15 Mar The Price of Free
With the rise of social media there has been a correlating rise in targeted advertising. Every day more people are signing on to new social networking sites and mobile usage has increased exponentially.
Social media platforms have access to incredible amounts of user data. With this information they are able to build out a detailed understanding of consumers’ demographics and preferences. Although users have grown accustomed to accessing social networking sites for free – social network providers have found a market for the user data they collect and businesses willing to pay for it. The availability of this information allows advertisers to target consumers more effectively based on individual likes and dislikes and personal trends and industry has demonstrated a willingness to pay for this information to better understand their customers.
Lately I’ve noticed an increase in controversy and sensitivity about this subject all over the internet.
The problem? People don’t want companies like Google and Facebook to have access to their information. The argument against targeted advertising seems to be that analyzing personal information is a violation of privacy and a breach of trust.
The reality of these platforms being free for their millions of users is that it comes at a price. In order for them to provide free social media and still make money, they must find other ways to sell advertising and that isn’t changing any time soon.
Big data analytics from social media are being used to reinvent advertising. Instead of a wide range campaign where advertisers blast the largest audience possible, they are now modifying that theory for precision targeting of likely consumers. Using data from social media, companies can efficiently identify who the target consumer is and use channels to reach them as easily as possible. The fact that industry is willing to pay big bucks for this data is a testament to how important it is for them to understand there customers.
While many people may feel that companies like Facebook are trying to spy on their customers’ lives and collect private/personal information, the fact is that they are more interested in understand customer preferences and buying trends and have little interest in private messages. In fact, Facebook recently went to the mat with the US Government in an effort to protect personal data – of course they probably were just as interested in protecting their own ability to protect their business interests.
In my opinion targeted advertising isn’t the worst thing in the world. The ads are going to be there no matter what and I would much rather see ads for BirchBox, Bauble Bar, and J Crew all over my Facebook than have to pay for social media services or see the quality impacted. Businesses are going to continue to grow and expand the use of technology but someone is going to have to pay for the price of being free.