14 December 2020

The end of a free internet could come sooner than you think

By Kit WIlson

The utopian image of the internet is that it allows us — for the first time in history — the genuinely unfettered and open exchange of information. And so quickly has an approximation of this ideal become a fixture of our lives that we now assume it to be an inevitable, permanent feature of our world: a threshold of human advancement back through which we will never again slip.

But there are two potential changes that could quickly dash that vision, and dramatically reshape the web as we know it. One is the likely collapse of the online advertising industry, which once seemed an inexhaustible goldmine from which the largest private companies — the Googles and Facebooks — could make their fortune. The other is the rapidly increasing level of interference from individual nation states into the infrastructure of the internet itself.

The suspicion that online advertising might prove to be a bubble has been kicking around for several years now. I first saw rumblings back in 2018: Procter & Gamble, the world’s biggest advertiser, had just cut its digital spending by 20%, citing concerns over the true effectiveness of online ads, and claimed to have increased its marketing reach by 10%. There was already plenty of data available that might have dissuaded prospective advertisers: the fact that “click fraud” was already costing the global industry $35bn a year, or that 56% of online ads were never even seen by humans. But in the two years since, the evidence that something is awry has piled up dramatically.

A study last year found that targeted ads, which can cost advertisers as much as 2.68 times the price of non-targeted ads, are in fact only 4% more effective. Another study found that middlemen take as much as 50% of all advertising revenue. As Gilad Edelman wrote earlier this year in WIRED, there are now “piles of research papers… showing that companies’ returns on investment in digital marketing are generally anaemic and often negative.”

For a $325bn a year industry, that’s quite astounding. As Jesse Frederik put it in The Correspondent last year, it’s “a market of a quarter of a trillion dollars governed by irrationality”. Tim Hwang, the former director of the Harvard-MIT Ethics and Governance of AI Initiative, and author of Subprime Attention Crisis, predicts digital advertising will collapse in a similar manner to the housing crisis of 2008. If he’s correct, the ramifications would be huge: “if online advertising goes belly-up, the internet — and its free services — will suddenly be accessible only to those who can afford it”.

Will the web become a maze of paywalls and subscription-only sites? It’s hard to see precisely what financial model today’s “free-to-access” sites — and the social media giants in particular — would adopt instead. 99% of Facebook’s revenue comes from advertising, as does 80% of Google’s (it’s no surprise that these two are the most notorious of the so-called “walled gardens” — companies that deliberately conceal data about how effective or ineffective their ads really are). Plenty of smaller media sites have depended on a financial model that combines advertising revenue with speculative investment from venture capital, based, as Josh Marshall wrote at Talking Points Memo a couple of years ago, “on the assumption that scale — being huge — would allow publications to create stable and defensible business models”. This looks increasingly untenable.

But if a market readjustment spells trouble for internet freedom, then there are plenty of political leaders — many of whom were sluggish to respond to the initial expansion of the web — happy to speed the process up. We’re already seeing the start of a belated race for “cyber sovereignty” — with individual nation states becoming increasingly hardline about censorship and data rights. According to the latest “Freedom on the Net” report, 2020 was the tenth consecutive year in which global internet freedom declined.

Trump’s audacious tug of war with TikTok earlier this year was probably the most conspicuous case of late. But this gerrymandering of the web is quickly becoming the norm. A few months ago the Thai government forced Facebook to block access to a group of one million members criticising the country’s king. India has already banned TikTok — wiping out 200m users at a stroke. And China has, of course, long restricted its citizens’ access to hundreds of websites. Trump’s intervention merely confirmed the new reality: that the internet is quickly being carved up into nation-shaped chunks.

So, what will the upcoming decade of the “splinternet” look like? There’s been speculation we’ll soon need “passports” to travel between different internets (yes, that’s plural). For those living in authoritarian regimes, the prospects are likely bleak — widespread censorship will quickly become the norm. One prediction is that the United Nations, which declared “online freedom” a human right in 2016, might end up having the job of pressuring governments that restrict access to the web.

Whatever the fine details, though, a combination of private collapse and public interference could mean the internet of the next few decades looks dramatically different. As Hwang said in an interview with The Nation: “We might look back in 30 years and think, ‘Wasn’t it weird we had all of these huge public platforms where we could broadcast our thoughts to the world?’”

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Kit Wilson is a writer and musician.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.