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Facebook Deserves More Credit… Our Data Is Not "the Product"

August 2, 2019 in Economics

By Ryan Bourne

Ryan Bourne

It’s the must-say cliché about Big Tech. On a new Netflix
documentary, The Great Hack, digital media professor David Carroll
repeated that, when it comes to social media platforms, “we are the
commodity.”

Such thinking is common in writing about Google and Facebook.
Tropes such as “you’re not the consumer, you’re the product” are
repeated ad nauseam. The idea is the same. Since Facebook and
Google do not charge us for services, it’s said we pay through giving up our information, in turn
sold to third parties for well-targeted advertising
.

So entrenched is this belief, a Financial Times editorial this
week advocated overhauling competition laws to acknowledge that
“digital services increasingly cost long-term privacy rather than
money”.

Whoa, there. Before good policy is sacrificed to this meme, let
us pause and reflect. Yes, Facebook and Google make money through
information-infused advertising targeted at granular user
populations. But there’s nothing new about this practice. Nor does
it follow that users are “the product” or that privacy is “the
cost” of digital services.

Journalists, of all people, should understand this. Free
newspapers and free-to-air broadcasters, such as ITV and Channel 4,
have similar business models. All seek to capture readers or
viewers by providing good quality content.

Generating these large audiences is necessary for their
advertising space to generate revenue. Media companies must profile
their readers or viewers, pitching this demographic information to
would-be advertising buyers. Yet, strangely, nobody says ITV
viewers or Metro readers are “the product” or a “commodity” of the
companies.

True, TV networks and papers don’t collect much individual level
data or enjoy the scale of information of Google or Facebook. Yet
this is a matter of degree, not principle. One senses the teeth
gnashing comes precisely because tech has disrupted the traditional
media’s approach.

Advertisers on Facebook can now target ads at 35 to
40-year-olds, living in the Medway towns, who are interested in
water polo; obtaining real-time feedback on the ad’s success. That
obviously helps maximize the effectiveness of ad spend. None of
that makes our data “the product” or privacy “the cost” of Google
or Facebook though. In fact, there are three clear reasons why such
claims are misguided.

First, and most obviously, the value of these firms’ advertising space is dependent on
strong user numbers
. Google must deliver an accurate search
engine, and Facebook high-quality networking and applications, to
keep us using their websites or apps. That provides an incentive to
respond to our wants and needs, including on privacy. We might not
be paying customers, but we are much-needed consumers.

For now, these firms are successful. Alternatives are just a
click away …read more

Source: OP-EDS

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