Monetising data on social media

 

Social media is constantly changing. The service that started out as a fun way to keep in touch with our friends has turned into a massive business that revolutionised almost all aspects of marketing. But while some changes are small and may even go unnoticed by users, a couple of recent developments have left people reeling.

 

Like the monetisation of user data.

 

 

Data on Facebook

Facebook, like most other social media services, is free for users. Instead of membership fees, the platform generates a large portion of its revenue by charging businesses a fee for advertising. In 2023, ads earned $118.96 billion for the company, and that figure is projected to reach $127.27 billion by 2027.

 

Compared to classic forms of advertising like TV and newspaper commercials, social media has something very special to offer: the option of personalisation.

 

Since each user’s journey on social media platforms and the internet generates data, companies with access to this data learn a lot about the user’s personal preferences and interests. This allows them to create precisely targeted ads with a much higher ROI than a general billboard poster or TV commercial.

 

No wonder that some analysts have started comparing the importance of data in the 21st century economy to that of oil in the 18th century. But while oil gives you power in general, data lets you have power over the person whose data you’re viewing.

 

This is why lawmakers all over the world are trying to regulate the processes of collecting, storing and using digital data. For example, this is what the GDPR rules in the EU are all about.

 

Find out all about the EU’s efforts to regulate digital services!

 

Following heavy scandals of data breach and misuse, social media platforms, including Facebook now provide their users with more information about how their data is collected, stored and who has access to it.

 

And how to use it as a form of payment.

 

Related topics

The Meta Verified subscription package explained

 

A bad influence: fakes promoted on social media 

 

Fake Ads on Social Media

 

Paying for Facebook with your data?

As of late 2023, Meta introduced a new option to its European users. For a monthly subscription fee, people can opt out of seeing ads on Facebook and Instagram. At a first glance, this move is only about ads and giving users the option to stay ad free. However, since those ads are based on users’ data, the new option has a far deeper meaning.

 

Namely: users can either pay for their Facebook account with money, or spend their data as currency.

 

Take a look at the screenshots below where Meta attempts to explain the situation to its account holders. Received by a user in Germany, here’s the text of the screenshots (translated by globaleyez).

 

“Would you like to take out a subscription or would you like to continue using our products with ads for free? Due to changing regulations in your region, we now offer you the option to decide if we’re allowed to use your data for ads. Before you make a decision, we’ll explain to you the available options in detail.

 

Subscribe and enjoy our service ad-free

 

Take out a subscription package starting at 12.99 Euro/month and use your Facebook and Instagram accounts without ads. We won’t use your data to show you ads.

 

Free accounts with ads

 

Discover new products and brands via personalised ads and use your Facebook and Instagram accounts for free. We use your data to show your ads. This is your current setting.”

 

Screenshots of a notification a user in Germany has received from Facebook

 

 

The first screenshot also contains a link for users to see which of their accounts are affected.

 

As you can see, Meta chooses to comply with EU regulations by offering users the option to pay for their privacy. Data privacy advocates at noyb believe this move is illegal, as people can’t be expected to pay for their fundamental rights and have made an official complaint to the authorities.

 

According to noyb’s research, only 3-10% of people want personalised ads, yet 99.9% consent to them when faced with the choice of free vs paid accounts. No wonder: if other providers start following suit, an average internet user could pay around 8,800 euros per year for their fundamental right of data protection.

And other providers have started following suit: TikTok is testing an ad-free subscription model, while German news portal OnlinehändlerNews has already started offering the option to readers.

 

 

Screenshot of https://www.onlinehaendler-news.de/ displaying the choice of free reading with ads on the left hand side vs. an ad-free subscription of 3.99 euro per month on the right

 

It’s easy to see why this is problematic for households. How much will data protection and privacy cost users? Can data protection turn into a privilege only available for the rich?

 

While we await news on the complaint, it’s worth taking a look at the issue from the advertisers’ point of view.

 

As remarked earlier, the allure of social media advertising lies in its considerable personalisation capabilities. Should a lot of users opt for paid subscriptions to evade ads, the size of advertisers’ audience would diminish.

 

This would mostly affect brands targeting consumers in higher income brackets, who, in theory, would be more likely to spend money to protect their privacy. In that scenario, luxury brands will need to find other ways to reach their target audience.

 

Less ads may also mean less fraudulent ads, which is certainly a positive development from an online brand protection point of view.

 

However, it’s quite unlikely for fraudulent ads to disappear altogether. Luckily, we have a solution for that.

 

 

Online brand protection on social media

We developed our social media monitoring service to detect IP infringing content including posts, ads, product listings, etc. on social media platforms like Facebook and Instagram.

 

Since fraudulent sellers tend to use several channels to maximise their reach, we also recommend a round of image monitoring to find other outlets of the same sellers, and to uncover potential connections between seemingly unrelated cases of fraud.

 

And since we’re talking about Meta, we can’t fail to mention its brand protection tools that come in very handy when we’re investigating and eliminating IP infringement cases on Meta’s platforms.

 

Find out all about Meta’s Brand Rights Protection programme

 

Finally, we offer to enforce your rights and demand the removal of the infringing content from the internet.

 

 

Conclusion

How Meta’s new European subscription packages stand the test of time remains to be seen. One thing we can be sure about though is that fraudulent sellers won’t contend with the option of reduced ads and will try to find a way to reach as many customers as possible.

 

Don’t let fraudsters infringe on your IP rights; contact us and let’s set up an effective strategy against them.