Co-Founder & CEO
This is not a post about data ownership, the ethical dilemma Facebook is navigating, or Russia. Those have been covered ad nauseam and I don’t believe they’re the problem.
I’ll also avoid the adage “if you’re not paying for it, you’re not the customer, you are the product being sold.” While it’s true, there’s nothing constructive to be found there. We’re not going to pay for Facebook.
The pundits and bloviators need to quit focusing on the symptom(s), shift their perspective, and ask a bigger question: why aren’t users getting paid for using Facebook?
As the CEO of an ad network, this seems obvious.
Most ad networks work like this: an advertiser says they want their message in front of X people (or impressions), the ad network finds the desired audience, purchases those eyeballs from publishers, and facilitates the ad display.
Nike might pay $3, the ad network finds matching traffic at the New York Times website for $2, and the ad network keeps $1 for playing match-maker. A simple arbitrage.
In this lens, Facebook is playing both ad network and publisher.
There’s a material difference that hasn’t been accounted for: while the New York Times hosts and produces content, Facebook only hosts. Facebook users are producing the content while the social network uses that content (and the impressions that come from it) to serve ads. The users should be compensated for that effort.
You might say that’s the toll we pay for using the Facebook highway — a fair point — but we need to ask why that toll exists at all.
Facebook has bills to pay in order to provide these roads at all. Fair enough.
But why not cut us in on the action?
While the numbers are hard to distill, my best guess is that the American daily-use Facebook user sees 150 ads per day on that channel alone, about 4,500 each month. Given an average CPM of $7.34, that’s $396.36 per year that I believe Facebook should be letting us in on.
I have a feeling an extra $400 per year might stop the barking about Facebook using user content and data to serve ads.
I don’t fault Facebook for how they’ve arrived at this point—the website never intended to be an ad platform or network, and everything I hear in interviews indicates they want to avoid that label, but that’s truly what its become and it’s time to start acting like it.
With that in mind, I’ll lean on another tired quote as a word of caution for Zuck & Co: “Even if you’re on the right track, you’ll get run over if you just sit there.”
Andrew J. Chapin is the Co-Founder & CEO of Benja, head of the benjaCoin token project, author of Art of the Initial Coin Offering, and a token advisor for several projects. This November, Andrew is running the New York City marathon for Athletes to End Alzheimer’s.