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How refining advertising in Europe is sparking controversy

Link:https://themediaonline.co.za/2018/10/digital-advertising-rise-of-the-algorithm-raises-ethical-and-legal-issues/

The article focuses on the digital advertising market in Europe, and more specifically, France. It is reported that the digital advertising market in France is now at 3.5 billion euros. Perfect matching for ads has always been an issue, since the main types of ads are either impressions or clicks, and while impressions give more ad exposure, it might not get people interested enough, and click ads lose their value because they only get exposure if people decide to click on them. Currently, though, the web and improvements in technology allow “the profiling of internet users” which “is carried out using traces of their web activity, which makes it possible to predict their interest in an ad at any given time”. This allows websites to not only display impression ads, but display impression ads that more accurately reflect people’s interests, which in turn causes whoever sold the ad to get almost guaranteed interest and profit from web users. The two major factors that cause controversy, though, are the extent that sites “mine date” from their users, and the “discriminatory” ads that websites display since “the algorithms sometimes benefit from exaggerated confidence”.

In my opinion, algorithms like the one’s used in Europe are necessary in our day and age, where websites and advertisers really have no choice but to compete for more exposure and money. One of the biggest hurdles in advertising is matching a perfect market matching for websites and ads based off the demographics of the website’s users. The values for selling ads really depends on the demographic of the websites that the ads are displayed on, and although the demographic for website users usually follows a structure, that doesn’t take away the fact that the demographic of any website is dynamic to an extent; there is really no perfect matching for the ad market unless constant information about who uses the site is known. This is where the need for quick algorithms like the European ad algorithms come in; by constantly collecting only necessary user data in real time, algorithms can update their ads on a website just as constantly as how much the demographic changes on the websites. On top of this, it encourages more truthful bidding for advertisers about their values due to the fact that since ad preferences are constantly changing on each website, just because one advertiser has the competitive edge over other advertisers at one time by broadcasting an untrue value doesn’t mean they’ll continue to have the competitive edge as time goes on. So algorithms that can update and perfectly match markets in real time not only increase ad revenue for websites and gain more exposure for advertisers which allows for more efficient advertising, but truly cement truthful bidding as (almost) always the dominant strategy.

Although new advances in ad algorithms are certainly beneficial for websites and advertisers, I still believe that whoever makes these algorithms have to make these more transparent and show the extent of data they are collecting in order to perfectly match the market. Even though on paper these algorithms definitely help both websites and advertisers, the moral and ethical consequences of data collection could deter users from going to sites that they know use such methods to maximize revenue, which could in turn lower the payoff for every website, since the total amount of website users would decrease and perfect market matching would only help to an extent.

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