Consumer Manipulation via Online Behavioral Advertising

TL;DR

This paper analyzes how online behavioral advertising (OBA) can manipulate consumers, highlighting the lack of academic focus on this issue and providing an analytic framework to understand the manipulation mechanisms involved.

Contribution

It introduces a novel analytic framework for understanding consumer manipulation via OBA and applies it to reveal the extent of manipulation caused by targeted advertising.

Findings

OBA can systematically exploit consumer vulnerabilities.

The paper demonstrates the potential for OBA to manipulate consumer decision-making.

It clarifies the mechanisms through which OBA influences consumer choices.

Abstract

Online behavioral advertising (OBA) has a significant role in the digital economy. It allows advertisers to target consumers categorized according to their algorithmically inferred interests based on their behavioral data. As Alphabet and Meta gatekeep the Internet with their digital platforms and channel most of the consumer attention online, they are best placed to execute OBA and earn profits far exceeding fair estimations. There are increasing concerns that gatekeepers achieve such profitability at the expense of consumers, advertisers, and publishers who are dependent on their services to access the Internet. In particular, some claim that OBA systematically exploits consumers' decision-making vulnerabilities, creating internet infrastructure and relevant markets that optimize for consumer manipulation. Intuitively, consumer manipulation via OBA comes in tension with the ideal of consumer autonomy in liberal democracies. Nevertheless, academia has largely overlooked this phenomenon and instead has primarily focused on privacy and discrimination concerns of OBA. This article redirects academic discourse and regulatory focus on consumer manipulation via OBA. In doing so, first, this article elaborates on how OBA works. Second, it constructs an analytic framework for understanding manipulation. Third, it applies the theory of manipulation to OBA. As a result, this article illustrates the extent to which OBA leads to consumer manipulation. Crucially, this article is purely analytic and avoids normative evaluation of consumer manipulation via OBA. Evaluating consumer manipulation harms of OBA is an equally important but separate task and is pursued in another publication.