Increased partisanship from targeted ads
Advertisement is a large part of the revenue for certain companies, like Google and Facebook. By auctioning off ad slots to certain advertisers, these companies are able to maintain a large revenue stream, despite the fact that Google and Facebook provide a free service to the majority of the public. When these companies post the prices for these ad slots, they could use the Vickery-Clarke-Groves (VCG) procedure. In the VCG procedure, the clickthrough rate (CTR) plays an important role in determining which advertiser ends up purchasing a certain ad slot. However, depending on a person’s preferences, their CTR can vary dramatically. Although it is almost impossible to assign CTR to every person, companies can group people according to their browser history and cookies and assign these groups different clickthrough rates. By using browser cookies, companies, like Google and Facebook, can provide personalized advertisements. This concept makes sense to improve the quality of ads that each person views. If someone really likes cooking or recipes, it makes more sense to show them ads for cookbooks or kitchen appliances rather than ads for car insurance. However, personalized advertisements can have darker implications.
A research study showed that Facebook’s advertisement tools could be more responsible for the division in American politics than previously thought. Even though most political campaigns make their own decisions regarding targeted ads, the study showed that the content of the ads themselves had a significant impact on who saw the ads. This makes it more difficult for people to stay informed on controversial topics, especially during campaign season. Most people end up viewing ads that are already aligned with their beliefs, or the beliefs that Facebook thinks they have based on their browser history. In fact, the study found that trying to show ads to people that did not agree with the content of the ads resulted in a higher cost of advertising. In terms of politics, this effect makes bipartisan conversations more difficult, especially as more political campaigns rely on digital platforms, like Facebook or Twitter. One particularly malevolent application would be using this form of targeted ads to spread misinformation. Such ads would detrimentally affect the democratic process and could result in a society controlled by propaganda and misinformation.