What If We Banned Marketing?

This is going to be a quick post as the idea is much more pipe dream than analysis.  I first want to get out a list of examples of pernicious marketing, the ones that seem to be facilitated by technology.  In no order of importance my list is:

1. Robocalls
2. Social media, where the user is not the customer.  The user is the product.  Advertisers are the customers.
3. Fake News
4. Email where vendors automatically subscribe you and then offer an unsubscribe link.
5. Free Web sites that are ad-supported, with ads that fit your profile from Google use.

Perhaps the list can be made longer.  It's enough for now.  The question to ask is whether you indirectly benefit, by using services that you don't pay for, more than it costs you, by being exposed to all this virtual snake oil selling, or if you would be better off without any of this sort of marketing at all, and paid for the services you want.  I don't know the answer to this question, especially as it applies to the population as a whole, but I'm beginning to suspect that for me only I would be better off if the marketing entirely disappeared and I had to fork up more bucks for my online use.  (Of course, this depends on how much I would have to pay.)

Now a bit about the economics to sharpen what I have in mind and also to argue more about why the marketing is so pernicious.

Content on the Web is essentially a public good.  By this I mean that the marginal cost of getting somebody else to access the content is essentially zero.  Paying a very small amount per each access is not the right way to price such a public good, as it will drive use down well below the efficient level.  At present, there are subscription models, such as with the digital New York Times, that still comes with some ads and that enable a limited amount of free use for non-subscribers, and that co-exists with the full ad-supported model.  The Times, of course, has a long history that pre-dates the Internet.  New entrants among the providers are apt to simply rely on the ads.

The thing is, the ad-supported model impacts how the news is presented, from an incentive point of view for the provider.  The more eyeballs that see the ad, the more the provider can charge the advertiser for running the ad.  So the provider looks to ways that can generate a large audience.   Producing shrill content then wins out over producing more level content.  Users are attracted to the sensational and repeat use is habit forming.  This is likely unhealthy for the user but is surely profitable for the provider.

One might hope to engineer human beings so they have a preference for more level content.  In the absence of that, however, one needs a different solution.

So the alternative I have in mind is where there were several buying consortia, and each consortium, in turn, would contract with multiple providers for unlimited access that was ad free, made available to all consortium members.  One type of consortium might be state or local government, that used taxes of residents in lieu of consortium fees.  Consortium members would need to have some affinity for one another, so the providers that the consortium did contract with would have broad appeal with the membership. Geography might be one source of affinity.  It that proved correct, then a government as a consortium makes sense.  If, in contrast, affinity was driven by having similar interests in things, then private consortia would be better.  I made a post a while back about this, thinking that the real function that the consortia would deliver is protecting members with regard to their use data and policing providers so they don't misappropriate such data.

Now let me switch to phone calls and email.  Individual calls or messages are not public goods.  With phone calls, the real issue is that the caller doesn't pay if the the call isn't picked up on the other end.  And with email, the sender doesn't pay, whether the receiver reads the email or not.  This gives senders an incentive to market with these forms of communication, since it is zero marginal cost to them. Conceptually, at least, each receiver could have a safe sender list.  People on the safe sender list wouldn't pay by initiating a call to the receiver.  Everyone else would pay, a small but significant amount each time they send.   That fee would limit the marketing.

I don't know what we'd have to do to set up billing like this for phone calls and email, but what seems clear is the the market won't do this on its own. 

In effect, Facebook friends are safe senders, though Facebook has the issue of friends of a friend might not be your friend, so on a comment thread it may not be completely safe.   What I'm getting at is that it might really be that we're not so enamored with social networking, but we really are enamored with interacting only with safe senders. I don't know.  I'd love a way to test this out.

Let me close here by noting that I've focused on marketing for profit and have ignored marketing to achieve political ends.   That was to make the economics part easier to consider.   I don't know if my economic analysis has much to say about the political use, other than to note that if phone and email got rid of the spam through some pricing arrangement for senders, then people who have been turned off by these means of communication might rely on them more.  In turn, that would offer alternatives to Facebook, which would weaken it's monopoly power.