What Would Google Do: Is this really the economic model?

Cover of What Would Google Do?

What Would Google Do?

Jeff Jarvis

2009

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I read this book as part of a two-part series on social media and the future of the internet, along with Siva Vaidhaynathan’s The Googlization of Everything, so expect some posts on that one after I’m done with this.

In this post, I wanted to focus on the economic model that Jarvis describes (“The Google Economy”). It’s heavily based on targeted advertising.  He describes Google’s keyword auctions, which allow companies to bid on words that will trigger the appearance of ads that they would like to run.  Websites allow the ads to run next to their content, in exchange for payments from Google, and under ideal circumstances, the people who visit the website click through the ads and then proceed to buy whatever it is the companies are selling.  This is a simplification of a simplification; Jarvis has attempted to explain it in a clear and accessible manner and I’m just summarizing for this post, so obviously there is more to it than that.

There were two basic problems I had with this.

The first problem is this: a model that claims the internet runs on AdSense and Googlejuice is certainly incomplete. Many of the sites where I spend my time rely at least partly on donations, which, oddly aren’t addressed in the book at all.  Maybe I’m anomalous here, but quite a few of the sites I use on the internet rely on donations as an important part of being able to stay online. Some examples: Wikipedia, Board Game Geek (center of the board gaming world online), actual online games Kingdom of Loathing, feminist blogs like Shakesville (which have good reasons to avoid AdSense), and just about every podcast I listen to (let’s say The Spiel as an example, since they are having a pledge drive).

Shakesville is an interesting example.  It’s an excellent feminist blog; rigorous, accepting, entertaining and earnest by turns, and full of a large amount of content every day.  It’s run mainly by Melissa McEwan, who, I understand, is a full-time blogger.  I can see no other way that a blog of this volume and quality could be produced.  However, Shakesville does not run AdSense.  After all, there is an inherent problem with keyword-based advertising in such a context.  The contributors to the site spend a lot of time writing about things that they consider toxic in the culture, because pointing out these things is important to their mission.  For instance, McEwan often writes about fat hatred and body policing and why these things are a problem for the women and men who are surrounded by them day after day.  AdSense is likely to respond with ads for diets.  By using services that target keywords, sites may attract advertising for companies they explicitly do not support, and in this case, advertising that may cause actual psychological harm to some of their readership.  So there are no ads on Shakesville, only a donate button and a post every two months reminding readers that supporting the blog is an important thing to do.  The problem with donations is that they’re very frequently insufficient.  I strongly suspect that there are other blogs and cultural productions of all sort on the internet that find this to be a problem.

In his book, Jarvis describes “virtuous circles,” which involve people put things on the internet for free, consumers see them, advertisers advertise, and without having to resort to scarcity pricing, everyone ends up making more money than before. But we don’t always get that. Sometimes, what we get is people who work for free and, well, that’s all really, they just work for free, or for unsustainably small amounts of money.

In some cases that’s fine. There are lots of little hobby activities on the internet that people do in their spare time without wanting or needing to be paid. There are also, however, some types of speech that are important, and that require further time investment than spare time allows.  Of course, people can decide they’d like to work for free if they wish.  But sometimes those people are doing things that are important and if they could get paid, it would be a lot easier for them to keep doing it.  The internet’s provided them with a way to publish their thoughts and that is great—but it hasn’t provided them with any way of making money from it.

(I seem to have convinced myself to donate. Curiously, between the time I wrote this post and the time I posted it, she put up a donation post–it didn’t inspire this, just a little coincidence.)

The second problem may be partially attributed to my ignorance of economics, but it boils down to a simple question: how are the advertisers getting paid?  Where is all this money coming from?

There’s an idea in the book that many websites are funded by ads from Google. Thus, they can offer their content without charging the reader.  It is the advertisers, not the consumers, who provide the money.  The consumers are happy because they realize that they can enjoy a lot of information, entertainment and services without having to pay.  The advertisers are happy because they are getting the attention of people who may be interested in their products.

But somewhere in this chain, someone has to pay for something.  If they don’t, the advertisers realize that their money is being wasted and stop buying keywords, Google is left without a major source of revenue and bad things happen.  So… do people click through ads, and if so, do they buy things?  There are a lot of times in my life when I don’t want to buy anything, and I spend a lot of that time on the internet.

There are some activities that naturally lend themselves to commercial content. I mentioned gaming earlier.  People who look at board game sites on the internet buy a lot of board games (in some cases, a lot of board games) and are often on the lookout for the hot new thing. There’s a natural opportunity for advertising because people are interested in buying stuff.  However, this is very far from covering all the speech that may be made on the internet.  Consider the example above, or really any type of political speech (for example: anti-consumerism!).  Or consider things people make on the internet for artistic or entertainment purposes.  These are often supported by merchandising; I have no idea how successfully.  But for these sorts of content, it’s difficult to imagine the ad-supported model working well, because when I want to read creative stuff on the web, I don’t want to click over to another website and buy whatever it is they are selling. I just want to read creative stuff on the web. If people come out with them as books, I’ll buy them then…

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6 Comments

Filed under Professional or Philosophical

6 responses to “What Would Google Do: Is this really the economic model?

  1. Very interesting post (and sounds like an interesting book as well). I am with you in thinking that Adsense ads don’t work for those who should be making money on the internet the most – which to me are those bloggers like the feminist sites who explore tough issues. Seems like a broken model to me that favors only those who ‘toe the line’ in a sense. Also, I never click through or buy anything so really don’t know how the whole thing works!

  2. Interestingly enough, Feministing discusses something similar in this post (http://feministing.com/2011/06/16/netroots-nation-2011-power-and-privilege-within-movements/) today and I thought it was related enough to come comment again 🙂

    “I think it’s incredibly important for people to get paid to do social justice work – it needs to be sustainable. But big picture issues with organizations speak to the difficulties of working for justice within a fundamentally unjust capitalist system. Nonprofits are the way we know for this work to fit within capitalism, but they often seem to hurt our ability to genuinely fight for justice.”

    Not quite the same but again highlighting how current models don’t work so well for those who are really pushing for change and discussing social issues.

  3. Thanks for linking that! It was a very interesting read.

    I agree with you that it’s a good way to highlight how discussing social issues in particular is something for which no current model really works as well as it should.

    The funny thing is that for a lot of kinds of new stuff, it works really well, better than anything else that exists so far (and I think you’ll see examples of this in my next post). But it certainly isn’t as universally beneficial as Jarvis seems to think.

  4. Doug Faust

    Several months ago I heard about some sort of meta tag that you could embed that would tell Google that the writer is not linking a site because he endorsed it, but rather because he was citing it as something bad. I wonder if that sort of logic would work with keywords? In any case, that’s just a stopgap solution, what really needs to happen is that Google needs to understand context.

  5. I was actually at a talk last week with several people interested in the digital humanities, including a Googler. He was careful to distinguish between things that they could easily do (i.e. identify a list) and things that require “near human intelligence.” Reading for tone is definitely the latter. We certainly don’t have AI that can do that now. I’m not convinced we ever will, but if we do, it’s going to be a while.

    What you’re suggesting as a stopgap is essentially that writers have to tag every noun to tell Google whether they like it or hate it… sounds pretty labor intensive to me. And what if you only write about things you hate?

  6. Pingback: Remix: Making Art & Commerce Thrive in the Hybrid Economy: Copyright & Culture | onereadleaf

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