Whats the big deal?

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Not too long ago Facebook's CEO, Mark Zuckerberg, and appeared in front of Congress to speak about concerns surrounding data usage and protections. Many people were upset to find out that Facebook profits from the data it collects from its users, while others wonder what the big deal is. There are also those that wonder how money is made with this data.

In general, most legit companies that make money on the data they collect from users are not profiting off of personal identifiable information (PII). PII is information that uniquely identifies you like your social security number or address. The data that is generally collected can range from things you spend the most time reading to what links you click on. Some sophisticated organizations use algorithms to analyze the things that you post to predict certain behaviors or emotions. To the majority of the world these are data points that hold no meaning, but this is gold to advertisers.

Most businesses create a line item in their budgets for advertising and marketing. These same companies hire very smart professionals to fill those roles, and their sole purpose is to ensure that whatever product or service the business provides sales. What if a business could give these highly skilled professionals the tools they need to meet the sales objectives of the business? Those meaningless data points provide information to these professionals to create campaigns to help drive sales. No longer are the days of questionnaires and focus groups to help tailor ads to certain demographics. Now this information can easily be solicited from companies like Facebook, who have the abilty to collect the data you need.

Its obvious that the advertisement space helps generate revenue, but the data those ads generate can also be useful. This provides insite on users of different age groups, locations, gender, nationality, and religions are interested in. All of this information is volunteered by their users, and provided for free for using their platform. This is how so many app developers can afford to provide a product for free. Without those advertisement or data collection capabilities, it would not be profitable to spend so much time developing a product just to give it away for free.




 

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