How Google and Facebook are Making Money from Your Personal Data (And What One Blockchain Company is Doing to Stop It)
Our personal data is extremely valuable, more than most people are aware. It’s used frequently in advertising to target people with the right ads and help marketers make better decisions.
Giants like Google and Facebook have access to a lot of our personal data, since we share so much of our personal lives on their platforms. In fact, people generate more data on Facebook in one day than there is in all the books ever written.
It’s worth a lot of money, too — these two companies are thought to account for 70 percent of all online advertising revenue.
And yet, even with so much gold in their coffers, they’re unwilling to share. Users don’t get any of this revenue, even though it’s directly based on data we provided. It seems unfair, and even like a violation of our privacy.
The good news is that this could be about to change, and some companies are working on building systems where users get rewarded for their data. First, though, let’s take a look at how Facebook and Google make so much money from our data.
Platforms like Google and Facebook have access to all kinds of data. This includes our age, where we live, our socio-economic status, the kind of music we like, what we search for, our political beliefs, and much more.
This data can be used to build up a detailed and accurate profile of every one of us, which is worth a lot to advertisers. It allows them to tailor ads directly to us, maximizing the possibility that we’ll like what we see and click through.
What’s more, Google and Facebook are home to highly popular content and generate enormous amounts of traffic on a 24/7 basis. For advertisers, these platforms are a guaranteed source of constant leads and prospective customers. But the content creators who bring these hordes of people in are hardly rewarded either.
To make matters worse, the system often doesn’t work as well as it should. Targeted ads are supposed to boost advertisers’ profits, but the trouble is, thanks to excessive data sharing advertisers often end up targeting the wrong people.
The result is that ordinary users are bombarded with poorly-targeted spam ads and banner ads. It’s annoying and frustrating to be constantly overrun with ads that aren’t even relevant to you.
It all stems from a disconnect between advertisers and their prospects. Big, centralized companies prevent advertisers from building a relationship with potential customers. It’s hard to target effectively, and not possible to rely on friendlier and more effective modes of advertising like chatbots and push notifications.
The solution could be a move away from centralization altogether, to a system where middlemen don’t make all the money.
The Blockchain Solution
Blockchain technology is ideal for building decentralized networks. That’s why a company called Kind Ads is using blockchain to change the way online advertising works.
The aim is to give data back to its original owners by allowing people to choose who can use their personal data. It’s a fairer, more democratic way to use data in advertising.
Kind Ads are building a blockchain-based ecosystem where users are paid in tokens in return for their data. They get to choose who can access and use their data and specify how much advertising they want to see. Users can even opt out of ads from certain advertisers.
On the other side of the spectrum, it’s a decentralized ad network that rewards publishers more fairly, and takes zero fees from advertisers. And, the users get less intrusive/annoying ads.
It’s a win-win-won for all parties.
While prospects are rewarded for their data, advertisers get a better relationship with them and can target ad campaigns more precisely. This allows them to use types of advertising that aren’t just spammy, generalized banner ads and pop-ups.
They’ll also be able to pay more reasonable fees, without being held to ransom by giant corporations.
Even content creators benefit, as they get to forge a more long-term and intimate relationship with advertisers and can get properly rewarded for the amount of traffic (and profit) they generate.
This kind of system would remove the power from centralized giants like Google and Facebook, and lead to a more effective and less annoying way of advertising. It’s just another way blockchain could transform the way we manage data and help level the playing field for everyone.
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