> Advertising is not zero-sum. It is a money multiplier.
You misunderstand zero sum here. Gas stations can’t grow total gas sales making the selling of gas zero sum, but they very much provide a useful function in aggregate.
Advertising is going to exist with and without tracking individual users, the difference is simply relative value of undifferentiated content. Selling camping supplies on an outdoor website is targeting, but linking user’s history allows anyone to get a cut of premium revenue even if it’s lowest common denominator crap. But remove tracking of users and specialty content like local news becomes a lot more valuable and clickbait far less, a major public good.
> we start from the position that a new business creates net new value in the economy (on top of existing value). This is an economic maxim that must be true otherwise our GDP would never grow from 1770 standards.
I understand the point you are trying to make but existing companies also evolve their offerings over time. Nintendo in 1889 wasn’t selling video games.
I think you missed the forest for the trees. I will make it very clear. The advertising business is a growth vector. It grows with the size of the economy. Singular industries may rise and fall (ex. ads for riding crops) but in aggregate, advertising always continues to grow. Zero sum means explicitly that the total pie stays the same, which advertising is not. It forces the pie to grow. And that's for a straightforward reason, because advertising is an arms race. A company can't afford to drop out, can't afford to fall behind.
> Advertising is going to exist with and without tracking individual users, the difference is simply relative value of undifferentiated content.
So what you mean to say is that targeted advertising is the same as mass advertising, that there's no benefit, perceived or otherwise, of targeting users. Well, I'm afraid you're very wrong. Both buyers and sellers of advertising love targeted advertising. For buyers, it makes the most efficient use of their budget allocation, and for sellers, it allows them to to take maximum advantage of user self-segmentation. The analogy of indiscriminate bombing being superseded by precision munitions is an apt one. There's no going back at this point.
Regulations will only distort the market further. The platforms will make the fines the cost of doing business, and pass them onto the buyers. The buyers, in turn, will pass that cost along to consumers in the form of higher prices. Every company will continue to pay for advertising because they can't afford not to. And so it will continue. All the fines will do is concentrate more wealth into the platforms and the government. And that's exactly what's happening in the EU with advent of GDPR.
Your own words demonstrate the zero sum nature. During COVID YouTube had a huge spike in viewers as people stayed at home, but rates absolutely tanked because the value is defined between advertising budgets and available distribution not some inherent property of a viewer seeing an advertisement.
This is just like how gas in aggregate grows with the economy/oil prices not the efficiency of gas stations. It’s these external factors which make them zero sum.
> So what you mean to say is that targeted advertising is the same as mass advertising, that there's no benefit, perceived or otherwise, of targeting users.
No, I am saying tracking users is one of many methods to target users. The value of individual means of advertising varies, but the ability to target users doesn’t disappear when you ban tracking users. What changes is how valuable individual options are not the total value of all methods of advertising combined.
> There's no going back at this point.
Things often seem more stable than they actually are. Banning tracking is a tiny blimp compared to the kinds of changes you see after major Supreme Court decisions let alone major events like revolutions.
> in aggregate, advertising always continues to grow.
Yes, like a cancer.
> Both buyers and sellers of advertising love targeted advertising.
Of course they do. But that's all at the expense of everyone who isn't in the business of buying and selling advertising.
> There's no going back at this point.
We'll see. I cannot accept that being forced to live in a massive surveillance state is an inevitability.
> Regulations will only distort the market further.
Bad regulations will. However, the appearance of ubiquitous spying by marketing companies are also heavily distorting the market. The introduction of rules to correct the serious misbehavior of these companies has the potential to correct, or at least reduce, the harm.
At this point, it's pretty clear that there is no other mechanism available to us. Simply resigning ourselves to bending over and taking it is not acceptable.
You misunderstand zero sum here. Gas stations can’t grow total gas sales making the selling of gas zero sum, but they very much provide a useful function in aggregate.
Advertising is going to exist with and without tracking individual users, the difference is simply relative value of undifferentiated content. Selling camping supplies on an outdoor website is targeting, but linking user’s history allows anyone to get a cut of premium revenue even if it’s lowest common denominator crap. But remove tracking of users and specialty content like local news becomes a lot more valuable and clickbait far less, a major public good.
> we start from the position that a new business creates net new value in the economy (on top of existing value). This is an economic maxim that must be true otherwise our GDP would never grow from 1770 standards.
I understand the point you are trying to make but existing companies also evolve their offerings over time. Nintendo in 1889 wasn’t selling video games.