Sheryl Sandberg’s Legacy Is an Internet of Targeted, Automated Ads

(Bloomberg Businessweek) -- When she announced her resignation as chief operating officer of Meta Platforms Inc. on June 1, Sheryl Sandberg posted an essay celebrating her long partnership with Facebook co-founder Mark Zuckerberg and recounting her achievements there since 2008. She brought up , of course, and the company’s 3 billion users, but barely alluded to her most important contribution to the business of technology..When discussing her first meeting with Zuckerberg at a party in 2007, Sandberg wrote that she was familiar with “The Facebook” at the time, but she also “still thought the internet was a largely anonymous place to search for funny pictures.” This account, if true, represents an almost criminal understatement of Sandberg’s own achievements to that point. When she began talking with Zuckerberg, Sandberg wasn’t some internet neophyte; she was an executive at Google and the architect of the changes that would transform it into the biggest and most important internet company in history. Within a few months she would join Facebook and bring the same vision to the social network..Sandberg’s mandate at Google was to build the advertising business that founders Larry Page and Sergey Brin hadn’t bothered to create—in part because they believed that advertising might be a violation of their famous “Don’t be evil” motto. Sandberg, who overcame early internal objections while expanding Google’s ad sales organization, thoroughly cured them of that fear and helped turn them into megabillionaires..Under her leadership, Google offered two related advertising products, AdWords and AdSense. AdWords was an automated system that had businesses compete for a slot at the top of the Google results page by naming the price they would pay each time a search user clicked on their ad. If AdWords seemed to anticipate customers’ desires by serving them messages tailored to exactly what they were looking for, AdSense tried the same thing, by using software that scanned the content of websites and then served ads tailored to that content..Both systems used software to place ads automatically, and were also designed to work not only inside Google but also across the entire web. All independent bloggers and website owners had to do to start generating ad revenue was to create an account and insert a snippet of code onto their sites. Madison Avenue would eventually embrace AdWords and AdSense, but even more crucially, Google’s offerings became the most important—and at times the only—marketing channel for small businesses..These small advertisers benefited from Google’s lack of minimum spending requirements and the efficiency of the platform; business owners paid only for customers who ended up visiting their websites, not those who ignored the ads. And because these ads spread to the rest of the internet, with major publishers and even rival search engines choosing to carry Google’s ads, the company’s annual advertising revenue went from $86 million in 2001 to about $16 billion by the end of 2007. When she joined Facebook, Sandberg’s marching orders were clear: Do the same thing for us..The ad machines at Google and Facebook were always hungry for more information about their users. Over the next decade, Facebook collected an enormous trove of personal data through its site and through tracking software that other websites embedded to integrate their services with it. It then deployed that data to create something that can feel like a mind-reading machine. Marketers can target ads to Harvard students, just as they could in Facebook’s early days, but now they can also target Harvard-educated widowers who are into curling. Or they can upload a list of emails they’ve already collected and have Facebook use its enormous trove of personal data to assemble a new list of potential targets, then show ads to those people. They can retarget anyone who’s been to their websites via a snippet of tracking code known as the “Facebook pixel,” personalizing the ads so the same pair of sunglasses you left sitting in your shopping cart unbought is now beckoning to you from inside your Instagram feed..Like the system Sandberg built at Google, the advertising business she oversaw at Facebook is now insanely lucrative. It brought in about $115 billion, almost all of Meta’s revenue, in 2021..As with Google, Facebook’s advertising tended to centralize control. It’s almost impossible to introduce a product or start a company without paying the two giants for the privilege of promoting it online. Google owns more than 90% of the search market. Meta owns three of the top four social networking applications; Google has the other one, YouTube. Their economic model has resulted in the dramatic consolidation of the information ecosystems—often with disastrous results. Local newspapers have been either destroyed or downsized beyond recognition, and a generation of extremist politicians, many of whom Facebook itself advised, have used the platform to sow polarization and violence..None of this is likely to change with Sandberg’s departure. Notwithstanding the efforts of Apple Inc. to curb user tracking within iPhone apps, the business model she helped make remains the preferred approach of most Silicon Valley startups and venture capitalists, and the dominance of the two companies she helped build, along with a small handful of other Silicon Valley giants, has made it difficult for any business to increase revenue without personalized ads..Digital advertising is, for better or worse, the scaffolding that holds up just about every business on the internet—which makes reform efforts somewhere between problematic and practically impossible. Sandberg and Zuckerberg have argued that any effort to restrict or ban targeted ads would hurt the ability of small businesses to reach customers, and that most of the proposed actions to reel in US tech giants simply boost the Chinese-owned social network TikTok. If the US hopes to compete with China, they have implied, Sandberg’s internet is the one we’re stuck with..More stories like this are available on bloomberg.com.©2022 Bloomberg L.P.

Sheryl Sandberg’s Legacy Is an Internet of Targeted, Automated Ads

Sandberg helped create the model that—for better or worse—has become Silicon Valley’s default.

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