Facebook’s meta world, Google’s AI: It’s all about selling more socks

Google and Facebook love to talk about the cutting-edge stuff that they’re working on. Metaverse! Driverless cars! Cloud! Artificial intelligence! Facebook is even rebranding itself as Meta to reflect its virtual-reality future.

The reality, though, is that these tech companies are rich and powerful because they are the biggest sellers of advertising in the world. They do essentially the same thing that William Randolph Hearst did a century ago: They draw our attention to try to sell us yoga pants. (OK, Hearst’s newspapers probably didn’t have ads for leggings.)

There’s a vigorous public debate about the benefits and serious trade-offs of the digital worlds that Google and Facebook created. It’s less jazzy to think about digital advertising that these tech titans have popularised. But like everything else about these companies, it’s complicated and important.

Alphabet, the corporate entity that includes Google, made about 80 per cent of its revenue this year from the ads that we see when searching the web, watching YouTube videos, checking out Google Maps and more. Facebook generated 98 per cent of its revenue from ads. (Facebook didn’t really talk about this when it revealed the company’s vision of us living, shopping and working in its virtual reality world.)

It’s not breaking news that Google and Facebook are souped-up versions of old-school advertising mediums like newspapers or radio. I am stressing the point for two reasons. First, zeroing in on their essence helps demystify those tech superpowers. Google and Facebook seem less mythical and imposing when you know that their empires are built on selling us more socks.

Second, I want us to think more about the warts-and-all effects of the Google and Facebook advertising powerhouses. The methods of advertising that the companies helped popularise — highly automated; based on information about who we are, what we do online and where we go; and at a scale unlike anything before — has changed the world around us in both good and harmful ways, without most of us really noticing.

Sure, some of the benefits are easy to see. Google and Facebook offer (arguably) helpful products and services at no cost to us because advertising pays the bills. Ads also make stuff that we use outside Google and Facebook cheaper. Or possibly more expensive, which I’ll get to in a minute.

Zeroing in on their essence helps demystify those tech superpowers. Google and Facebook seem less mythical and imposing when you know that their empires are built on selling us more socks.