How Facebook Sells Your Data
It’s no secret that Facebook collects massive data about its users. Some of the data have to do with the locations you visit, how long you’re on Facebook and of course other things. Some of the things that they collect include your email address, as you could’ve guessed. And things like the strength of your battery, which you probably never would have guessed that such data would be of value to anyone.
There’s a saying in the tech space- “If you are not paying for it, you’re not the customer; you’re the product being sold.” It’s true. Facebook is a free app. The lengthy Terms and Conditions each user must accept before gaining access to the app spells all of this in legalese. Much of it is way too cumbersome for the average consumer to unpack.
So how does Facebook sell your data?
Truth be told, they don’t actually sell your data — they are really selling only access to your data. Think of it this way: Facebook is not creating spreadsheets from database queries, then packing that data into a digital file that is sold to the highest bidder. That’s not how it works. What they’re selling is access to your News Feed. The access to your news feed uses Facebook’s data to serve you specific ads. What ads are shown are determined by data that suggests you’re interested in certain products, services, or anything that can be bought.
This is the business of targeted advertising.
Advertising used to be handled very differently. If you’re old enough to remember buying magazines based on your interests, you probably remember seeing ads in these magazines. For example: if you were reading a travel magazine, maybe you saw an advertisement for a trip to Bora Bora from American Airlines. Maybe you picked up the phone and called American Airlines.
The problem for American Airlines as an advertiser was that there was no way to track which magazine compelled that caller to buy a ticket. American Airlines advertise in many magazines. There was no unique identifier to help their marketing department figure out which magazine was producing new customers, and which magazines were not.
In the early 2000s, that all changed with digital marketing. Every ad response can be tracked to the exact ad in the exact publication or wherever the ad was posted.
Advertisers loved this because they could pinpoint which ads in which form of media was “converting” viewers to buyers. Facebook ads account for billions of dollars in revenue for Facebook every year.
Advertisers create ads that are served to selectable audiences pre-packaged within the Facebook Ads Manager. You can target age groups, certain regions, interests, and more. When an advertiser creates an ad, the ads will be served (aka “displayed) to you if your data indicates that you fit into one of the audiences selected for targeting by the advertiser.
Can you see what data Facebook has collected about you?
You sure can. There are at least two places you can check.
Start by hitting the “Settings” tab on Facebook, then from there, make your way to the “General” tab where you will see an option that prompts you to “Download a copy of your Facebook data.” Click on it.
This will show you all of the data Facebook has collected about you, from private messages to photos to your search history. This is a big wake-up for some people.
Under “Settings” you can also click the tab that says “Ads,” which will take you to an “Ad Preferences” page that displays the interests Facebook thinks relate to you (and advertisers use to target you), along with additional information they might use to target you (e.g. phone type, region, etc.). You can change or remove interests or information from this page that you feel isn’t relevant to you, or if you just don’t want Facebook advertisers using that data to serve ads to you.
What’s the goal? Is it to “spy” on you?
Not in the sinister sense. The goal for advertisers is simple: to serve you the right ad, for the right product or service while most likely to make a purchase. How many times have you been on your computer looking at a product and an hour later, you see an ad for that type of product on your Facebook news feed? That’s not an accident – it’s done by design.
The goal is to give consumers a better shopping experience. Distrust of Facebook is growing and given the company’s 2018 scandalous privacy issues involving Cambridge Analytica, (a third-party data firm that got its hands on personal data for as many as 87 million Facebook users without their permission), no one can fault users for being suspicious.
Ultimately it comes down to revenue. Facebook is a business. They’re in business to make money. Selling access to advertisers who wish to peddle their wares on Facebook is their business model. Users are using Facebook for free and the Company has the right to earn revenue from this activity.
Users happily use game apps for free and all that’s asked of the user is to sit through some ads between activities.
How Breakout is Different
One of the ways Breakout is a disruptor in this industry is that users on our platform control their data. Users on our platform can choose what data they want to sell and when to sell and to whom they will sell it.
Our data marketplace allows users to package and sell their data themselves. The best part is that the user gets to keep the vast majority of that revenue. In fact, it’s one of the biggest factors our investors like about us. You can find more information here.
