If the service is free, you are the product

If the service is free, you are the product - article by Chip McCraw

We’ve witnessed a little hyperbole, hand-wringing, and uninformed political posturing in recent days about data breaches and online privacy. The latest, and surely not the last, has Facebook squarely in the cross-hairs. But I think some of us are overreacting a bit.

If the service is free, the customer is the product.

That’s an old saying often attributed to the IT community. Not much is free in this world; somebody has to pay for everything. (After all, the lights have to stay on and web hosting providers aren’t charities.)  Facebook and other “free” social media juggernauts are paid for by ad revenue. That’s why they can be free to us users. Therefore, the users are the “product” being sold to advertisers. That’s never been a secret. I’m just surprised that anyone is surprised by that.

Generally speaking, nothing you do online is private. I completely understand there are necessary exceptions like your financial records, etc. But what you do on Facebook (the hotel you stayed at last night, what you ate, what you like, how much you hate the president, etc.) by its very nature, is very public.

So my unsolicited advice, with all due respect, is get over it. Here’s why:

If you post something online, it’s now there for advertisers and everybody else to see. If you don’t want everybody to know it, don’t share it online. Even if you answered questions in an online quiz, did you really think your answers would be private? It would be terribly naïve to think so. But I firmly believe it all can be a good thing.

As a marketing person, I love it.

I can spend my limited advertising dollars much more efficiently by targeting an audience that’s likely to respond to my message. Who doesn’t want to use their money wisely and effectively, and get the best possible return on their investment? Granted, I don’t need or want your name, phone number, or address in order to do my job. (That information is easily findable online in public records if somebody wants it badly enough, though.)

But if I can find out that you have a greater propensity to buy what I have to offer – without prying into what’s truly private – then I can try to engage you with something that’s more likely to resonate with you. I don’t waste my budget and risk annoying a lot of people by getting in front of folks with zero interest in my product or service.

As a consumer, I love it.

I really don’t need to see ads for industrial supplies or Japanese beauty products, but I just might be in the market for new tires or stock images for a website. I appreciate seeing ads that are actually relevant to me instead of just random noise. It’s a better experience for everybody.

My wife figured out the game and now plays it to her advantage. A while back she wanted a new cell phone cover. Instead of buying the first thing she liked, she did a Google search for cell phone covers, clicked on some of the results, and then waited. In fairly short order, ads offering better deals on cell phone covers started popping up in her Facebook feed and following her around as she moved on to other sites. She got what she wanted, and at a better price.

That’s at least partly due to a practice called remarketing (or retargeting, depending on who’s talking). Marketing professionals understand that 96% of visitors don’t convert to buyers the first time they visit a website. Remarketing is an effective way to connect with people who have already shown interest in their product or service as they browse elsewhere.

We can fret over the illusion of online privacy, delete our social media accounts, and try life off the grid. More power to you if that’s what you decide. I’ll miss you on the interwebs.

But the better approach, in my opinion, is to do our homework and understand the technology for what it is, beef up privacy laws as necessary to close real holes, and take ownership of the information we put online. In doing so, we can leverage that information to create a better experience for ourselves and the people we choose to do business with.

Now it’s your turn. How are you dealing with online privacy?

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