Google’s auctions actually traded derivatives of behavioral surplus

Evidence

This new pricing discipline established an ever-escalating incentive to increase behavioral surplus in order to continuously upgrade the effectiveness of predictions. Better predictions lead directly to more click-throughs and thus to revenue. Google learned new ways to conduct automated auctions for ad targeting that allowed the new invention to scale quickly, accommodating hundreds of thousands of advertisers and billions (later it would be trillions) of auctions simultaneously. Google’s unique auction methods and capabilities earned a great deal of attention, which distracted observers from reflecting on exactly what was being auctioned: derivatives of behavioral surplus. Click-through metrics institutionalized “customer” demand for these prediction products and thus established the central importance of economies of scale in surplus supply operations. Surplus capture would have to become automatic and ubiquitous if the new logic was to succeed, as measured by the successful trading of behavioral futures. — Shoshana Zuboff, The Age of Surveillance Capitalism, 259

Categorization

• DEFINE: Rigorous definition of what AdWords actually auctioned: derivatives of behavioral surplus, not merely ad space.
• XREF: Connects to the core concept of behavioral surplus introduced in earlier chapters of this same book. — connects to: Behavioral surplus flows back to shape driver behavior and feed prediction futures markets — Shoshana Zuboff, The Age of Surveillance Capitalism, 679; Sidewalk Labs applied Google’s behavioral surplus model to physical urban space — Shoshana Zuboff, The Age of Surveillance Capitalism, 720; Digital assistants convert inner life into calculable behavioral surplus for others’ profit — Shoshana Zuboff, The Age of Surveillance Capitalism, 796 (+6 more)

Broader Connections

• Google’s ad-ranking innovation operationalized behavioral surplus as its core asset #expands (0.92) — Shoshana Zuboff, The Age of Surveillance Capitalism, 239
• Behavioral surplus is data used beyond improving search service quality #corroborates (0.82) — Shoshana Zuboff, The Age of Surveillance Capitalism, 232