Facebook, Where You Are The Product.

Facebook is all about data-mining.

Anyone who has been halfway attentive is well aware of that fact that Facebook has turned the status updates and conversations of its users into a smorgasbord of advertising revenue. That is about to be taken to a new level as Facebook provides yet more data to help marketing folks target products and services through what is being call “Topic Data”.

A quick glimpse at Facebook’s revenue model.

If you discuss certain topics, then the Facebook advertising algorithms adjust the advertisements you see. It’s frankly brilliant; perhaps borderline devious, but brilliant. The important thing to remember with Facebook (or any other social media) is that you don’t own your content, the company providing the service does. Therefore they have a permanent record of how you feel on Mondays after a 3 day weekend or when you signed onto Facebook after the daylight savings time change. Additionally, when your credentials are signed into Facebook there are a slew of methods for them to see what sites you browse that have “Like this on Facebook” buttons on them, etc.

For Facebook, it’s all about the data and metadata. The thing is so many people ransom off their privacy in exchange for a little convenience. It’s super easy to sign into Facebook and share a quick, sometimes meaningless tidbit of information with however many hundreds or thousands of Facebook friends you have.

The roughly 1.4 billion Facebook users are generating a lot of content that is incredibly valuable for marketing research. Facebook users are generating a lot of content but are they, statistically speaking, saying anything meaningful with that content? I suppose that’s neither here nor there for this discussion and as far as Facebook is concerned it doesn’t matter as long as there is “crunch-able” data that can be fed into the advertising system.

Dollars and sense.

In its Q4 2014 earnings disclosure, Facebook detailed its daily user totals of around 890 Million. A few slides further on they showed that [bctt tweet=”Facebook’s ad revenue for Q4 2014 was $3.59 billion.”] (Source) Facebook of course would like that number to be even higher and so they have been working on new algorithms and methods of more effectively targeting consumers with advertisements. The latest of these is “Topic Data”.

Topic Data in a nutshell

Topic Data is a new service that Facebook is selling, in which it will aggregate all the data surrounding a topic and passing that data along to advertisers. A few examples they give are:

  • A business selling a hair de-frizzing product can see demographics on the people talking about humidity’s effects on their hair to better understand their target audience.
  • A fashion retailer can see the clothing items its target audience is talking about to decide which products to stock.
  • A brand can see how people are talking about their brand or industry to measure brand sentiment.

All personally identifiable data is scrubbed before the aggregation, so if true, that’s at least pretty decent. I don’t have any particular distaste for this new method of gaining topical insight into the existent user data, per say; I just don’t like the idea of being another personal revenue stream for Facebook.

You’ve gotta’ keep the lights on

I’ll admit that advertising is a huge part of the web, I mean heck I run some ads here on this page to pay the bills for this site. There is however a big difference between hosting a few ads and data-mining your users communications and browsing habits to squeeze that much more revenue out of them. At the end of the day, Facebook users have been and continue to be monetized and their data is Facebook’s to keep for whatever analysis it wants to perform on said data, now or in the future.

I’m not telling you not to use Facebook, but never forget that you and the data you share with them are their products now and in the future.

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