How Google and Facebook Turned You Into a Product | Chaos Lever

[00:00:00.06]
Chris: I think we all know that you have.

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Ned: That I've purchased a kilt. I have not. It's a debate. It's a constant debate. Would I look good in a kilt? I mean, the answer is obviously yes, but where would I wear a kilt?

[00:00:18.11]
Chris: It goes around your waist, silly.

[00:00:29.03]
Ned: Hello, alleged human, and welcome to the Chaos Lover podcast. My name is Ned and I'm definitely not a robot. I am a real human person who likes to wear kilts because of the breeze. It's the breeze, Chris. That's what I enjoy feeling on parts. With me is Chris, who also has parts. Hi, Chris.

[00:00:48.22]
Chris: Every single word you say is making this worse.

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Ned: How deeply uncomfortable can I make you that?

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Chris: The only thing that is a blessing is how fast you're talking, because that means it's going to be over soon.

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Ned: Oh, my God. So I like. I don't. We. We kind of have to dive right into things because I'm on a bit of a time crunch, but also I got ranty and I think I hit 10 pages. Did I hit 10 pages? Yeah, you know I did.

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Chris: You got to settle down, Frank. We've talked about this.

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Ned: We have. What have we talked about recently?

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Chris: Kilts. That's the only thing I can think of.

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Ned: And the breezy bits underneath.

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Chris: And we're uncomfortable again.

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Ned: I'm just trying to stay on message here.

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Chris: We should talk about the thing.

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Ned: I know. For the last two weeks we have talked about how you can remove yourself from the Fang ecosystem. And during that time we also covered a story where a federal district court found Google guilty of being a monopoly in two violations, I think was what we covered. Now, I mentioned that the judgment for this particular finding was 115 pages long, and it documented the rise of Google's supremacy in the advertising market and also included a detailed explanation of how their tech works. I highly recommend reading it, and I don't say that about most judgments. Let's be honest. Let's be honest, Chris. Fine, don't be honest. You know, you love reading judgments, too.

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Chris: I'm not.

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Ned: We love making them. Since the modern Internet essentially relies on advertising for its very existence, Unfortunately, I thought we could take a moment to see how we got here and how things work today. If you're trying to separate yourself from the faang world, avoiding and blocking ads is part and parcel of what you'll need to do to protect your privacy and probably also your sanity. I had to look up a recipe today, Chris, and that is just a window into advertising. Hell.

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Chris: Yeah, it's not great.

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Ned: No, it's worse on mobile too. Distinctly worse.

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Chris: Well, that could just be. That could just be the tagline for the Internet. The Internet. It's worse on mobile.

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Ned: Distinctly worse. That would be in one of those like exploding star things to the side now. Distinctly worse. It didn't have to be this way. It really didn't. The early Internet was mostly ad free. In fact, advertising was considered gross and off putting for people of a certain age. It still maintains a patina of disingenuousness. And I would like to point out that I spelled disingenuous correctly on the first try.

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Chris: But you've had three chances to say it out loud and it's.

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Ned: I still can't nail it, but I can spell it. And honestly, that's what's important to pimp ads and companies on your website is akin to selling out. Something that my fellow Gen Xers have gleefully done in the last 20 years under the guise of buying in. I'm not selling out, Chris, I'm buying in. I'll spare you my self deprecating protestations and elaborative justifications for becoming a corporate shill. It's what I had to do. I don't have any corporate tattoos yet though.

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Chris: That we know of.

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Ned: I would tell you if I did. The first spam message was delivered in 1978 to promote a new model of a DEC system to an email group. That group had about 300 people in it because that was the size of the Internet. The message was roundly criticized and its sender, Gary Thurek, along with DEC were chastised and put on notice. That was before the World Wide Web, but I hope you can see where people's attitudes were at the time. Email and the Internet were supposed to be places of academic inquiry, sharing of ideas and like information. Just wants to be free, man.

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Chris: And we don't need to encrypt anything.

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Ned: No. God no. Why would you want things to be secret or secure? We're all here to just like bask in each other's glowing aura, dude. Yeah, it was all hippie dippy garbage to be sure. But we saw what happened to most of those counterculture hippies, right? They. They all went to go work on Wall Street. Anyway, thanks to Dim Burn Dim. Oh my God, I'm so sorry Tim. Thanks to Tim Berners Lee, Not Dim, Very Bright and others, the World Wide Web was born and digital publications started to appear. And just like their brethren in the print media, advertising was a natural extension of their business model. The first banner ad was published on Wired.com's square site and it was from AT&T. And it was a simple graphic that said, have you ever clicked your mouse right here? You will. And people did with a 44% click through rate. What a bunch of guileless rubes we.

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Chris: All were and always will be.

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Ned: Side note, 44% is a click through rate that advertisers would kill for today. Like 0.44% is good. But that was then, this is now. The technology used to publish that ad was extremely rudimentary. We're talking static HTML. This is before the world of JavaScript, CMS and dynamic content. If you wanted to publish an ad on a website, the process was very similar to how you would do it with print media. You worked with the publisher, you planned out how your ad would appear and where you would provide the copy and the content, and then the website published the ad at the agreed upon time on the agreed upon page. That was it. Advertising had not yet groked all that was possible in the new media environment, but they would, God help us all. When it comes to advertising in print media, or just like advertising before the Internet, there's not much in the way of tracking data and ad rates are set on things like circulation and ad size. Think about the feedback loop that an advertiser gets when they put a commercial on television or on the radio or in traditional print media. How do they know how many people.

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Chris: It actually reached the extremely accurate Nielsen ratings?

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Ned: Obviously, obviously. How do they know if the people coming to their store or buying their product saw the advertisement?

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Chris: They're required by law to say, I saw the advertisement, therefore I showed up at the store.

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Ned: How do you attribute your next quarter sales to the advertising you did before? I mean, like the answer to all of these is you have no freaking clue, right? Marketing was just a big guessing game and you kind of hoped you were close. The Internet changed all of that. It provided a massive opportunity for publishers and advertisers to collect as much data as possible and see who was clicking on those ads and what they did afterwards. So I don't know if everybody understands just how much information is collected about you when, when you browse the Internet.

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Chris: I was thinking about this actually. I mean, you're gonna tell us the answer. The answer is obviously way too much. But this falls firmly into the category of all of these old style, very simplistic protocols that were just wide open, no security, no protections. Information wants to be free, man.

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Ned: It does. And you should just offer up information to make your experience Better, because that's what you want. So like when you connect to a website and you start accessing data, making requests, it's not a one way conversation. Your browser by default provides a significant amount of information to the web server it connects to kind of information. Let's see, at a minimum, you've got your source IP address, which can be used to determine your approximate location. It also includes in the user agent string, your browser type, your operating system, and probably the device type. So now they know all that. It also includes the refer URL, which shows where you came from to get to this website, as well as any cookies that are affiliated with the site you're visiting. It may also include your screen resolution, the browser window size, your time zone, your connection type, the amount of device memory you have, your cpu, that's just what your browser is sending to the server. Here you go. The server also knows that when you clicked on an ad, which page you clicked from and what you did after you clicked on the ad.

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Ned: In fact, that's true of any link that you click on on that website. Doesn't have to be an ad, but if it is an ad, they also know, did you make a purchase based on that ad? Did you read more pages after going from that link? And this was the rise of first party and third party cookies. But I'm just going to pause there. Is that a preposterous amount of information.

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Chris: Excessive?

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Ned: Yeah. Do you think your browser should just be giving all that information away for free?

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Chris: No.

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Ned: No. And yet it does. It emanates information like we breathe out carbon dioxide, and it's just as hazardous. Cookies, for those who don't know, are these little files a browser puts on your system to track your browsing. Hmm, that sounds ominous. But cookies are actually an essential part of how the web works. Web servers have a memory like a goldfish, which is to say, essentially none. And like, don't come at me. Ichthyologists who I know listen to this podcast. I know that's not actually true. Goldfish can retain things for months and sometimes years, if they live that long. Whatever. You don't really have a conversation with a web server as much as you have a series of requests and responses that may or may not be answered by the same actual system. So to help the server glean some context of who you are and what you've been up to prior to this request, a cookie is added to your session to hold things like authentication information and a unique identifier for the session. That part is pretty innocuous. Makes your web browsing experience better. The problem is that being able to track your browser activity is a superpower that websites and third party advertisers simply cannot recommend resist.

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Ned: Fortunately, you can kind of block them, sort of maybe depending what browser you use. If you stare at it. Right.

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Chris: If you configure it. Right.

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Ned: Yeah.

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Chris: Because this is the thing, you're right. I mean the browser tells you, or I'm sorry, the browser tells the server absolutely everything that it asks for, which is a huge amount. I'll dig up a link and put it in the show notes. There are plenty of examples. The most famous one is probably a page people have heard of called PHP info.

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Ned: Yep.

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Chris: It's illuminating to go to one of these pages and see all this information just, just, just, just dumped out there.

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Ned: And it's every request you send as they log in.

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Chris: As they say in Germany.

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Ned: Mm. If you compare this to the paucity of information from a print ad, advertisers were presented with a digital gold rush of data to mine through and mine. They did anything and everything they could scrape about. Your sessions would eventually be used to produce hyper targeted ads that are bid on a microsecond interval as the next page loads. But I'm getting ahead of myself. We're still in the late 90s and I'm listening to Pearl Jam. Well, maybe not Pearl Jam. At that point. Stone Temple pilots. Sure. Advertising had just started taking on new forms that were enabled by the medium of the Internet. The first pop ups came up in the late 90s through the rise of JavaScript. Side note, JavaScript is simultaneously the best and worst thing to ever happen to the Internet. The modern web is 100% reliant on JavaScript and it also powers the worst abuses of the platform since Flash didn't have time to get into Flash. But if you know, you know. So a website was no longer a static bundle of HTML code that was delivered consistently to every client. The web had become dynamic, powered by two technologies, Server side and client side processing.

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Ned: Server side processing is when the HTML you're delivered is rendered on the fly using using a combination of a static HTML template and code behind pages. When a web request comes in, the web server parses the request and renders the page in real time using code like asp, which is active server pages, or php, which you just mentioned. And it also queries data sources like databases or key value stores to return a response. Now that puts a lot of load on the server side. Servers are expensive, so maybe we can make the browser do more work. That's what client side processing is. It relies on your browser to render portions of the website and it's typically powered through the use of JavaScript. The web server returns HTML, which includes a bunch of JavaScript embedded or linked on the page, and your browser does the rest. The reason I bring this up is because early banner ads relied on server side processing. Oh look, a request for an article from NewsBomb.com just came in. Quick, Mr. ASP, which banner ads should be shown with this article? Jam's Hams and Bob's Memory Shack. Perfect. Insert those ads from the library and deliver the page.

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Ned: That's basically how it worked.

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Chris: And also, those were probably real ads.

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Ned: God, I hope so. I would love to buy some hams from jamshams. In the era of banner ads, the actual ad content was still being delivered by the publisher. They were, you know, the person actually running the website. They were working with an ad broker of some kind who would help connect advertisers to publishers. But it was still the publisher who was actually hosting and delivering the content. DoubleClick was one of the biggest and most prominent of the ad brokers, facilitating that. We'll come back to them. They helped advertisers track how ads were doing and streamline the publishing process for the publishers. Those advertisers wanted data on their ads, and not every publisher was up to the task of delivering that information. So Double Click would assist them in doing that eventually by embedding their own code on the website. Once client side tech became a reality, this whole way of delivering ads shifted rapidly, and the actual rendering of the ad portions of a page could be farmed out to other companies, no longer the publisher's responsibility. It also meant that the ad content could be dynamically sold. An advertiser and a publisher didn't have to sit down around a table, have like six martinis and figure out what they wanted to publish in the next month.

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Ned: Instead, an ad broker would sell ad space to advertisers on demand, matching ad content with relevant websites. And this is where we get into the technical machinery behind ads. Banner ads, they still exist. You still see them. They're rendered differently now. Traditional banner ads declined in relevance steeply, and for our purposes, they basically no longer exist. But there was a much more valuable ad property on the horizon, and that is web search. When is the best time to capture a new customer, Chris?

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Chris: Never. Because we don't want your. We don't want your widgets. Go home. Read a book. Stop it.

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Ned: I would say it's when you know that they're searching for the thing that you are selling or that. I mean, you can put a banner ad for Jam's ham on a few recipe websites and just hope that the person browsing on that recipe site at the time is looking for a ham recipe and needs to buy your delicious smoked pork products.

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Chris: I'm not saying that subliminal advertising works, but I know what I'm having for dinner. Carry on.

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Ned: If I have a pork loin in the smoker right now, it has no bearing on the fact that is my example today. What would be even better is if you could present your succulent loins to to a potential customer. I started the whole kilt joke knowing that this was in here. Should I say succulent loins again? Oh, every time. It's just so worth it, listeners. If you don't know, we also publish this as a YouTube video.

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Chris: No, we don't.

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Ned: It might be worth jumping over just to see Chris's face. Minute 21 Anyway, present your succulent loins to a potential customer. When they search for ham recipes or pork loin pro tips or any other similar keyword you already know they're searching for something you have and you want to be at the top of that search list. This is how Google makes 75% of their money. And it led to the creation of new models for selling ads and publishing them. There are roughly four parties involved. We got our companies that want to advertise things. They have ads to sell. We have our advertising agencies who actually develop the ads and broker the relationship between the companies and the publishers. You have ad technology companies that actually do the delivery of ads. And you have publishers who host the ads on their website. They have ad space to sell. Each of these parties have their own incentives. Companies wishing to advertise want a return on their investment. If they spend $100,000 on ads. They want to know the click through rate and the conversion rate for those ads. Who's buying our stuff? Because now they can know that ad agencies need to create compelling ads with good click through rates, focusing on proper placement and delivering metrics back to the customer.

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Ned: Here's your click through rate. You sold $10 million of ham hocks. That's a lot of ham hocks. Hmm. I don't know what a ham hock is actually. I don't want to know. Publishers want to sell their ad space at a reasonable rate so they can continue to function as a website. Because most websites are supported by advertising, ad technology companies are there to facilitate all parts of this transaction. And their incentive is to make as much money off you as. I mean as much money off the interaction as possible. You know who's missing on this list of concerned parties? You. The most cynical reading puts you at the absolute bottom of the pile. I mean, sure, you're important as you provide the money greasing the wheels of this advertising apparatus, but you aren't important as a customer because you aren't the customer. You're the eyeballs and the mouse click and a wallet with money to be plundered. Enter the pirates of Silicon Valley, Google and Facebook, eh? Pirates plundering you like that. I really put it together there. I feel good about that.

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Chris: This is you being in a hurry.

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Ned: Oh, I am trying my man. The way an ad is delivered to you on a website or a search engine is actually pretty fascinating and it's an extraordinary feat of technology. Shame it's a wasted on something that is so petty and banal. When you load a website or you get a search result, there is a flurry of activity going on in the background that you are mostly unaware of. On the webpage is code connecting it to a publisher ad server. This ad server lets all connected advertisers know that there's a potential sale available along with details about the impression that is for sale. Yes, they're called impressions. Doesn't that make you feel important? The information packaged in that notification is all of that personal data that was collected by your browser and the cookies. The services bidding for the impression are called ad exchanges and they take a look at the impression and match it to the advertisers looking to publish an ad. Usually highest bidder wins with some caveats and the ad is delivered to the page. That seems like a lot of stuff that's happening. All of it happens in less than a second and it happens millions of times a second all across the world wide web.

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Ned: Just think about that. Every time you load a webpage that has advertising on it, this is happening. There is a real time auction of your attention happening every time you do a Google search, every time you load a website. With ad servers, all companies in the ad tech stack charge fees for doing the processing and. And you get paid nothing. Thoughts, Chris? Anything.

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Chris: I mean this is why we have ad blockers.

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Ned: That is true. Ad blockers can help with this because as I mentioned before, most of these ad servers are engaged using JavaScript, using scripts that are embedded on the websites. So if you have an ad blocker that blocks those scripts from running, then maybe it's not happening. Unless they farm it out to the back end of the server, in which case it's happening anyway.

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Chris: Yeah, but nobody does that because they would rather waste your computer CPU cycles instead of their own.

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Ned: Well, when we get to Facebook, we'll find out they do both. So the big brouhaha over Google's monopoly comes down to how they're integrated into this whole ad tech stack. Google runs a publisher ad server called DFP or DoubleClick for Publishers. Remember DoubleClick from earlier? Google bought them. Of course, they and everybody was just fine with that. Google also runs an ad exchange called adx, and that connects advertisers and publishers. Google also runs the demand side of the platform where advertisers go to manage their digital advertising, which is called DV360, but it used to be called DoubleClick bid manager. So to recap, Google runs a service that manages ads for sale and a service that manages ad space for sale and a service that matches the two together. That seems fine. Oh, potential for abuse there. Like I said, I'm not going to dig into the actual case, since you can read lots of other articles and news about that, but the TLDR is that Google, unsurprisingly, abused its prominence in each of these areas to force customers to prefer their services over other companies, engaging in unfair competition and harming consumers. They're a monopoly.

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Ned: They're a convicted monopoly. So I can say that without the.

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Chris: Alleged we proved it and everything.

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Ned: Yay. At the same time, Google was building a moat around advertising in search and on random websites. Another type of advertising juggernaut was building, and that is social media. Unlike generic websites in search, most social media platforms handle their own advertising internally. They aren't farming things out to Google's DFP and adx. Instead, they run their own internal bidding platform, and they already know about the ad space inventory that they have for sale. Even better, these social media companies know a metric shit ton about you, and they are only too happy to abuse that knowledge for obscene profits. Take Facebook. No, seriously, take Facebook. Jack them into the sun. Please.

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Chris: Take my wife, please.

[00:27:59.12]
Ned: As a consumer of Facebook, you give them a ridiculous amount of information about yourself voluntarily. If your browser data is a gold mine to the average website, your Facebook profile is a gold mine on top of a diamond mine, on top of an emerald mine, red wrapped in a platinum mine. Now, it's worse than that. It's like the vault Scrooge McDuck would swim through. That's your data in doubloons and that loon is swimming through named Mark Zuckerberg. And for those who are Interested, I had ChatGPT make me an image of Scrooge McDuck as Mark Zuckerberg. And it's amazing. And he's wearing a kilt. Tying it all together, Chris. Really am. I'll put that on the video. Your age, gender, marital status, family connections, political leanings, hobbies, friends, work history, current mood, mental health, physical health, etc. Anything you have ever uploaded, posted or said within earshot of Facebook that is being logged, cataloged and dissected and sold as ads back to you. And that's true of every major social media site. Twitter, Instagram, TikTok, LinkedIn, Snap, YouTube. All of them are free. Which means you are the product. I need to take a breath. I didn't realize how upset this was going to make me until I started writing it and I was like, this is just awful.

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Chris: Yeah, it's pretty bad.

[00:29:33.14]
Ned: Yeah. Okay, so how to Ad Sales Work on something like Facebook if you're a potential advertiser, you define your objective budget, assets and target audience and you can be as specific as you want about that audience Jams Ham they're launching a new smoky butt roast. So they want to target 30 to 45 year old males in the US south who have shown an interest in barbecue and smoking, eat out three or more times a week and are at risk of hypertension or diabetes because marketing research has shown a strong correlation between smoked meats and diabetes. And that's not even as targeted as you can get. I'm not kidding. Remember Chris, we discussed how Facebook was targeting girls, teenage girls on Instagram that were deleting their selfies minutes after posting it and selling that to advertisers who were promoting all kinds of beauty aids and stuff.

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Chris: You forgot the part where they were celebrating their victory.

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Ned: Oh yes, they were very proud of themselves. Read Careless people, but you're going to be angry when you're done Once you, as the advertiser have set up your campaign. Facebook holds real time auctions for ad space on their platforms. The bids are based on how much you're willing to pay, the estimated action rate, and the ad quality score. Those are combined as the total value for an ad and the ad with the highest total value wins. Facebook because they don't want you to ever leave their platform ever, ever, ever, ever favors engagement overall. So if your ad has a poor quality score or a low action rate, meaning people don't like it, your total value Drops and you'll have to increase your bid to compensate if you actually want your ad to be shown. Now you might think that Facebook's tracking happens only within the walled garden of Facebook on their app and their website. That's adorable. He's so cute. When it comes to the browser, as long as you're logged into Facebook, meaning there's a cookie set on your browser, they will track you all over the web through the Facebook Pixel or the Conversions API.

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Ned: Now I think we talked about this last week, maybe the week before we touched on this. For those who didn't listen, the Facebook Pixel runs as a JavaScript applet on any third party website that wants it and it sends data about your interactions with the website back to Facebook. This can help the website get a fuller picture of their customers interactions and Facebook loves it because or data. Customers don't like it though and a lot of people started blocking the script. So instead Facebook launched the Conversions API which is integrated at the web server level. This is server side, which means you can't block it. Isn't that nice?

[00:32:39.05]
Chris: No.

[00:32:40.06]
Ned: No it's not. The whole point of our last two episodes was to offer up some alternatives to the big fang companies. One of the reasons for doing so is the privacy issue. But we really didn't make the case for how badly Facebook, Google and others absolutely abuse your privacy. Now, hopefully you understand a few key things. Number one, modern web advertising happens in an auction format where your personal data is sold for clicks and engagement millions of times. Platforms are the biggest beneficiary of the modern era and their position gives them outsized access and control. Number three, even if you're a paying customer, you're still the product. So don't think just because you're actually paying a site a fee that you are protected from advertising and data scraping. Because I assure you you are not. What can you do? Like go listen to the previous two episodes? I guess you can also use a browser that blocks some of the worst abuses from advertisers and ad tech. Firefox and Vivaldi are good options. I'm using Vivaldi for the most part. Now you can stop using Google and its ilk for web searches. We suggested a few really good ones.

[00:34:05.07]
Ned: Coggy if you want to pay for something, they double promise, swear not to collect your personal data and like seem fairly legit and also get off Facebook because they're evil. I'm not being glib, they are truly evil. Mark Zuckerberg deserves to be in prison.

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Chris: Like a bad prison, like that what.

[00:34:28.14]
Ned: What'S the name of that prison down in El Salvador? That one? Send him to that one. He's a natural citizen, but like that doesn't seem to be a barrier, so let's just ship him down there. Your thoughts, Chris? They miss anything.

[00:34:48.21]
Chris: I mean, we could have gone more deeply into how all the technology actually works because it is a lot of technology and a lot of really smart people wasted a lot of their lives building this stuff to make a small subset of the population extraordinarily wealthy on the backs of our personally identifiable information.

[00:35:10.02]
Ned: That's a good point. You think about all the really, really smart people that went to go work for Google. You know, Google is famous for having really difficult interview process, especially if you're going to become an engineer. And a lot of that engineering talent was used on those ad platforms that we talked about to make the algorithms better, to make the scripts faster, to also expand out the world of data mining and data processing and just data science in general and push forward machine learning and whatnot. The reason Google was such a pioneer in machine learning for a long time was not, you know, out of the goodness, out of their heart. It's because they needed a way to munch through all the data that they were collecting on you. The reason that they've built like exabyte and zettabyte scale file systems is because they needed something that was capable of holding all the information that they're collecting about you.

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Chris: Right.

[00:36:14.20]
Ned: Reminds me of the technology that we have gained from R and D for the military. Like obviously a lot of that technology was put to uses that we would find distasteful, but we did end up with like microwave ovens. Well, like this is ad tech is the same version of that. Very distasteful uses, but we also got like really powerful technology out of it because it was invented for a purpose that makes a lot of money.

[00:36:45.06]
Chris: You got to install the microwave ovens.

[00:36:49.17]
Ned: Custom kitchen deliver. Ay ay. Hey, thanks for listening or something. I guess you found it worthwhile enough if you made it all the way to the end. So congratulations to you friend. You accomplished something today. Now you can go sit on the couch, fire up your microwave and play some Weird Al Yankovic. You have earned it. You can find more about this show by visiting our LinkedIn page. Just search Chaos Lever or go to our website chaoslever.com where you'll find show notes, blog posts in general, Tom Foolery. We'll be back next week to see what fresh hell is upon us. Tata for now.

[00:37:35.10]
Chris: Totally, totally, totally. Telling Tim Berners Lee that you called him Dim.

[00:37:42.13]
Ned: Sorry, Tim.