How Facebook Makes Money from Personal Data
Facebook is one of the most visited websites on the planet. The social media giant boasts 1.71 billion active monthly users, from all four corners of the globe. It’s likely you have a Facebook profile yourself, as do your friends and family members. When you sign up, you provide personal details and data - which then gets frequently updated by members over the years. As you can imagine, that’s a lot of personal data! And it’s data that Facebook is making money from.
Have you ever noticed the sponsored posts and adverts on Facebook? It’s likely that one or two has caught your eye in the past. Especially as they seem so targeted. If you change your relationship status to ‘Engaged’, you’re likely to see dozens of wedding related adverts. Recently lost your job? Facebook knows about that too. You’ll suddenly see training courses, recruitment agencies, and job postings galore. Targeted adverts are one of the biggest moneymakers for Facebook. By utilising the vast amount of personal data from the 1.71 billion active users, the social media giant can tailor adverts to suit your situation. This type of targeting is extremely beneficial for advertisers, who are willing to pay a premium to ensure their ads get seen by the right people.
According to the Wall Street Journal, Facebook reported a 57% revenue increase in the first quarter of 2016, taking their total to $5.2 billion. With the growing usage of mobile phones for social browsing, the mobile ad revenue accounted for four-fifths of that total. When users log into Facebook on their phone, the social network receives massive amounts of data - including location. This geographical data is invaluable to potential advertisers, as it shows who is in their catchment area. This, paired with the usual personal data shared on Facebook, ensures that mobile adverts command a far higher price than desktop advertisements.
Protecting Your Privacy
According to a report by the World Economic Forum (WEF), 50 billion devices will be connected to the internet by 2020. This means that the amount of personal data stored on the web is also likely to be 44 times larger than it was in 2009. And companies like Facebook will continue to make a fortune from this data. There are ways to protect your privacy online, however. It’s time for you to take charge of your own data. For starters, you can limit what you share on the social media site. While this may take some ‘fun’ out of Facebook, it can also work to your advantage in terms of security. There are also ways to turn off location sharing on your phone, using your settings. This will stop those geographically targeted ads and from Facebook making a pretty penny with advertisers targeting your area.
The key is to be extremely careful what you share with the world, using any kind of social networking service. There is a price on your personal data and Facebook is making sure it gets that price for each of its 1.71 billion users.