In a , we raised many issues about the advertising model and free online services in general. From recurring annoyances to a loss of political power, the range of consequences of data concentration for political and social influence is wide. . previous article They all fall within the spectrum of hidden cost, something society, we, eventually pay for. Behind all of these “free” offers, compromises are made There are many issues with the ad model, all falling under the spectrum of hidden cost. Indeed, behind FB’s “free” offer, a lot of compromises are made, here is a quick overview: ADVERTISEMENT OVERLOAD Considering the online services business model, the (infinite) multiplication of ads inevitable. Indeed, it’s the main way for the actor to maximize their revenues. : More ads -> More views, more views -> more sales, more sales -> more money -> more ads. They are essentially caught in a profitable and vicious circle Since ads are profitable, more and more media space is used to that end. New forms of advertising-content hybrids appeared over the past years, like , The frontier between a media outlet and a brand outlet is progressively fading out. Native Advertising as advertisers are looking for new territory to conquer where the consumer resistance is lower. On the online side of the industry, the sheer size of the actor should be a cause for concern. . With this level of mainstream adoption, the reach is virtually unlimited and nobody is out of scope. Facebook now as 2bn+ users. That’s more than any government, even China or India can’t compete To continue to personalize its ads further, Facebook amasses detailed profiles for most individuals, that can then be used to influence them. Facebook is the most influential medium for political and social causes. Concentrating so much power in one space is obviously dangerous, as it makes the social discourse more prone to manipulation and coercion. Yet , and advertisers are quite generous when it comes to user data. data is meant to be shared COLLECTED DATA ARE LEAKING Indeed, the frequent exchanges between actors in the industry make the data issue widespread and hardly revocable. Whatever the collect point is, the data gathered will eventually be sold to “independent measurement and data company” like Nielsen or Axciom. . Given enough money and resources, anyone could potentially acquire a very detailed file on anybody, including relatives of course. The consumer not only lose control over its data, he also has no knowledge of the usage made of it and who currently owns it The profile is often qualitative enough to let the advertisers and their clients influence opinions, behaviors and ultimately votes. WELCOME IN THE STATE OF SURVEILLANCE The data is not only used for business purposes. Since the beginning of the war on terror, . As monitoring of online services become commonplaces, the novelty now rely on using the data for live facial recognition on surveillance video camera streams many western governments got rid of railings limiting the actions of intelligence agencies and surveillance services The for crowd and individual control is here. As the society gain knowledge over this practice, our behavior “normalize”. toolbox Even if we ignore what the data gathered allow advertisers and governments to do, this simple act of collection is deeply problematic. The simple awareness of knowing oneself observed will push individuals to modify their behavior in response. Because we know we’re watched, we monitor and censor our own behavior. It doesn’t even have to be a conscious process; we’ll simply tend to match the ideals of the watcher — this is called the observer effect. People under scrutiny change their behavior and their choice without even realizing. This phenomenon is present in every academic discipline, sometimes with a different name (Hawthorne Effect). This observation was used by the to envision an institutional building designed for maximum efficiency, the panopticon. Since the watchtower is placed in the center, with prisoners all around, any prisoner can potentially be watched at all times with only one guard. Worse, the prisoners can’t know if they’re being watched or not. He described it himself as philosopher Jeremy Bentham “a new mode of obtaining power of mind over mind”. ADS AFFECT THE VERY CONTENT OF THE MEDIA THAT HOST THEM Advertisements also affect the media that host them. Some of the effects are quite obvious — such as finding the space for ads (ads break, banner…) but the most damaging effects are also the less prominent ones. Indeed, because the content is tied to the , the content creator must follow a . Media are now competing with one another to host ads, and innovate to attract them: product placement, reality shows… ( ) ( ). Millions of people are voluntarily following brand accounts on social networks to receive a healthy daily dose of promotion ( ). advertisement “advertiser-friendly” guideline Publicitarisation — French Everything is becoming a media Depublicitarisation Hyperpublicitarisation In the end, the free supported by ads model is costly. Advertisers are getting close to the media, restricting what can or cannot be said, topics, and schedules. But there is more to it. Once ads are running, in order to retain and increase revenues. Because of ads, diversity and quality of the media are reduced. there is a strong incentive to stay compliant with dominant, advertiser-friendly framework MEANT TO BE BIG As we have seen already, Facebook’s and others main profit driver is . It can’t be balanced, . When Zuckerberg speaks about Facebook’s ideals, and how he wishes to make it more honest and transparent, it’s no more than marketing and PR.On a market where two actors (Facebook and Google) hold more than half of the revenue of the whole industry, what can you do if your ad costs explode? Essentially, you have no alternative. how addicted to their service, to maximize the time spent on it it’s a design flaw Net digital advertising revenue share of major ad-selling online companies worldwide from 2016 to 2019 THE EDGE OF SCALE I’m not pleading for breaking down Facebook or Google. The result would eventually be the same a few years down the road. Indeed, . Behind the “big data” or whatever name they give to it are basically two things: because of their business model, the GAFA are meant to be giants Building a robust system to collect data on consumers, organize it, tag it, and clean it. Selling the data after a form a processing (building audience). . For data collection, the bigger you are, the more present you will be which in the end multiply the opportunity to collect new data points. The ideal scenario here would a quasi-monopolistic situation where people can hardly avoid using your service (Hello Zuckie). Both those activities benefit hugely from scale When it comes to reselling data, once again size does matter, a lot! . The bigger the dataset, the more people they cover, allowing the data reseller to reach new markets. Simultaneously, each new data point collected on a given individual allows the reseller to charge more, because of the precise targeting and personalization it allows. Datasets scale twofold, both in terms of quantity and quality Finally, as the dataset covers more and more people, new correlations can be found, which in turn increase the amount of information available in any given person present in the dataset. What it means, in an economic sense, is that : each time Facebook register a new user, it benefits twice from it First, it will increase its total amount of (active) user, which is the base multiplier of FB’s revenues. Secondly, because a bigger dataset allows drawing more insightful analysis, more for each data point it already has on one. FB is able to increase its revenue per user (ARPU) Facebook’s ARPU, 2015–2017 The ARPU (Average Revenue per User) is an interesting metric to look at. It gives you an idea of The ARPU is also strongly correlated on how detailed the database is. how much money Facebook is actually able to extract from your data. A high ARPU could then indicate that Facebook has a very detailed file. With an ARPU of $26+ for the US and “up to 5,000 data points on 220 million Americans”, it seems to match. Ultimately, the ARPU is an indicator of the extent in which Facebook can be used to influence a population. If we look at the growth of Facebook’s ARPU, it has been on exponential growth over the last four years. Once again, the real word seems to confirm the observation, as the role played by Facebook keep getting more important with each new ballot. Facebook’s average revenue per user as of 4th quarter 2017, by region (in U.S. dollars) . Google and Facebook together are the biggest source of traffic for most websites. , the World Socialist Web Site, . GAFAs are now the gatekeepers of the information online and make calls about what we see or not. Because of their size, their decisions have tremendous impacts on society. GAFAs are now so big that each of their decisions has huge impacts When Google slashes incoming traffic by 70% to a 20 years old left-leaning website — French it is a political action with real consequences on the political life of the country Now that we know about Facebook and other online services data collection practices, it’s time call the shots: Do we keep sacrificing our political power on the altar of convenience, or should we build our own decentralized social network services framework to prevent control and manipulation from hostile parties? Screenshot from website essentia.one The blockchain opened a range of new options to build decentralized institutions we can trust. Some solutions, such as (featured above) are already working. We’ll see radical alternatives emerge over the upcoming years, Essentia.one it’s up to us to make the best of it. Let me know if you liked this article and you can keep pressing 👏up to 50 claps. check out my wiki for more content like this. 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