When the business model is the privacy violation
freedom-to-tinker.com
freedom-to-tinker.com
However, that is an argument favoring the customer, i.e., the advertiser, not the product, i.e., the user.
During the Senate hearing, he was asked about Ms. Sandberg's comment that if there were no ads then users would have to pay. Mr. Zuckerberg pointed out that users can opt-out of ad targeting/data collection,[1] making the ads they receive more generic and less "relevant", but currently Facebook offers no option for users to pay not to receive any ads at all.
The still unasked question is, "Why not?"
If some users could not afford to pay, as Mr. Zuckerberg suggested in both hearings, then they could opt-in to advertising. How would this affect the business model?
Further, if those users were disappointed at how the ads they were being shown were not "relevant", then they could opt-in to ad targeting/data collection.
1. The default setting is opt-in. As we know, most users do not change default settings.
- Making ads relevant means less ads overall for the user
- It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical
- Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans.
- More generally there is no evidence that subscription users are happier.
In short, there’s nothing inevitable about advertising models as they exist today, and people who try to convince of you that they are inevitable are peobsbly trying to sow apathy.
This is of course selection buas.
If all advertising disappeared tomorrow, the world would function better. Consumers would not have advertisers trying to manipulate them, and they would more rationally allocate their resources.
Advertising is a tax placed on people who have already bought a product, which made it more expensive, to manipulate other people into also buying that same product.
Without it, good products would succeed on merit / independent reviews / word of mouth.
* The one exception I can think of is possibly during the scale period of startups, helping them scale faster (artificially) than if they just followed the "be the best and it will catch on" approach.
I'd love to not play the advertising game, but marketing seems to be one of the most important parts of running a business, if not the most important part, and it'll get its grimy hands on anything to acquire users. I'd prefer to avoid the world where they pay people to post rave reviews in HN comments to hype products.
I don't buy it. Advertising is not going to provide me with the service that is the most suited to my need, or with the best value. In fact, quite the opposite: the advertisement that's the most likely to reach me comes from the company with the largest budget for advertisement. That budget eats into either the profit of the company or into the quality of service delivered.
I really don't know any other real alternatives other than making the user pay, which would in turn make the internet just basically one big subscription model. The majority of the "free" services which many people enjoy now, like YouTube, Facebook, etc probably could not exist as they do.
What is needed is some clear boundaries (legislation), and education. I believe without advertising that the internet would not have been what it is today, and I don't think it would have exponentially better.
That's a common cultural belief that I do not subscribe to, seems to come with our currently trendy variants of capitalism/liberalism. I personally belief it is more akin to a crime that is currently not punished.
> probably could not exist as they do.
More industries have been outlawed in history.
> I believe without advertising that the internet would not have been what it is today,
I can take that as fact. But I do not think that "without ads" (on the internet or not) is "economically worse". I think without ads we would produce better quality; it's complete guessing, but that's just my expectation.
For example, I would have no doubt the the customer acquisition cost for an "free" application with advertising is a lot lower than trying to sell that same user a membership.
When it comes to social networks I would suggest that the stickiness is because your friends/family etc are on the same network. It's not if you are willing to pay, it is only really worth it, if your friends are willing to pay.
If you are talking more about a paid and free version, then there are already services out there like YouTube Red (available in some areas for $9.99+ USD). There are always options out there.
https://www.cnbc.com/2018/01/31/facebook-earnings-q4-2017-ar...
For comparison, this number just recently passed TV advertising, which is about $70B/yr ($217/person, $605/household).
Again, for this customer...
I'm moving soon and seriously considering not signing up for internet at my new address (new job, I'll be at work a ton, and the common area has free wifi I could use for the occasional email or weekend netflix download). But I won't cancel my prime subscription. That's what made me realize how sticky amazon is: I will pay 3 figures for access, even without instant access to the network that lets me get to them!
Free shipping isn't really free, the cost of a product can include multiple different factors.
As far as the annoyance point, I guess that is somewhat balanced out by the importance of the site.
But that isn't the point I was making, the point I am making is that advertising is genuine way for companies to make money from offering services. There isn't really any other valid alternatives to this over than user pays or giving it away.
We know exactly what the number is. Take Facebook’s revenue and divide it by their number of users.
Most users probably make facebook almost nothing, and then a smaller portion make them far more.
That doesn't have to be true. Done right, ads can be about making more people aware of a product, to reach people who genuinely benefit from it but would not otherwise have heard about it. That's the advertising future I'd like to see, even if it's not how things are right now.
The argument that ads are about informing consumer just doesn’t stand up to reality. The whole concept is flawed.
It is an uncomfortable truth that we have yet to really contemplate as a society.
Consumerism ISN'T sustainable, and society will grow to a point where we are going to see seemingly fundamental systems start to crumble beneath the sheer weight of consumption.
We have to be willing to ask "should we?" in addition to "can we?"
Here’s my hunch on what would happen: we would realize that it’s really messed up that the only options for people to get basic services we once took for granted is to pay for it; and those that can’t afford it must give up their privacy or start rationing a budget to access news, email etc. for a fee.
On Maslows hierarchy, privacy in the sense of ad targeting is a pretty privileged need. The business model works for the overwhelming majority of the world; it’s only broken for people who think it’s no big deal to have to shell a few bucks extra a month for either more privacy or access to services (that would no longer exist for free to the extent they do today.)
Given how much Microsoft has been pushing ads in W10, we're not going to see this push coming from Microsoft anytime soon.
Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.
You still get ads on very expensive cable TV packages.
Your bank still data mines and sells off your purchase history, dispite a large monthly fee.
What if the social network user agreement contained "privacy" provisions prohibiting collecting data if the user pays a fee but no such "privacy" provisions if the user pays nothing.
To do what?
What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway.
I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.
this totally nullifies the purpose of a advertising based business model.
TV channels i pay for them and still they show advertisement.
i can afford and i pay for them and am ok with negligible nonsense here and there, and am only going to switch to other channels when an advertisement seems to begin.
i am sure 70% ppl are capable of going and finding wat they want. and the rest of them wont buy stuff any ways just because they saw an ad.
May b this whole advertisement caters to those 2 or 3 percent of entire population who are cat on the wall.
The minority of people on Facebook that click on ads and buy things, are making it possible for the other 2 billion people to use the service without paying a monthly fee.
This distribution is identical to advertising pretty much everywhere else throughout history.
Everyone that drives by a billboard can't afford to buy what the billboard is selling. That doesn't make it a con. The buyers you do derive, out of the very large number of people that have no interest or can't afford what you're selling, pay for your billboard (hopefully).
Everyone that watches an ad on TV - the past half century - can't afford to buy the thing being sold (a $1,000 workout machine), that doesn't mean the advertising is a con.
The sole difference is the heightened targeting based on information that Facebook or Google know about your habits or interests. In the past, it was far more difficult. A TV advertiser for example, might discover through research and trial & error that TV watchers are more likely to buy that $1,000 workout machine at 1am via an hour long infomercial. The experimentation loop was dramatically slower.
There's also a very very "fat head" in front of the long tail of what customers pay FB et al for their ads.
https://www.wordstream.com/articles/most-expensive-keywords
Suggests the 10 most expensive categories to advertise in are dominated by insurance, financial, and legal services.
I suspect when that curve is overlaid with the similar long tail curve of the disposable income of FB's 2 billion users - I suspect it'd be obvious that the vast majority of FBs income comes from super expensive PPC ads shown to people with a (globally) super high disposable income.
If you let the bay area tech crowd who're struggling to find a place to rent on their own because they're "only" making $160k all opt out of getting profiles and shown advertising for $25 or $50 per month, you'd probably make a existential dent in FB's profitability - much more so than if they just turned advertising off altogether for the lowest earning billion and a half people on their platform.
It depends on what is being "advertised". To give one example, it might be an "issue ad", not for a commercial product/service. The "ad" can be thought of as a general form of persuasion to adopt some mode of thinking and consequently some specific action or inaction.
According to the whistleblower testimony, these were the type of ads being shown in certain third world countries by the companies who utilised the Facebook user data.
The people most able and likely to pay for Facebook are _exactly_ the people Facebooks advertising customers want most access to.
Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.
Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.
https://www.theverge.com/2018/4/5/17203262/facebook-medical-...
regarding the HIPAA violations it is true that hospitals cant share the data, that may be the only saving grace for now but are you certain there is no loophole that can be exploited? or may be introduced in next budget? Also its definitely not illegal for FB to do the linking should they come across such data. I'd accuse you of naivety if you assume that not the direction they want to head into.
there are many scenarios I can think of that make the problems exponentially worse especially for people in countries without a well functioning justice system. IMHO the best course of action is to starve the beast.
1. https://www.theverge.com/2018/4/5/17203262/facebook-medical-...
[1] https://www.nytimes.com/2018/04/11/opinion/silicon-valley-lo...
Governments cannot be genuine allies of the people against corporate surveillance, and for example, encourage privacy technology like public key cryptography, and client-side encryption, when their primary sources of revenue: the income and sales tax, depend on rampant and overt criminalization of privacy (KYC laws, income disclosure laws, record keeping mandates on the private activity of private citizens, etc).
Who would have thought then it would take these shady practices a mere 5 years to transition into the mainstream.
Advertising via textual context and immediate location is ok. Everything else is a dark pattern and incentivizes uncontrolled surveillance, profiling and data hoarding and should automatically be disallowed in a civilized society.
i have seen advertisement in tv when i used to watch tv a lot and am sure i have never bought those stuff jus because they advertised them, most of time we will just swap channels for few mins and advertisement wud b gone away.
And in internet it is very effortless to jus scroll past stuff that we are not paying attention to, i guess i most of the time ended up scrolling thru ads, thats y i dont remember buying anything because i saw some ad.
I don't understand their argument against pseudonomous identifiers (well, part of the problem is they present it without a lot of argument). Are they arguing that companies will reverse the hash, or that they will de-anonymise it using additional data? Otherwise it seems harmful to me to tell people that using a different identifier per web site is useless (a bit like telling everybody that locking your car is useless because a determined thief would break in anyway...)
You also don’t mention how targeted advertising is critical to many small business. If you have niche or specalized product it can be very difficult to find people that want to buy it, you are limited to only places where those people are in high concentrations, it is quite reasonable to expect that the elimination of targeted advertising would quietly erase these business as they are no longer able to find their consumers. Diffrent payment models don’t address this.
His testimony is not required for passing privacy legislation.
Facebook already has traction, and if push comes to shove can anonymize their data so it is at least still somewhat valuable.
However, the window is closing for any new social networks to get started, because the startup costs are simply too high and you can't growth hack like you used to.
What I am saying is that it is quite reasonable to assume that Facebook will be the last social network out there, that they will survive and no new competitors can emerge. If any hope of competition gets removed, then that benefits FB.
This is very ironic because one the the complaints of the EU against companies like Facebook or Google is that they are monopolies in the advertising space, and then they passed a law that will have the effect of force it their competion out of the market place.
It’s a real shame that no one is really covering this aspect of GDPR.
Are you saying that GDPR puts a limit of between 10 and 500 on the number of companies you share data with, or are you saying that it's impractical to share a constantly changing list of 500 companies with the user?
The latter seems easy to do: Just create a webpage and keep adding the names of new companies. Email a link or the list to the user as needed. Do I misunderstand?
But IMHO that's the whole point, the legislation is a response to users saying that they don't really want such companies to exist - the business practice of taking my private data and sharing it to the world 500 companies will now require my explicit opt-in freely given consent (i.e no "we'll refuse service if you don't consent"). The expectation and intent of this law is that I and pretty much every one else will simply not provide that consent, and that business practice will become impractical and die out, as it should.
“The legitimate interests of a controller, including those of a controller to which the personal data may be disclosed, or of a third party, may provide a legal basis for processing, provided that the interests or the fundamental rights and freedoms of the data subject are not overriding, taking into consideration the reasonable expectations of data subjects based on their relationship with the controller. Such legitimate interest could exist for example where there is a relevant and appropriate relationship between the data subject and the controller in situations such as where the data subject is a client or in the service of the controller."
If you don't have a facebook account for example, you don't have a relationship with them and therefore have a reasonable expectation that they would not be tracking you.
Edit: Granted, the language is somewhat ambiguous and we won't really know how this shakes out until there is established case law later in the year.
I'd imagine most new social networks (if any, the last large social network I can think of Snapchat is 6 years old), will simply try and prove out their network in US first, then hire regulators to figure out GDPR, if the US pass their own GDPR.
Honestly, despite the good intentions of these laws, which I think are good, I think they will just further cement the Google/FB digital advertising duopoly. If you are starting a new social network today, I'd imagine your business model is "capture $demographic that fb poorly serves and get acquired into fb before you become viral in the EU"