Virtuous Living, America’s Responsibility Problem, and Developing Your Moral Code — with Ryan Holiday

Algorithmic Bias

Scott Galloway highlights the pervasive issue of algorithmic bias in digital advertising, which affects nearly half of all ad spending in the U.S. He notes that a study by MIT professor Katherine Tucker found targeting as basic as gender was unsuccessful more than half the time, indicating a significant flaw in algorithmic targeting 1. This inefficiency is compounded by the fact that 89% of ad dollars are spent on programmatic advertising, which relies heavily on algorithms.

Plaintiffs in a class action suit against Facebook have alleged that its targeting algorithm accuracy was between nine and 41%, and quoted internal Facebook emails describing the company's targeting as "crap" and "abysmal."

--- Scott Galloway

Galloway suggests that small to medium-sized retailers should reconsider their digital advertising budgets and ensure they receive legitimate insights into ad efficacy 1.

   

Ad Fraud

Ad fraud is another critical issue plaguing the digital advertising ecosystem, with Scott Galloway describing it as a significant externality of the revenue model. He compares the current state of digital advertising to a "carcinogen lane," where fraud is rampant and unchecked 1. Despite these challenges, Galloway acknowledges that digital advertising remains more effective than traditional methods, albeit with substantial room for improvement.

Digital advertising is still a lot better despite the fraud, and I hate to say this, Facebook and Google, they got us. You want to build an online business? Welcome to Facebook. Welcome to Google.

--- Scott Galloway

He argues for breaking up major tech companies to foster competition and innovation, which could lead to better checks on ad fraud 2.