefully

we've delivered something that's relevant to you

and you click on it and you go about your day

what's sort of intriguing

if you think about sort of LLMs

as kind of a thing that might eventually replace

search because it's easier

people want to just like deal with one

conversation not have to translate through

or trawl through like a bunch of different search results

is that you almost changed the epistemology

of what it means to kind of explore

the web right that

you know rather than putting you know your search query

into a box and getting 10 links

what you now have is a single voice

that synthesizes the information

and then offers an opinion

right and there's ways of crafting that

you could make your agent you know more or less

uncertain more or less ecumenical

more or less you know willing

to give you different types of points of view

or different links to different types of information

but it is a lot more kind of constrained

because it happens in the context of like a voice

versus what you could think of as search

being much more of kind of like

a computer in the old vein right like an information

terminal that you type things into to get information

and I do think that that

is potentially kind of like worrisome right

which is like we're kind of moving to

an internet that's based on kind of like monolithic

narrative right synthesized by a

machine rather than an internet

that's based on kind of searching through

lots of different options on your own right

and one is less friction one actually might

give you better results right like it's possible that

the agent gives you the result that you're looking for

even better than Google but I think part

of the question is like do people start to

think about the internet quite differently right

that like do they not necessarily really

want an internet of websites what they want

is an internet that's kind of translated through

an assistant and I think that leads to

a very very different experience

of the web if we go go down that route

it's funny because I remember

a previous iteration of this fear

for Google which I think was less

true obviously but

there's a period when Quora the question

and answer site yeah was

a very big darling of Silicon Valley

and I don't remember where

I read the major article on this I vaguely

think it was wired but that might be wrong

but there was a belief

among some people that Quora

was going to replace Google like this would be

the future of search you would ask a question

or you would search questions had been asked

you get this great answer from the community

etc etc and that never came

to pass right and Quora kind of

became a search engine mill with

decreasing quality over time but it does seem

to me that the vision here is something

like what that vision was

that instead of

asking Google and Google

gives you a

array of websites you might want to look at

I mean what you can do right now with chatGPT

is ask it a question

and get some answer that

to be honest in most cases

when I ask it a direct question I get a sort of better

answer than I do directly from Google now

which I think has become a much degraded

product but nevertheless

I wouldn't exactly trust it

because it constantly hallucinates information

at me it doesn't know anything that happened

after 2021 it's a little bit of a

weird I mean it's not really

search it's a

I don't know what to describe it as but it strikes me

as odd

it's reality fan fiction at the moment

right like but that's why it seems to me

to make more sense for advertising than for search

in a way I'm sure people will

try to integrate it in search and I kind of suspect

Google is going to make Google somewhat worse by integrating

it to search very quickly out of

panic but

I don't know advertising doesn't have to have that much

relationship with the truth

and AI doesn't have to have that and a lot of

the programmatic advertising you're talking about

is terrible because they don't have budgets

to get good ads built for them

so you could really imagine them

working much more with AI and AI is much better

taking in feedback and then altering what it's

doing based on you know metrics

coming in from the customer it just feels

to me like AI these large language

models are almost perfect

to be hooked into the online advertising schema

in a way that they're not perfect for

quite anything else where you really need to trust

what's happening because like you're not just trying

to get manipulation metrics done

yeah I think that's right I think

you know kind of what I'd say

is whether or not you believe that

we finally have crossed the

want to make or threshold right like when we think

about it as kind of like an event horizon

where the ongoing dream of the internet

is I can deliver a message

that is truly persuasive

and like I can do that automatically

and I think you kind of have

to believe that there's something that's been

so dramatic

that's been unlocked by LLMs

that the ads are going to be

that much more effective

and that I'm not so sure

on maybe I think one thing

that I will like I can see

we're going to create the ability to create like

very high quality high fidelity

ads and distribute that to everybody

there's a project I'm working on

with a friend of mine Noah

where the plan is to basically do like a

Turing test for ads right where we basically

have a bunch of people generate human based ads

have a machine generate a bunch of synthetic ads

and the idea will be to get a bunch of ad execs

to say can you actually tell the difference between the two

and then the purpose of the exercise to demonstrate that

like I think the quality is getting to the point where

yeah do you need these creative agencies

do you need like the whole

kind of like again like infrastructure

of marketing to produce ads

that have that vibe

that we spent a lot of money on it and it's brand advertising

and I think that that is something

that will definitely change in the next

few years but as always

as I've done multiple times this conversation

I think again we still have to decouple that

from the question of persuasion right we may be flooded

with these kinds of ads

but I think again like I'm not so

certain that open AI has cracked here

is like the finally

the kind of like mystical persuasion engine that the ad

industry has been looking for all these years

well to take the other side

of that and to try to beef up

opening eyes valuation just one more time

they need it I think

I think the theory here would be that it's not

that what they've cracked

is that their system can write a better ad

than maybe it can in many cases

it's that what AI can do

is

enter into a tighter constant

feedback loop

because it's basically

costless to create a new ad based on

information you're pulling in from the person

so I'm going around the internet I'm getting tracked

and as you say a lot of what I get

now is unintentionally

hilarious like I go I buy

a bicycle and then for two months I was like

you want to buy a bicycle

how do you feel about bicycles

but in this case if you

hooked the AIs

into that tracking data

and you can see what I was doing and not doing

and they can generate

possible ads

for no cost at all

and they're quite good at it

what they are able to do right now I think is quite amazing

and it'll be better in a year and that much better

in two years and that much better in five years

it's the connection

of the AI's ability to learn

and track you

and costlessly experiment

with what will work for you

then within the ability to deliver that to you

that makes something different I mean Jeroen Lanier

has often talked about the fear

of the internet turning into a skinner box

and the sort of technologist

and VR pioneer and I think

sort of technophilosopher

where it just gets so good because of AI

or other things

at taking in signals from you

and then using it to manipulate your behavior

and that we don't want that level of persuasion

to be cracked that in many ways maybe another way

of putting this is maybe the nightmare is not

the nightmare of your book

the nightmare where the agencies recognize

persuasion is collapsing

it's the reverse

that the systems actually

get really really really good at persuasion

and have the information

from you which they maybe have now

but then also the systems to iterate

and experiment based on that information

so they're not giving you returns on that that are

ridiculous that makes a

truly scarier internet

not just for selling you things but

political propaganda disinformation

and fake news and all the other things one might

worry about

Yeah I mean it's possible I mean it's a really

just kind of long bet because the root

thing of what you've just said is people having

an intimate relationship with these agents

and I don't know I should just ask you

right like are you friends with chatbqpt

right like do you feel like that you've really

built up a relationship with any of the kind of LLM

technologies or could build relationship with any

of those technologies I'd be curious

to hear what you say about that

Oh I don't think I'm really friends with chatbqpt

but what I do think is that I'm

Google knows enough about me

that if you imagine Google has its own version

of chatbqpt

and that is not having any

direct relationship to me that I know about

but it's pulling in this data that

is used in very crude way right now

by the ad marketplaces but is now

consistently experimenting

based on these signals

and serving me up new and new and new

and new content really

micro targeted at me which

would be prohibitively expensive to do right now

when you need a person creating this

targeted experimental

content for every other individual person

that that's where you pass

some kind of threshold that the corporations

can't currently do now because

the scaling cost of that would be prohibitive

yeah it's

again it's I think it's possible I would do the

metadata right which is I think that the very

fact that we're talking about this and it is

dystopian and creepy

makes it a hard sell to the average consumer I think

right like because this is basically the creepiness

that people experience with like retargeted ads

for bikes for instance times

1000 and I guess the question is like

whether or not that level of

intimacy is also

going to come at the expense of trust

right which I think is also maybe an interesting outcome

which is I can deliver you the most micro targeted

excellent ad ever in some respects

but off the bat

you find it really weird that a system

has provided a recommendation of that level of granularity

again as always I think

the exercise will be can it become

normalized right and I think that that is

almost a picture something that sits outside of

technology

I think that's a very smart way of thinking about it

I think it's a good place to end too so always

our final question what are three books you'd recommend to

the audience

there's three books I've been reading

or have read as of late

first one is I've been revisiting a bunch of books

from the early part of the 21st

century like the 2000s

that were all kind of excited about the

prospect of the social web so the book I've been reading

there is clay shirkies here comes everybody

which is kind of this early book and kind of like

filled with excitement about the promise of

social technology and social media

and I think it's so interesting to revisit that

rhetoric just because I think it teaches

us a bunch of lessons about like what went right

what went wrong

the second one is my friend and I Craig

are working on this podcast almost impossible

so I've been reading a lot about Vegas

so there's a great book I'd recommend by Sally

Denton called The Profiteers

which is about this company Bechtel

which is one of the big companies that helped build the Hoover Dam

and basically became sort of like

the mega infrastructure builders of the

20th century it's like

completely fascinating explains much of the west

explains nuclear power

the company's in everything and so it's like

totally fascinating story

and then the last one I'll mention is maybe a little harder to find

but I'd totally recommend it for anyone who's interested

in it the book called Jim Ravel's

theatrical pickpocketing

it's a book that came out in the 80s

but is still available there's a magician by the name

of Mike Cavany who sells it on his website

and it's basically a very practical

how-to guide to do pickpocketing

as an entertainment performance

and I've been looking to because there's this

really fascinating history between the history of clothing

and how sort of magical illusions are performed

you know where your pockets are

whether or not your average audience member

has a vest on you know that kind of stuff

and that's a final one that I'll mention

that is just like an incredibly fascinating

read and if you want to steal someone's watch

it's good for that as well

Tim Wong, thank you very much

Ezra, thanks for having me on the show

The Ezra Clangio is produced by Emma Fagabou

Annie Galvin, Jeff Geld, Roger Karma, and Kristen Lin

fact-checking by Kate Sinclair

mixing by Sonia Herrero

original music by Isaac Jones

audience strategy by Shannon Busta

the executive producer of New York Times

and Penny in Audio is Annie Rose Strasser

Christina Similuski

Machine-generated transcript that may contain inaccuracies.

For most of us, seeing an advertisement pop up while we’re scrolling on Instagram or reading an article or watching a video is the most banal experience possible. But in the background of those experiences is a $500 billion marketplace where our attention is being bought, packaged and sold at split-second speeds virtually every minute of every day. Online advertising is the economic engine of the internet, and that engine is fueled by our attention.

Tim Hwang is the former global public policy lead for A.I. and machine learning at Google and the author of the book “Subprime Attention Crisis: Advertising and the Time Bomb at the Heart of the Internet.” Hwang’s central argument is that everything about the internet — from the emphasis data collection to the use of the “like” button to the fact that services like Google Search and Facebook are free — flows from its core business model. But that business model is also in crisis. The internet is degrading the very resource — our collective attention — on which its financial survival depends. The resulting “subprime attention crisis” threatens upend the internet as we know it.

So this conversation is about the economic logic that undergirds our entire experience of the internet, and how that logic is constantly warping, manipulating and shaping the most important resource we have — our attention. But it’s also about whether a very different kind of internet — build on a very different economic logic — is possible.

Mentioned:

Does Quora Really Have All the Answers?” by Gary Rivlin

Google report: “5 Factors of Viewability

Almost Impossible

Book Recommendations:

Here Comes Everybody by Clay Shirky

The Profiteers by Sally Denton

Jim Ravel’s Theatrical Pickpocketing

Thoughts? Guest suggestions? Email us at ezrakleinshow@nytimes.com.

You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein. Book recommendations from all our guests are listed at .

“The Ezra Klein Show” is produced by Emefa Agawu, Annie Galvin, Jeff Geld, Roge Karma and Kristin Lin. Fact-checking by Kate Sinclair. Mixing by Sonia Herrero. Original music by Isaac Jones. Audience strategy by Shannon Busta. The executive producer of New York Times Opinion Audio is Annie-Rose Strasser. Special thanks to Pat McCusker and Kristina Samulewski.