There has been a bubble in adtech, a bloated industry that undermines brands' value and remains at odds with consumer privacy and security, and GDPR will pop it
In The Big Short, investor Michael Burry says “One hallmark of mania is the rapid rise in the incidence and complexity of fraud.”
Context & Ripple Effects
The bubble argument rests on a paper trail this site has been building since 2015: bot-driven click fraud costing advertisers billions a year, and a tracker ecosystem so invasive it undercut the moral case against ad-blocking entirely. Searls borrows Michael Burry's mania marker — rising fraud complexity — to argue the industry's value was always partly fictitious.
What changed by May 2018 is that enforcement arrived: DoubleClick began warning publishers of steep EU ad-volume declines under GDPR, and within days advertisers were re-examining their Facebook commitments as prices rose and targeting degraded. The prediction is being tested in real time.
First-order effects
- Publishers face the steep short-term EU ad-volume declines DoubleClick is already warning about, hitting the long tail of sites most dependent on programmatic fill.
- Facebook advertisers are re-pricing their commitments as GDPR makes targeting harder and average ad prices climb.
Second-order effects
- Ad budgets migrate toward platforms holding consented first-party data, squeezing the intermediary layers — exchanges, trackers, verification vendors — whose value proposition GDPR directly attacks.
- Fraud economics worsen for the middlemen: with fewer impressions flowing, the share of spend lost to bot schemes becomes harder to hide inside inflated volume.
Third-order effects
- If the pattern holds, adtech consolidates around a few walled gardens with direct user relationships while the open-web tracking stack shrinks — a structure later reinforced when Apple's ATT pushed advertisers through the same repricing at Meta, shifting budgets to Google, Amazon, and TikTok.
The trend: Privacy regulation is sequentially stripping out the surveillance-based adtech middle layer, consolidating digital advertising around platforms that own consented first-party data.