As digital advertising has become the dominant revenue model for everything happening online, from journalism to media and entertainment, programmatic buying and selling of ad inventory has evolved into a multi-billion-dollar business. Algorithms on virtual marketplaces now negotiate within fractions of a second to determine the ads each of us sees whenever we open a web page or conduct an online search.

Author and researcher Tim Hwang makes an intriguing observation about these markets: He sees some structural weaknesses reminiscent of the financial markets prior to the crashes that led to the 1929 and 2008 crises. Hwang argues that the assets traded are often “toxic” (i.e., their underlying value is much lower than what both buyer and seller believe), the markets are highly opaque, and they are fueled by perverse incentives that benefit all parties involved.

Hwang poses a thought-provoking question: What if we were to witness a crash similar to the 2008 financial crisis, but this time caused by programmatic ads instead of subprime mortgages? Such a scenario, driven by a ten to a hundredfold decrease in click prices, could wreak havoc on countless business models. Ad-funded journalism, already facing threats, would become entirely unsustainable. Widespread layoffs and a recession in the media business might follow, potentially triggering an uncontrollable downward spiral for the entire economy. To avoid this unpredictable burst of a bubble, the author proposes a “controlled” deflation of the programmatic ad markets, with a key role assigned to regulation and independent oversight. Unfortunately, as of now, neither of these solutions is on the horizon in the United States or the European Union.

One does not need to be an expert in the digital advertising domain to appreciate Hwang’s argument and feel some concern about the potential implications if he is right. Although his prediction of impending doom, made in 2020 when the book was published, has not yet materialized, it doesn’t rule out the possibility of it happening at some point in the future.