Even if you're not using Facebook, Facebook is using you
Jesse Hirsh: If you surf the web Facebook has your data.
The only things in the world more popular than Facebook are food, air and water.
The numbers say more than a billion people tap into Facebook every day and that popularity comes with a lot of power. As CBC technology columnist Jesse Hirsh argues, that power is being used in ways that Facebook users may not be entirely comfortable with. And, not being a Facebook user won't leave you free of Facebook's grasp.
Here's a summary of Hirsh's viewpoint from a conversation with the CBC's Conrad Collaco.
Q: What do these new results say about the company?
They have an incredible trajectory and continue to grow. At some point you would think they would reach saturation. Yet they continue to grow in revenues and in users which suggests the hold-outs are caving in or young people are joining as a coming of age ritual. It does speak to a very dominant company. I wouldn't even call it a social networking company. I wouldn't describe it as an advertising company. Rather, they are a data company. Their success at monetizing that data, leveraging that data into all sorts of new products revenue streams is phenomenal.
As it stands, 78 percent of Facebook's revenue comes from mobile advertising. One of the more interesting numbers that came out of these quarterly results had to do with Facebook's pursuit of video. Facebook now has over 8 billion video views per day which is twice they number they had in just April of this year. That indicates their ability to move laterally and mobilize the attention they get from their users into new areas.
They know so much about us that when it comes to video they know so much about which videos we are most likely to watch. That's why they are so successful in this new area.
How is Facebook using all this data it collects?
When they say 78 percent of their revenue comes from mobile advertising, what they're talking about is mobile re-targeted advertising. The mobile side is self-evident, it's mobile ads on your phone. Re-targeted advertising is kind of like stalker advertising. It's those ads that follow you everywhere you go on the web. Those ads are not limited to just Facebook. Facebook as an ad network has all sorts of other publishers who participate as part of the program. Those ads follow you in different places, whether on websites, in apps or in different media. Secondly, you don't have to click on those ads for Facebook to get paid. All you have to do is buy the product.
Even if you bought that product in-store, Facebook still knows. It has third-party business partners and through them it can match spending and loyalty card information to its users and enables it to target people for advertisers. If you have Facebook Messenger installed, are using the app and give it permission, it knows your location. This creates a cumulative effect where Facebook knows when you are interested in something and they can create ads that follow you. They can tell when you bought that in-store and can turn around to the advertiser and charge a huge premium. That's a level of innovation when it comes to tracking and advertising that didn't exist before Facebook.
Facebook, as a data broker, uses its data to sell to advertisers the ability to reach targeted consumer groups. There are all sorts of applications where Facebook data is being used to judge people, to analyze people. One of the more interesting areas is with regards to our credit score. The Financial Times did a study on the way in which credit agencies are using buying and leveraging Facebook data. They will quantify someone's credit score based on their friend's credit scores. Also, the CEO of one of the largest credit rating agencies has speculated on the potential ability of using someone's social media posts as a useful predictor of their credit worthiness in the future. The example Will Lansing of Fair Isaac used was whether measuring how many times someone used the word "wasted" would be useful in how likely that person was to repay his or her debt. There are all sorts of ways people can and are buying Facebook data to evaluate potential prospects.
What about all those people who have left Facebook or never joined? Are they free from Facebook's data mining?
This is the myth. Just because you're not using Facebook, doesn't mean Facebook is not using you. If you have a credit card Facebook, through its business partners, can make use of data about your spending. The same is true if you have a loyalty marketing card. If you surf the web Facebook has your data. Just because you are not using Facebook as a social network it does not mean Facebook is not actively profiling you and tracking your movements via your smart phone. Part of it is the way that "super cookies", cookies that go from website to website, can be installed by a media company that is partnered with Facebook. It becomes very difficult to protect your privacy. If you are a consumer, if you are a web user you fall within their grasp. It's important to note it is possible for users to opt out of many of these features through various settings on Facebook and smartphone apps and limiting use of location services on your phone. Many commenters suggest however, this is onerous and technically arduous.
So, who is going to challenge Facebook on a corporate, commercial level? And, who is going to challenge Facebook on a regulatory level?
Should Facebook be regulated?
It's on the radar for privacy authorities and privacy regulators. It's on the low radar for Canada's competition bureau and the Federal Trade Commission in the United States. The European Union is looking at regulating Facebook and what that would entail. It's early days. None of these agencies have an idea of how they would do it. It's something we need to think about. Facebook's power may or may not be good for the users who are subject to it.
- The article was amended on Nov. 13 to correct mistakes and to clarify a number of points. Specifically, incorrect references to Facebook buying actual credit card and loyalty card were removed; use of Messenger service was clarified about how and when the app can track various factors; how Facebook targets consumers with advertisers was clarified, the comments of Fair Isaac CEO Will Lansing were clarified and a section was added noting the ability of users to opt out of various features to increase privacy.Nov 13, 2015 11:16 AM ET