Facebook recently did a brave thing. In its Initial Public Offering (IPO), it offered shares in itself publicly on a stock market. This allows people it has no control over to assess the value of the company for themselves, which comes in part from estimates of future earnings. Facebook’s earnings, of course, come from the narrowly-targeted advertising that it plants under your nose: because you have shared information about yourself through the site, it knows what you do, where you do it, with whom you do it, and what you like about it. Selling that information is an intrinsic part of its business, as with Google and so many other online businesses.
Last year facebook made over $1billion. The genius of many tech companies today is in monetising non-financial transactions. (picture: CNN Money)
Unless you’ve been living under a rock for the past five years, you’ll have noticed the explosion in the monetisation of Big Data. This has a lot of implications for healthcare, manufacturing and retail, but for the internet it means that online services can be ‘free’ to the user, with the only ‘subscription charge’ being the very data that you give the service in the course of using it. In theory – and this is what Facebook, Google et al. would prefer you to think – you are therefore getting a great service at minimal cost or inconvenience to yourself, while less space on the web page needs to be given to advertising because you’re more likely to ‘convert‘. Advertising works better, people get to connect online. Win-win.
But it is precisely this ‘usage’ of people’s personal data that gets under people’s skin. The lack of anything the user understands as explicit permission, and the (ideally) uncanny relevance of the advertising they see, spooks website users and, at worst, makes them feel violated: ‘how dare the company use this information that I have given them in good faith? I feel like I’m being watched everywhere I go!’
In my opinion, this viewpoint is both naïve and pessimistic. It’s defeatist. It fits a world view in which the consumer is ruthlessly exploited and forever dancing to the tune of the clever corporates, whose ‘big data’ statistics see through the irrationalities of human cognition and sociability and can trap you in their web without you ever knowing.
I’d like to offer a different framework for thinking about this, which I feel is more helpful, proactive and optimistic.
First of all, realise that it’s not an actual human being reading your data or your emails or your searches. It’s a computer that has been programmed with some clever stats and algorithms that improve the more they get used – this is called machine learning.
Second, and more importantly, accept that you don’t ever get something for nothing. Anything that says it’s ‘free’ is lying about it, even if implicitly, or unknowingly. This fact is shocking, perhaps. In the nicest possible way: you need to get over this.
Every social interaction is essentially a transaction. Sometimes – only sometimes – we use money. Money is useful to me because it allows the work I do at my desk in the office to be exchanged for other things like coffee, food and rent. But I also think I tend to only maintain relationships that are helpful, nourishing or inspirational to me, and that I feel I can contribute to in some way. It’s a kind of two-way deal, partly informed by totally irrational but very real and wonderful things like personal affinity or love. If the deal falls down on either side, if one party stops wanting or being able to provide what the other side needs, the relationship won’t keep going for long.
Back to social media, then: if we acknowledge that every kind of interaction is a transaction of some kind, then you’ll only be happy to proceed if you can see or justifiably expect a net benefit for yourself.*
(And yes, this does leaves room for a social conscience. All relationships flow both ways.)
Maybe the question then is ‘how much are your data worth’? …but as this is a personal question, and I’m also writing this late at night, I’m not going to go into it here. The main point is that you are in control of the data you put onto Facebook. Sure, it is a profit-making enterprise so it cannot be said to operate exclusively for the public good, but it can’t make a profit if it has no users. You need to know that when you use ‘free’ website services you are entering into some kind of transaction, even though you aren’t paying money. You need to be happy that it’s a good deal for you, and if not you need to know what to do about it.
Humans are creatures of bounded rationality, which means we have lots of systematic flaws, biases and irrational behaviours. I for one always have awkward moments where I realise we’ve been working against our own interests. We can find ourselves spending hours on Facebook, our attention spans shortening and our personal data haemmoraged into the ether. But if we can train our own rationality and good sense, we can spot when we’re being exploited. We can turn around and protest. We can create ambitions for our own futures. We are not sheep. We are collaborative, planning, physical creatures driven by curiosity and delight. That’s exactly why Facebook is popular.
*there’s a name for this kind of ‘transactional’ world view: more or less, it’s called economics.
EarthmanSam 