The race to commercialize the Internet is over, and advertising is the big winner. This is excellent news if you are an executive or major shareholder of one of the handful of companies that dominate the $600 billion global digital advertising economy. For almost everyone else, advertising’s good fortunes have meant the erosion of privacy, autonomy, and security, as well as a weakening of the collective means to hold power accountable.
This is because the industry’s economic success is rooted in its virtually unrestrained monetization of consumer surveillance. Digital advertising technologies are widely distributed but largely operate under the control of a few giant companies whose monopoly-like market power has, among other ills, unleashed a wave of manipulative communication and deepened a revenue crisis among the nation’s most important journalism outlets. For the ownership class of Silicon Valley, digital advertising has been a gold mine of epic proportions. For democratic society, it is gasoline on a fire.
The deep problem is surveillance advertising: a business model based on persistent and invasive data collection. At its core, surveillance advertising uses data to try to find ever more effective ways to predict and influence people’s behaviors and attitudes. Of course, advertising is old; companies, politicians, and other groups have long been interested in knowing and influencing many kinds of publics. Today’s regime of surveillance advertising on the Internet is not so much a new development as an acceleration of long-standing social trends at the intersection of technology, marketing, politics, and capitalism at large.
That acceleration has been in the works for decades. Though widespread popular scrutiny of Internet tech companies has exploded only in recent years, the key moments in the historical construction of surveillance advertising unfolded in the mid-1990s, when the new technology of the World Wide Web was transformed from an outpost on the fringes of business to a central nervous system for commercial monitoring. To paraphrase Thomas Streeter, surveillance advertising is not something that happened; it is something that was done. In other words, the massive data collection infrastructure that undergirds the Internet today is the result of twenty-five years of technical and political economic engineering. Surveillance advertising was created by marketers, technology start-ups, investors, and politicians, a coalition bound by the desire to commercialize the web as quickly as possible. Through bouts of competition and collaboration, private and public sector interests steered digital networks toward maximizing their monitoring and influence capacities, tilling the soil for all manner of deceptive communication practices and wreaking havoc on less invasive media business models. The legacy of this period is the concentration of surveillance capacity in corporate hands and the normalization of consumer monitoring across all digital media platforms we have come to know today.
The political and economic roots of surveillance advertising are important pieces of a larger conversation about Internet companies and the power they wield in society. This conversation went mainstream in 2017 as journalists, tech workers, activists, and academics investigated and publicized a cascade of scandals coming from Silicon Valley. In what became known as the “techlash,” the world’s biggest Internet companies faced international public rebuke over controversies around gender discrimination, appalling labor conditions, lax data security, anticompetitive behavior, tax avoidance, addictive product design, algorithmic bias, and objectionable military contracts. Public opinion cratered as pollsters reported that “few Americans trust major tech companies to consistently do what is right.”
Facebook was at the epicenter of the techlash, especially following the 2016 U.S. presidential election. But the vitriol around the Cambridge Analytica and Russian disinformation scandals reflected a deeper complaint: the pervasive consumer surveillance at the heart of the Internet’s advertising business model was out of control. The large reserves of public goodwill that Facebook (now Meta), Google, and the like had enjoyed for much of their existence seemed to be running dry. Certainly these companies had faced criticism in the past, but the techlash was different in that it fostered more than disconnected, one-off condemnations of this or that shameful incident. A structural analysis began to take shape, particularly around the collective harms of business models based on surveillance advertising. As digital rights researcher-activist Nathalie Maréchal argued, microtargeted advertising “drives company decision making in ways that are ultimately toxic to society.” It was becoming widely obvious that consumer data collection was not simply about providing “relevant” ad messages, as ad platforms often claimed. “Their business depends on manipulating behavior,” wrote journalist Rana Foroohar. “It is a business model that causes endless collateral damage.” Even the creator of the World Wide Web weighed in. “We don’t have a technology problem,” said Tim Berners-Lee. “We have a social problem.”
The most important lesson of the techlash has been to unmask a series of seemingly extraordinary scandals as business as usual—inevitable outgrowths of a surveillance advertising system that most people had simply taken for granted as the way the Internet works. Facebook and other ad platforms framed the scandals as a matter of “bad actors” hijacking their systems, but this defense was a shallow attempt to obscure the fact that data-driven influence peddling is their industry’s bread and butter. Facebook had not been hijacked; its platform had been used as intended. The same was true for disinformation operations, which simply plugged into the existing digital advertising apparatus to reach groups deemed most susceptible to political influence. Leveraging surveillance to strategically target vulnerable audiences is not some rogue use of digital advertising technology; it is its very nature. As Dipayan Ghosh and Ben Scott put it in their summary of the election scandals, this stuff is “digital marketing 101.”
To understand how we got into this mess—and how we might get out of it—we have to look beyond the recent past to the longer contours of twentieth-century political economy. We have to ask, in particular, how and why certain surveillance technologies and practices were elevated or suppressed as the web congealed around business priorities.
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First, some context. Today more money is spent on digital advertising—meaning online and mobile formats—than on any other media channel in the United States. Analysts estimate that more than half of global ad spending goes to digital platforms. Consumer monitoring is now effectively ubiquitous under what investigative journalist Julia Angwin calls a “dragnet” of surveillance. This system depends on an infrastructure of data collection and targeted messaging that undergirds nearly all modern digital media. Leading ad platforms like Google and Meta operate vast networks of surveillance that extend well beyond their own sites and applications. A study of 1 million popular websites found that nearly 90 percent collect and exchange data with external third parties of which most users are unaware. From period-tracker apps to porn sites, ad platforms scoop up all manner of sensitive personal information in order to power their “digital influence machine.” Privacy has been obliterated as surveillance advertisers have created countless ways to link online and offline information.
Surveillance advertisers use data to build consumer profiles, sorting people into various categories and rating them against any number of predictive benchmarks such as creditworthiness, propensity to buy a luxury car, or risk for alcoholism. Meta maintains profiles not only for its 2.7 billion users but also for people who have never signed up for any of the company’s services. And all this data can be used to make startling and intimate predictions.
The business objective of all of this data collection and profiling is to sell the capacity to influence people’s actions and attitudes, what Shoshana Zuboff, in her recent book The Age of Surveillance Capitalism (2019), calls the “means of behavioral modification.” Today the cutting edge of this practice uses data signals to forecast and test people’s vulnerability to different kinds of appeals. Advertising that is designed to exploit emotions and personality traits has been found to be particularly promising. Internal documents leaked in 2017 show that Facebook claimed its ad platform could predict the emotional states of teenage users to enable advertisers to reach those who feel “worthless” and “insecure” in real time. As Frances Haugen, the ex-Facebook employee turned whistleblower, told Congress last year: her former company knew about the harmful impacts of its business model but chose to “put profits over people.”
Yet there is good cause to be skeptical of claims about surveillance advertisers’ persuasive power. As Cory Doctorow argues, microtargeted advertising is more a sales pitch aimed at marketers than a consumer mind-control ray. Despite the proclamations of self-interested proponents and well-meaning critics, many studies find that Internet advertising is not all that effective at modifying consumer behavior. But, as Doctorow points out, focusing on the effectiveness of a given ad campaign misses the forest for the trees. Leading advertising platforms like Google and Facebook have created a global communications infrastructure grounded in covert surveillance and asymmetrical control over information. In building these kinds of systems, ad platforms encourage, naturalize, and profit from manipulative and discriminatory behaviors by their clients, rendering Internet users as little more than marks to be sold to the highest bidder.
The surveillance advertising industry is dominated by a handful of companies including Google, Meta, and Amazon, which together control nearly three-quarters of the global digital advertising market. These firms are the world’s foremost purveyors of commercial surveillance and, despite recent market turbulence, among the most valuable corporations in existence. Market power and political power are deeply intertwined. Meta, followed closely by Amazon, is on track to spend more money on lobbying than any other U.S. company this year. Google, ranking a few spots lower on the spending list, maintains a “55,000 square foot office, roughly the size of the White House, less than a mile away from the Capitol Building.”
One of the most troubling outgrowths of digital advertising’s market concentration is the exacerbating revenue crisis among U.S. news organizations. For over a decade, news outlets have been confronting a death spiral in which declining ad revenue prompts cutbacks and layoffs, which reduce the quantity and quality of news production, which further depresses revenue. Although the problem is multifaceted, the fact that two or three companies hoover up the majority of advertising spending in the United States means that news organizations must compete with every other ad-supported Internet service for the scraps.
Newspapers, still the most important source of original reporting, have suffered the worst. According to the Pew Research Center, the total number of newsroom employees in the newspaper sector was cut in half between 2008 and 2019. As ad platforms have grown rich using consumer data to power targeted advertising, news organizations have shuttered their doors at an alarming rate. Paper closures have created a dramatic expansion of what Penelope Muse Abernathy calls “news deserts.” As of 2018, “half of the 3,143 counties in the country now have only one newspaper, usually a small weekly, attempting to cover its various communities.” The dismal outcome of this journalism crisis, writes Victor Pickard, is “a lack of public access to high-quality information, a loss of diverse voices and viewpoints, and the evisceration of public service journalism.”
It didn’t have to be this way. No law of nature says that every new communications technology must be harnessed to the cause of advertising, let alone transformed into an engine of systemic consumer surveillance. Although there were strong social pressures to bring advertising to the Internet, there was no guarantee such efforts would succeed—particularly not on the World Wide Web, which was released into the public domain by Berners-Lee in the hopes that it might become a “universal medium for sharing information.” Early web technology was designed to be open-ended and flexible, but it was also anonymous and nonintuitive, hardly optimized to serve the marketing needs of business. So how exactly did we get here?
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One answer to that question has begun to emerge from Silicon Valley itself. In the wake of the techlash, a procession of Silicon Valley defectors have taken to opinion pages and conference daises to lament the state of their industry. Having more or less disembarked from the surveillance advertising money train, a handful of former executives and investors have newly emerged as conscientious objectors. Chamath Palihapitiya, who served as Facebook’s vice president of growth, confessed that he felt “tremendous guilt” for his role in the company’s global expansion, even though it made him extremely wealthy. After condemning his former employer for “creating tools that are ripping apart the fabric of society,” Palihapitiya added: “I don’t use this shit and my kids are not allowed to use this shit.”
Another prominent voice in this chorus belongs to venture capitalist Roger McNamee, an early Facebook funder and erstwhile mentor to Mark Zuckerberg. In a New York Times op-ed titled “A Brief History of How Your Privacy Was Stolen,” McNamee decried the tech sector’s embrace of “business models based on surveillance and manipulation.” According to McNamee, there are two major causes at play. One is that technological innovation has removed prior constraints on data gathering and processing, making it easier than ever to push the norms of decency in business. The other is a recent cultural shift in Silicon Valley, whereby company leaders and investors have moved away from ethical capitalism to pursue aggressive, greedy, and monopolistic business practices. As Google and Facebook raked in the profits, ethics were thrown out the window, and consumer surveillance began to flourish in more industries across the economy.
For McNamee, these shifts have “transformed capitalism” to such an unpleasant degree that it is now necessary for the government to step in. Although he rightly calls attention to the growing harms of commercial surveillance, McNamee’s account rests on the idea that the marriage between technology and capitalism has only recently become dysfunctional, and now that things have gone off the rails, external political forces must be marshaled to bring things back into proper alignment. In this telling, the techlash represents an aberration from a benevolent technocapitalism that normally functions largely outside of politics. The state enters into the picture only as a last resort, the bumbling sheriff summoned to rein in the excesses of power-hungry villains like Mark Zuckerberg, Peter Thiel, and the “PayPal mafia.”
To put it bluntly, these accounts are wrong. Surveillance advertising has never existed outside of politics. On the contrary, like every other communications system in existence, the Internet’s prevailing economic structure has been heavily shaped by public policy. Perhaps the most important policies are those created by what sociologist Paul Starr calls “constitutive choices,” the formative decisions that have structuring effects on subsequent media system development. Various forms of legislation, regulation, and government subsidy were foundational to the establishment of U.S. commercial broadcasting in the 1920s and 1930s, for example. It was the Federal Radio Commission, at the behest of Congress and the executive branch, that “cleared the dial” of many public and nonprofit broadcasters to give exclusive licenses (for free) to some of the nation’s most powerful technology companies, as Tim Wu has noted. From that point forward, broadcasting proceeded almost entirely on advertising-supported basis.
In the absence of public activism, the state has reliably made media policy in service of private sector interests, but no political outcome is ever guaranteed. Commercial radio was highly contested, as evidenced not only by organized citizen opposition but also by the decisions of peer nations like Great Britain to reject advertising and establish alternative public models. Ideally, democratic political institutions should provide countervailing levers of control over media development, though U.S. history shows a mixed track record in that regard. Nevertheless, even in the face of strong structural inertia, there are always real political choices to be made, especially during a platform’s formative years. The Internet was no exception.
For surveillance advertising, two moments of policy making stand out as particularly important. The first was the overarching decision that the Internet would be privatized and commercialized. Beginning in the late 1980s, federal policy makers worked closely with a range of commercial interests to establish what was framed as a “non-regulatory, market oriented” approach to Internet policy. The guiding principle was that the private sector would lead Internet system development, and the government’s primary role was to facilitate private profits. This left a regulatory vacuum around consumer data collection and gave the nascent online advertising industry free rein to build business models around hidden surveillance.
The latter moment occurred at the end of the 1990s, when the progenitors of today’s surveillance advertising behemoths faced the very first public activism for Internet privacy. Responding to increasingly invasive data collection practices, a coalition of advocacy groups mounted a campaign to convince legislators to reverse the government’s laissez-faire approach to Internet privacy. Despite the public concern, Congress and the White House prioritized the growth of the commercial Internet over serious consideration of the ramifications of a surveillance-based digital economy. Though largely overshadowed by the web’s mythos of “friction-free” markets and entrepreneurialism, the regulatory foundations of modern commercial Internet surveillance were forged in this period through negotiations over privacy policies, user consent, data merging, and industry self-regulation, which became the baseline policy framework for online data collection in the twenty-first century. The neoliberal consensus was that commercial surveillance on the Internet was a business like any other: best to let the market sort out the details. Both of these moments reflect the increasingly anti-democratic nature of communications policy-making in the United States. As Patricia Aufderheide notes, “the public is endlessly invoked in communications policy, but rarely is it consulted.”
McNamee’s framing of Silicon Valley’s moral failure hews closely to Zuboff’s influential theory of “surveillance capitalism.” Zuboff’s premise is that the relationship between technology, business, and consumer data under surveillance capitalism represents a marked deviation from prior modes of economic production. For Zuboff, capitalism has gone “rogue.” Much like diagnoses that ignore the net’s political foundations, this position disregards historical continuities to focus only on what is new. Although the magnitude of contemporary commercial surveillance is certainly mind-bending, the system reflects enduring structural imperatives within a capitalist political economy dependent on perpetual growth. As Douglas Rushkoff notes, when we point to “corruption” as the source of technology woes, “we are implying that something initially pure has been corrupted by some bad actors.” Concentrating on bad actors often means ignoring the political economic forces that have incentivized surveillance advertising and so fabulously rewarded its most successful practitioners.
Neil Postman once proposed that the first question to ask about a new technology must be: “What is the problem to which this technology is a solution?” Adding another layer of inquiry, Raymond Williams argued that “the key question about a technological response to a need is less a question about the need itself than about its place in an existing social situation.” In other words, what matters is not only who shapes technology and for what purpose, but also the social position of both the shapers and the purposes. Surveillance advertising has been developed as a tool to help marketers understand, predict, and control consumer behavior. It is a technological response to a concrete business problem: How do we sell more stuff as efficiently as possible? But surveillance advertising also reflects a broader set of deeply rooted social needs within the capitalist political economy. To answer both Postman and Williams: history shows that the structural problem surveillance advertising is meant to address is the accumulation of capital, arguably among the most pressing needs of the most powerful people in our society for quite some time.
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Historical analysis is foundational to a political economy of surveillance advertising because it denaturalizes prevailing institutional arrangements and social relations, showing the structural forces and human political agency at work. Internet advertising was precipitated by a commercial mass media system that, over the course of the twentieth century, came to play a central role in the global economy, but its roots stretch back further. Rather than a break from the past, supercharged online surveillance is better understood as an acceleration of capitalism’s longstanding imperative to produce consumer demand.
Although advertising is sometimes discussed as a single industry, it is really a nexus of business activity across many institutions and economic sectors. Companies of all kinds spend money on advertising to reach new and existing customers: they hire ad agencies, public relations firms, and many variations in between to create and execute strategic communication campaigns on their behalf. Most of this money flows through various kinds of media outlets, which earn revenue by selling access to their audiences. John Sinclair summarizes all of this as an “assemblage of interests we can think of as the ‘manufacturing/marketing/media complex.’”
It is important to appreciate the special role played by marketers, in particular. Although advertising puts a lot of coins in a lot of pockets, the purse is largely controlled by companies looking for ways to drive consumption. Still, the marketing complex is a roomy concept that allows for internal divisions, disagreements, and competition among its participants, all of which are held together by a basic need to continuously enlarge the social canvas on which advertising takes place.
The marketing complex began to coalesce in the late 1800s as the U.S. economy became increasingly organized around mass production and consumption. Manufacturers, retailers, advertising agencies, and media outlets found common interest in building out national consumer markets. The need to rationalize and professionalize the creation of consumer demand within an increasingly productive and centralized corporate capitalism precipitated what historian Daniel Pope calls “the making of modern advertising.” In increasingly concentrated markets, brand advertising became a way for big companies to compete with each other without lowering prices and to erect barriers to keep out potential new competitors.
Although modern ad campaigns took a variety of forms, mass marketing became the prevailing strategy, in alignment with the affordances of industrial printing and broadcasting technologies. Mass-produced goods in the same product category were often more or less equivalent, so advertising was used to create product differentiation, or what Thorstein Veblen called the “production of saleable appearances.” Over time, the tone of advertisements shifted from the descriptive nature of early print ads to the more affective character of brand marketing, but the core component of mass media advertising was its reach. Beginning with turn-of-the-century large-circulation newspapers and magazines, and intensifying during the network broadcasting era, scale was king.
Some degree of market segmentation entered the picture with commercial radio and specialty magazines, but only according to rough estimates of consumer demographics. Gathering and processing detailed information about consumers was for the most part an expensive and time- consuming process. Large swaths of the media sector became dependent on advertising revenue, and on the whole, business was good. Advertising expenditures settled in to account for between 2 and 3 percent of U.S. GDP. Media empires were created as advertising became the “leading edge” of the “global advance of consumerism,” serving the ideological and market-building needs of a profitable and astonishingly productive industrial economy.
Things began to shift as the U.S. economy slumped into what Robert Brenner calls the “long downturn,” a worldwide period of debilitating stagnation that began in the 1970s and dragged into the early 1990s. To mitigate what became a crisis of profitability, businesses began to reorganize systems of production, finance, and consumption on a global basis. This was a complex and uneven process that hinged on investment in heretofore publicly funded information and communication technologies, from computers to telecommunications networks. Dan Schiller has shown that while commodification of information has always been involved in capital accumulation, the last fifty years have seen information and communication technologies become a vital pole of growth for an emergent “digital capitalism.” The political mobilization of private sector interests played a significant role in these changes. In the United States and elsewhere, policies of privatization, deregulation, and “free trade” achieved mainstream orthodoxy under the moniker of neoliberalism.
Compelled by a changing political economy, the marketing complex embarked on its own lurching reconfiguration around information and communication technologies and the systematic integration of consumer data into advertising practices. In the 1980s ad agencies became increasingly interested in using computer databases to target specific audience demographics through tactical ad placement across media channels. “Customer relationship marketing” strategies such as loyalty programs used data to establish lasting connections with high-value consumers while excluding those deemed undesirable. Though it had been around for many years, consumer surveillance was now seeping into advertising’s mainstream. During this period, audience fragmentation and the shifting demographics of the U.S. population put national mass advertising under increasing strain. In 1965 an ad campaign could reach 80 percent of eighteen- to forty-nine-year-old women by purchasing three television commercials; a few decades later, it required nearly a hundred prime-time spots to achieve the same result. For major marketers, these trends threatened a loss of control over a changing media system that had long been dictated by their interests.
By the 1990s, the marketing complex was keenly attuned to the emergence of a new crop of interactive media that included the World Wide Web. The web was simultaneously a danger and opportunity, at once conceivable as advertising’s next frontier and its mortal wound. Among the greatest threats was that interactivity would provide individuals with new kinds of media autonomy—perhaps even the power to excise advertising altogether. The U.S. remained the unquestioned stronghold of global consumer capitalism, but such a position requires constant maintenance through advertising-based media and communications systems designed to stoke demand and foster consumer subjectivities. To turn threat into opportunity, the marketing complex needed the support of the federal government, as well as a push from the investor class of Silicon Valley. The politicians made the rules that governed the web’s commercialization, while the venture capitalists, chasing monopoly profits, supplied the cash to build out the first generation of surveillance advertising companies.
Fueled by speculative capital, dotcom upstarts like DoubleClick, CMGI, and Yahoo became the progenitors of today’s surveillance advertising behemoths. Billions of banner ads washed over the formerly non-commercial Internet like a plague. When it became apparent that hardly anyone clicked on these obtrusive ads, greater personalization was put forward as a solution for reining in the chaos of an interactive medium that gave consumers too much control over their media experiences. Of course, efforts to make ads “relevant” hinged on two things: the technical capacity to collect, exchange, and monetize consumer data at unprecedented scale, and the freedom to do so unhindered by regulatory safeguards around such outdated notions as privacy.
By the end of the 1990s, a sociotechnical infrastructure for surveillance advertising had been established. While the financial mania of the dotcom bubble did not last, the business practices, technical capacities, and accommodating political framework for surveillance advertising endured. When Google and Facebook went on to build advertising empires in the intervening years, they relied on more than just good vibes and heaps of venture capital. They also banked on the political premise that data collection would be pervasive by default, that they would be free to build the tools of mass surveillance and targeted persuasion without being held to public account.
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What is to be done? Public policy is among only levers of power capable of tempering the relentless drive for consumer surveillance. It is, after all, the exact set of tools that private and public actors used to set up the legal foundations of surveillance advertising in the first place. When Google bought DoubleClick in 2007, the merger had to be cleared by the Federal Trade Commission (FTC). After an eight-month investigation into potential competitive ramifications, the deal was permitted by a 4-1 vote. Although privacy advocates filed objections with the Commission, concerns about consumer surveillance were not formally factored into the deliberations.
Explaining the exclusion, the FTC noted that privacy concerns were “not unique to Google and DoubleClick,” but rather “extend to the entire online advertising marketplace.” In other words, the FTC argued that consumer monitoring was already so well established that it did not make much sense to question the institutional build-up of surveillance capacity that would result from the merger. Equally significant, the commissioners admitted that even if they had wanted to consider data collection and privacy issues as part of the merger review, they simply had little jurisdiction over such matters. Consumer surveillance on the Internet is industry’s domain; the private sector is in charge. This is the political legacy of the dotcom era.
The surveillance advertising industry remains acutely aware of the importance of public policy. Google and Meta have built empires on the proposition that the founding political principle of the Internet—private sector leadership—can endure any “techlash” with enough lobbying and public relations maneuvering. Testifying before Congress in 2018, Mark Zuckerberg told lawmakers he was “not opposed to regulation,” as long as it was the “right regulation.”
It is crystal clear to anyone paying attention that industry self-regulation and the “notice and choice” privacy paradigm are utter failures. When pressed, surveillance advertising platforms will continue to roll out transparency tweaks, privacy dashboards, and other changes that fiddle at the margins of their enterprises. They will curb some of the more egregious uses of their systems, while their public relations teams applaud a job well done. What these companies will not do, however, is anything that might undermine their core business model of unaccountable surveillance. That is, unless democratic society gives them no choice.
The only solution to a problem of this magnitude is a political program that confronts the surveillance advertising business model head on. There is no easy path forward, but public pressure may have finally spurred U.S. policymakers to action as legislators consider a range of privacy, data security, and antitrust interventions into the formerly untouchable realm of Big Tech. One such effort is the Banning Surveillance Advertising Act, introduced in the House of Representatives this January. It is unique among legislative proposals in that it focuses on the underlying business model, rather than specific privacy harms.
We now know what twenty-five years of neoliberal Internet governance looks like. We are living with the outcome of “letting the private sector lead.” It is past time for an alternative political vision for the Internet—one that includes greater democratic accountability, more equitable distribution of power, and far less subservience to the demands of the market.
(Note: This essay is adapted from the author’s recent book ‘Profit over Privacy: How Surveillance Advertising Conquered the Internet’, published by the University of Minnesota Press.)
(Matthew Crain is Associate Professor of Media and Communication at Miami University. Courtesy: Boston Review, a political and literary forum—a public space for discussion of ideas and culture.)
