One argument he raised in the House hearing was that collecting data on users allowed more targeted ads which in turn made ads more efficient and therefore more economical, which levels the playing field more for small businesses versus large ones in terms of advertising.
However, that is an argument favoring the customer, i.e., the advertiser, not the product, i.e., the user.
During the Senate hearing, he was asked about Ms. Sandberg's comment that if there were no ads then users would have to pay. Mr. Zuckerberg pointed out that users can opt-out of ad targeting/data collection,[1] making the ads they receive more generic and less "relevant", but currently Facebook offers no option for users to pay not to receive any ads at all.
The still unasked question is, "Why not?"
If some users could not afford to pay, as Mr. Zuckerberg suggested in both hearings, then they could opt-in to advertising. How would this affect the business model?
Further, if those users were disappointed at how the ads they were being shown were not "relevant", then they could opt-in to ad targeting/data collection.
1. The default setting is opt-in. As we know, most users do not change default settings.
I have been thinking about what would happen if all browsers had perfect ad blockers enabled by default, starting tomorrow. I think years later we would look back and decide that it was the right thing to do, despite the immediate short-term economic damage.
> currently Facebook offers no option for users to pay not to receive any ads at all. The still unasked question is, "Why not?"
Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.
I think the argument is that more affluent users would be more likely to opt-out, leaving behind less affluent, and therefore less-valuable users, making advertisers desire less and less to advertise at all.
Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.
i m kind of surprised that they have not asked these questions to google. Also:
- Making ads relevant means less ads overall for the user
- It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical
- Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans.
- More generally there is no evidence that subscription users are happier.
But even with the current less targeted option Facebook offers, or say your option of paying:
Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.
What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway.
I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.
If a significant portion of the FB userbase opt-in to not get any ads, then that makes the number of persons that an ad can target smaller, meaning ads would have less ROI for advertizers, driving the ads price down. So, in fact, the more users opt-in to not get any ads, the more the subscription would have to cost.
I just wanna say one thing about this, when I found out that FB was looking to find healthcare data from hospitals and other providers to like to peoples profile it sent the chills up my spine. that is seriously creepy. if something like is available then probability of it being abused is almost 1. right now my facebook usage is fairly low but I'll delete my account for sure if there is any truth to that.
That sounds like an explicit HIPA violation and is very much against the law for both the hospital to share the data and Facebook to do that linking. It sounds tin foil hat conspiracy to me.
I think this op-ed is very relevant to this [1]. There's no doubt the internet companies will aggressively oppose any attempt to pass privacy legislation in the US, but there's no reason why that needs to be all tech companies. Apple, Microsoft, IBM, etc could play a major role in balancing their influence.
A more accurate title would be: the government revenue model is the privacy violation.
Governments cannot be genuine allies of the people against corporate surveillance, and for example, encourage privacy technology like public key cryptography, and client-side encryption, when their primary sources of revenue: the income and sales tax, depend on rampant and overt criminalization of privacy (KYC laws, income disclosure laws, record keeping mandates on the private activity of private citizens, etc).
Spyware and adware 10 years ago were considered extremely shady and unacceptable and certainly not in the mainstream like now with Google and Facebook.
Who would have thought then it would take these shady practices a mere 5 years to transition into the mainstream.
Advertising via textual context and immediate location is ok. Everything else is a dark pattern and incentivizes uncontrolled surveillance, profiling and data hoarding and should automatically be disallowed in a civilized society.
Funny story, i have never seen any ad anywhere in the internet or never clicked on any one for sure. i wonder why product makers pay so much for advertisement to google n fb.
i have seen advertisement in tv when i used to watch tv a lot and am sure i have never bought those stuff jus because they advertised them, most of time we will just swap channels for few mins and advertisement wud b gone away.
And in internet it is very effortless to jus scroll past stuff that we are not paying attention to, i guess i most of the time ended up scrolling thru ads, thats y i dont remember buying anything because i saw some ad.
> Thus, hashing completely fails to address the underlying privacy concerns
I don't understand their argument against pseudonomous identifiers (well, part of the problem is they present it without a lot of argument). Are they arguing that companies will reverse the hash, or that they will de-anonymise it using additional data? Otherwise it seems harmful to me to tell people that using a different identifier per web site is useless (a bit like telling everybody that locking your car is useless because a determined thief would break in anyway...)
An interesting if rather long read. However I’m not sure if your solutions of voluntary donations and cryptocurincies have viability. Voluntary donations have high friction to get a user to start donating (You don’t want to donate to a site you only visit twice and who knows if you will visit the site in the future). Cryptocurincies are unproven at this point.
You also don’t mention how targeted advertising is critical to many small business. If you have niche or specalized product it can be very difficult to find people that want to buy it, you are limited to only places where those people are in high concentrations, it is quite reasonable to expect that the elimination of targeted advertising would quietly erase these business as they are no longer able to find their consumers. Diffrent payment models don’t address this.
With new regulations like GDPR coming online FB's business model is basically kaput. They're going to need to rethink their whole stance if the world follows EU's lead. Given that Zuckerberg was called to testify in front of congress, I think we're probably going to see much more action.
On the contrary, the GDPR helps Facebook. As background, I am a product manager dealing with GDPR issues right now. The requirements are quite onerous, but they are not intractable. I am sure that Facebook, with their army of engineers and lawyers will be able to find a way.
Facebook already has traction, and if push comes to shove can anonymize their data so it is at least still somewhat valuable.
However, the window is closing for any new social networks to get started, because the startup costs are simply too high and you can't growth hack like you used to.
What I am saying is that it is quite reasonable to assume that Facebook will be the last social network out there, that they will survive and no new competitors can emerge. If any hope of competition gets removed, then that benefits FB.
I wish you were right, however, just because a Congress called a hearing doesn't mean a sea-change in laws and practices. Congress looked into personal information collected by the NSA (post Snowden) and consumer credit reporting agencies (after numerous hacks and leaks). Did their business models go kaput? Did anything change in a big way?
AFAICT, there's nothing in the GDPR that technically prevents Facebook from existing. At worst I'd imagine that the GDPR will just kill the Facebook developer platform (or more likely, neuter it beyond usability). All the GDPR does is prevent companies from being fast and loose with user personal information without their awareness - they are still free to monetize it, and I bet the vast majority of the world will still be happy to use Facebook despite what warnings the EU gets to put on FB.
I'd imagine most new social networks (if any, the last large social network I can think of Snapchat is 6 years old), will simply try and prove out their network in US first, then hire regulators to figure out GDPR, if the US pass their own GDPR.
Honestly, despite the good intentions of these laws, which I think are good, I think they will just further cement the Google/FB digital advertising duopoly. If you are starting a new social network today, I'd imagine your business model is "capture $demographic that fb poorly serves and get acquired into fb before you become viral in the EU"
People are bound to be disappointed by the effects of GDPR. FB can reasonably claim that its tracking is necessary for its function , because it is. The stuff they ll have to get rid of is marginally profitable anyway. GDPR is not hurting facebook, instead it's legitimizing its model in the eyes of the consumer by giving it the "stamp of EU approval".
[+] [-] textmode|8 years ago|reply
However, that is an argument favoring the customer, i.e., the advertiser, not the product, i.e., the user.
During the Senate hearing, he was asked about Ms. Sandberg's comment that if there were no ads then users would have to pay. Mr. Zuckerberg pointed out that users can opt-out of ad targeting/data collection,[1] making the ads they receive more generic and less "relevant", but currently Facebook offers no option for users to pay not to receive any ads at all.
The still unasked question is, "Why not?"
If some users could not afford to pay, as Mr. Zuckerberg suggested in both hearings, then they could opt-in to advertising. How would this affect the business model?
Further, if those users were disappointed at how the ads they were being shown were not "relevant", then they could opt-in to ad targeting/data collection.
1. The default setting is opt-in. As we know, most users do not change default settings.
[+] [-] default-kramer|8 years ago|reply
[+] [-] remarkEon|8 years ago|reply
[+] [-] jiveturkey|8 years ago|reply
Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.
[+] [-] pwinnski|8 years ago|reply
Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.
[+] [-] return1|8 years ago|reply
- Making ads relevant means less ads overall for the user
- It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical
- Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans.
- More generally there is no evidence that subscription users are happier.
[+] [-] duxup|8 years ago|reply
Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.
[+] [-] hinkley|8 years ago|reply
What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway.
I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.
[+] [-] glandium|8 years ago|reply
[+] [-] bigiain|8 years ago|reply
The people most able and likely to pay for Facebook are _exactly_ the people Facebooks advertising customers want most access to.
[+] [-] DesiLurker|8 years ago|reply
[+] [-] lotu|8 years ago|reply
[+] [-] IBM|8 years ago|reply
[1] https://www.nytimes.com/2018/04/11/opinion/silicon-valley-lo...
[+] [-] CryptoPunk|8 years ago|reply
Governments cannot be genuine allies of the people against corporate surveillance, and for example, encourage privacy technology like public key cryptography, and client-side encryption, when their primary sources of revenue: the income and sales tax, depend on rampant and overt criminalization of privacy (KYC laws, income disclosure laws, record keeping mandates on the private activity of private citizens, etc).
[+] [-] throw2016|8 years ago|reply
Who would have thought then it would take these shady practices a mere 5 years to transition into the mainstream.
Advertising via textual context and immediate location is ok. Everything else is a dark pattern and incentivizes uncontrolled surveillance, profiling and data hoarding and should automatically be disallowed in a civilized society.
[+] [-] BadassFractal|8 years ago|reply
[+] [-] manjushri|8 years ago|reply
[+] [-] crowbots|8 years ago|reply
i have seen advertisement in tv when i used to watch tv a lot and am sure i have never bought those stuff jus because they advertised them, most of time we will just swap channels for few mins and advertisement wud b gone away.
And in internet it is very effortless to jus scroll past stuff that we are not paying attention to, i guess i most of the time ended up scrolling thru ads, thats y i dont remember buying anything because i saw some ad.
[+] [-] zmmmmm|8 years ago|reply
I don't understand their argument against pseudonomous identifiers (well, part of the problem is they present it without a lot of argument). Are they arguing that companies will reverse the hash, or that they will de-anonymise it using additional data? Otherwise it seems harmful to me to tell people that using a different identifier per web site is useless (a bit like telling everybody that locking your car is useless because a determined thief would break in anyway...)
[+] [-] yuhong|8 years ago|reply
[+] [-] lotu|8 years ago|reply
You also don’t mention how targeted advertising is critical to many small business. If you have niche or specalized product it can be very difficult to find people that want to buy it, you are limited to only places where those people are in high concentrations, it is quite reasonable to expect that the elimination of targeted advertising would quietly erase these business as they are no longer able to find their consumers. Diffrent payment models don’t address this.
[+] [-] known|8 years ago|reply
[+] [-] ianstallings|8 years ago|reply
[+] [-] idoh|8 years ago|reply
Facebook already has traction, and if push comes to shove can anonymize their data so it is at least still somewhat valuable.
However, the window is closing for any new social networks to get started, because the startup costs are simply too high and you can't growth hack like you used to.
What I am saying is that it is quite reasonable to assume that Facebook will be the last social network out there, that they will survive and no new competitors can emerge. If any hope of competition gets removed, then that benefits FB.
[+] [-] mysterypie|8 years ago|reply
[+] [-] nemothekid|8 years ago|reply
I'd imagine most new social networks (if any, the last large social network I can think of Snapchat is 6 years old), will simply try and prove out their network in US first, then hire regulators to figure out GDPR, if the US pass their own GDPR.
Honestly, despite the good intentions of these laws, which I think are good, I think they will just further cement the Google/FB digital advertising duopoly. If you are starting a new social network today, I'd imagine your business model is "capture $demographic that fb poorly serves and get acquired into fb before you become viral in the EU"
[+] [-] return1|8 years ago|reply
[+] [-] rhizome|8 years ago|reply
His testimony is not required for passing privacy legislation.