How much is your data worth to facebook
What Your Data Is Really Worth to Facebook
Americans who use the internet—85.5 percent of us—have made a tacit bargain with Facebook, Google, MasterCard, Verizon, and most other sites and products we use regularly. We get access to these companies’ services, and they get to scoop up, analyze, and sell our personal information. Few people question this setup, perhaps because most of us assume that our data isn’t worth much.
But that assumption is wrong.
Earlier this year, my colleague Siddhartha Aneja and I published a deep-dive study into the value of the personal information that every major website sells access to. It’s a complicated problem. Much of the value comes from advertising revenue, disclosed in annual reports and SEC filings by public companies. But we also had to determine how much of that ad revenue is derived specifically from the micro-targeting that user data makes possible, as well as how much the companies spent to gather, analyze, and market user profiles. In the end, we calculated that internet companies earned an average of $202 per American internet user in 2018 from personal data. We believe that’s a conservative estimate.
The value reflects the extraordinarily varied and detailed data that companies collect. Google collects not only the personal information you reveal when you use its search engine, but also the data that comes from whatever you do when you visit or use any of its dozens of properties—YouTube, Gmail, Google Maps, the Chrome browser, Google Pay—or apps accessed by logging in through Google. Similarly, Facebook gathers all the data crumbs you leave whenever you visit the site itself or use its Messenger service, plus whatever you do on subsidiaries like Instagram and on apps accessed by logging in through Facebook.
Amazon is newer to this business, and unlike Facebook and Google, its basic business model doesn’t rely on data-derived profits. But Amazon’s public records show that its earnings from user data likely more than doubled between 2016 and 2018.
Beyond the major platforms, hundreds of other companies take part in the burgeoning personal data business. Our study also explored the revenues from digital advertising earned by smaller internet services, ranging from Snapchat and Spotify to internet media holding companies such as IAC, which owns Match.com, the Daily Beast, and Investopedia.
For a general sense of the value of people’s personal data to these companies, we started with digital advertising revenue. In 2018, Facebook earned an average of roughly $110 in ad revenue per American user. This calculation, however, ignores what it costs to collect, analyze, and market user data. According to the balance sheet on file with the SEC, Facebook earned $55.8 billion worldwide in 2018, virtually all of it from targeted advertising. Facebook also reported that relevant costs came to $20.6 billion. That implies that the value of its users’ personal information was equivalent to $35.2 billion, or 63 percent of Facebook’s earnings.
Imagine the profits General Motors could achieve if it didn’t have to pay for the steel it uses to build cars. Like GM, online companies should pay their users for the valuable raw materials they provide.
In other cases, determining a company’s data-related costs is less straightforward. Google’s cost data, for example, is embedded in the balance sheets for Alphabet, the holding company that also includes Google Fiber, GV (former Google Ventures), CapitalG, Waymo, and Google Deep Mind, as well as the suite of Google-branded internet services.
Given these issues, we developed a proxy to distinguish the value of personal information to the online platforms and the costs to gather and monetize those data. We relied on a careful study by three business school economists who analyzed certain aspects of the Ad-Choices program created by the online advertising industry. In 2010, AdChoices announced that anyone could opt out of all targeted online ads by registering at a special website.
While relatively few internet users opted out, the researchers found that those non-targeted ads produced 52 percent less revenue than comparable targeted ones. This suggests that 52 percent of digital advertising revenue is derived from the personal information used to target those ads to particular individuals.
Since targeted online advertising generated $108.6 billion in overall revenue in 2018, on this basis we estimate that the profits derived from American internet users’ personal data totaled $56.5 billion. Some 279.7 million Americans used the internet last year, so the value of their personal data to these online operations, after costs, came to an average of $202 per American internet user.
Our personal information is worth so much because the profiles created from it are remarkably probing and detailed. Algorithms track and save data on what we search for, what we write in emails and messages, what we buy, and everything else we do online, whether on our phones or laptops.
Not only do the algorithms then build up a basic profile based on gender, age, ethnicity, and so on; they also determine our individual interests, likes and dislikes, family background, political leanings, sexual orientation, and much more. Everything we reveal online is fair game.
As the software for data mining and targeting has advanced, the revenue from digital ads and the consequent value of the data used to target them have risen rapidly. Our study found that from 2016 to 2018, the value of the information Google mined from Americans grew 40 percent; for Facebook, 85 percent; and for the latecomer Amazon, 312 percent. Overall, the value internet companies derive from Americans’ personal data increased almost 54 percent. At that rate, the number will reach $127.9 billion in four years. Adjusting for the estimated increase in the number of Americans using the internet, people’s personal data will be worth an average of $434 per American user in 2022.
Given how profitable these data operations are, the practice is sure to spread, and the commercial, social, and other uses of our personal data—and the related side effects—will proliferate.
In response, we can try to regulate it, but we shouldn’t be surprised when tech companies figure out how to deflect or defeat such regulation.
Instead of regulation, then, we should consider a more direct economic response. Imagine the profits General Motors could achieve if it didn’t have to pay for the steel it uses to build cars. Like GM, online companies should pay their users for the valuable raw materials they provide.
Behind this proposal is the principle that people have a property interest in their personal information, or at least in the wealth generated by that information. This theory does not depend on any particular position on privacy. Rather, it comes directly from John Locke’s analysis of the origins of property, which are embodied in the U.S. Constitution. Locke said that a person can create property by mixing his or her labor with materials from nature, because each of us has personal ownership of our own bodies and minds and, therefore, of whatever we produce by using our minds to direct our bodies.
Every piece of personal information online companies gather, analyze, and sell is the result of that very same process, so it meets Locke’s test for personal property. Someone can persuade you to give it away—but if they mislead you about its value to them, either you’re a sucker or they’re a fraud.
Congress should recognize people’s property rights over their personal information and direct that internet companies do so as well. It’s true that the structure of the internet complicates the analysis, because the value of one person’s personal information to an online platform is bound up in the platform’s access to the personal information from many millions of other people. Economists call this a “network effect.” Just as Facebook’s value to any individual increases as more people use it, so the value of any individual’s personal data to Facebook and its advertisers increases as Facebook gathers and analyzes data from millions of other users.
In other words, internet companies and their users both contribute to the commercial value of the personal profiles that drive digital advertising.
A straightforward solution is thus to require the companies to share the profits from those operations with users on a fifty-fifty basis. Of course, asking internet companies to write a check to every individual user would be impossibly inefficient. Instead, each company could write a single check to the government, and the government could distribute the proceeds to every household based on the number of its internet users. So, in 2022, a family of four internet users would receive $868 in payment for their personal data. The era of free riding for online companies would be over. Corporations have gotten rich by exploiting our data. It’s time for them to share the wealth.
This is how much money Facebook earns from your data each year
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Facebook may be free to use, but the trade-off isn't just annoying adverts: your data is being harvested and sold for way more money than you might imagine.
By Jim Martin
Executive Editor, Tech Advisor
Most people – and I don’t think I’m going out on a limb by saying this – understand the basic transaction that happens when you use free web services such as Gmail and Facebook.
They certainly aren’t free to run: it costs a lot of money, from the servers and storage to staff, offices and beyond. When you sign up for a free account, you accept the terms of service which, of course, you don’t read. Who does?
Those terms usually explain – in hard-to-understand legalese – that in return for letting you use the service for free, you allow the company to sell your data to other companies. That, along with all the adverts which pepper your inbox or social media feed, is what pays to keep these services running.
The data can be obvious stuff like your name, address, gender, age, marital status. But data can also be your current location, the make and model of the device you’re using, how long you spend using the service and even more detailed information than that. Companies will pay good money to know your search history, which products you’re thinking of buying, where you’re planning to go on holiday and then advertise those things to you.
None of this is likely to be news to you because, no sooner have you looked at a pair of shoes, there’s an advert on your Facebook feed for those exact shoes.
What you probably don’t know is just how much all that data about you is worth. Data privacy company LetAlone says people are blissfully unaware that Facebook, for example, earns up to US$900 per year (around £670) by selling each user’s personal information to other companies.
This past week, it surveyed 1000 adult Facebook users in the UK and found that, on average, they would want only £250 per year for that data. But, of course, they’re effectively giving it away for free.
The research found that over half of the respondents – 57% – were shocked and angry that data was being shared without their permission, and 40% were “furious” that Facebook – and other platforms – could sell details such as where they live and work.
The truth is that they have granted this permission; even if they’re unaware they’ve done so.
This is why it’s important to read what you’re agreeing to when you sign up for any account.
With 42 million Facebook users, Facebook makes around $37 billion per year from its UK users alone.
But new companies like LetAlone are popping up which promise to help you control what happens to your data, and get a share of what it’s worth.
This doesn’t help you with Facebook or any account you’ve already created because you’ve already signed away your rights to that data. It’s also pretty much impossible to get that data deleted and all you can do is to close your account and stop using the service in question.
Existing privacy and security software such as VPN and antivirus doesn’t help either. When you log into Facebook, a VPN can’t make you anonymous: you’re telling Facebook exactly who you are.
And even if you don’t sign in, fingerprinting techniques – using many of the details mentioned previously such as the model of iPhone you’re using and lots of data supplied by your web browser, such as screen size and resolution, can identify you from every other user so your activity can still be tied to you and the resulting valuable data sold on.
LetAlone reckons all this should change and that users should be able to see what data a company has and be able to choose whether information is sold on or not. And if it is, they should get paid for doing so.
Laws such as GDPR in Europe and CCPA in California are already helping to ensure data is managed and used appropriately, but this is no guarantee your data will remain private. There’s already a catalogue of companies which have been hit with huge fines for breaching such laws, including €50 million for Google (it failed to make data processing information easily accessible to users), €32m for H&M (which was secretly monitoring employees), £20m for British Airways (for a data breach involving 400,000 customers) and over £18m for Marriott Hotels (for another leak due to hacking).
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Author: Jim Martin, Executive Editor
Jim has been testing and reviewing products for over 20 years.
His main beats include VPN services and antivirus. He also covers smart home tech, mesh Wi-Fi and electric bikes.
On Saturday d the data of 533 million Facebook users were published on a hacker forum. Almost 10 million of them are personal information of Russian residents. How do you know if your data was among them and if hackers can hack into your account? Use this guide published by Fast Company.
Elon Gal, CTO of cybersecurity company Hudson Rock, was the first to notice the massive data breach. According to him, the database contains full usernames, phone numbers, Facebook IDs, addresses, dates of birth, biographical information and email addresses.
All 533,000,000 Facebook records were just leaked for free.
This means that if you have a Facebook account, it is extremely likely the phone number used for the account was leaked.
I have yet to see Facebook acknowledging this absolute negligence of your data. https://t.co/ysGCPZm5U3 pic.twitter.com/nM0Fu4GDY8
— Alon Gal (Under the Breach) (@UnderTheBreach) April 3, 2021
Mark Zuckerberg. Zuckerberg's user ID on Facebook, his phone number, address, marriage information got into the public domain. In addition, data from two more co-founders of the social network, Chris Hughes and Dustin Moskowitz, were found in the merged database.
According to Fast Company, the scale of the leak means that about one in five Facebook users were affected by the leak, and there is about a 20% chance that your data was leaked to the network.
There is currently no special tool that will allow you to quickly find out if your data was in the merged database, but there is a workaround how to check this, the publication points out.
Use this instruction:
01
Go to HaveIBeenPwned.com
02
Enter the email address you use for your Facebook account and click the "pwned" button
03
databases merged into the network
You can also subscribe to notifications on the site in order to quickly receive information if ever your address still appears among the data leaked to the network.
At the same time, even if your e-mail has not yet been found in the merged database, the publication's expert advises changing your password on Facebook and be sure to enable two-factor authentication.
Even though the passwords are not believed to have been leaked along with other Facebook data, it is still possible for hackers to break into your account.
If an attacker has your email address associated with your Facebook account, he can pick up a password (especially if it is simple enough and does not consist of a completely random set of letters and numbers) to hack into your account.
How to protect your personal information on Facebook
- Jane Wakefield
- Technology Correspondent
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Image copyright, Getty Images
Image caption,People are increasingly wondering what social media knows about them
The Cambridge Analytica scandal, which is accused of abusing the personal data of 50 million Facebook users, is again made us think about what information about ourselves we trust social networks - and who gets access to it as a result.
For Facebook, our personal data is like oil: it is the users of the social network that attract advertisers, that is, they allow it to earn money.
It's no secret that Facebook has the ability to create a detailed profile of any user: what he likes, what he doesn't like, what kind of lifestyle he leads and which politicians he perceives more favorably.
- Facebook CEO Mark Zuckerberg is being questioned in the US Senate. And not only
- British authorities demand access to the servers of the company that collected data for Trump
The question is who can have access to this data - and what can we do to regain control of our personal information and limit its distribution.
How would you look like as a Hollywood star? Click here!
Image copyright, Getty Images
Image caption,Cambridge Analytica CEO Alexander Nix said the company used data from "Facebook surveys"
true inner world or try on your photo the image of a glamorous movie star.
One such test was used by Cambridge Analytica to collect data from millions of Facebook users. It was called "This is Your Digital Life" ("This is your digital life").
Many of these tests come with assurances that your personal data is safe.
They are specifically designed to grab the attention of users and get them to click on the link, but often this is just a ploy to collect data in bulk - and Facebook rules allow this.
According to data protection organization Electronic Frontier Foundation, the use of such tests to collect personal information reflects "the way Facebook's policies were formulated at the time."
Since then, Facebook has changed the terms of the user agreement, narrowing down the information that third parties can access. In particular, now it is impossible to get information about the friends of a particular user.
Although it has not yet been conclusively established exactly what information and to what extent Cambridge Analytica managed to get hold of, this is now being investigated by the British authorities.
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What can you do to protect your information?
- Log in to your account and go to the "App Settings" menu
- Click the "edit" button in the "Apps, websites and plugins" menu
- Select the "deactivate platform" option
By doing so, you will disable access to your account for all third-party sites, programs and applications - in particular, you will no longer be able to authenticate with Facebook there.
If this is too drastic a step and you don't want to completely disable applications, but only limit their rights, leaving access to only the most necessary information, there is another option.
- Log in to your mobile account and go to settings
- Turn off one by one all categories of information that you do not want to give the application access to: this can be your biography, birthday, family members, religious views, whether you are online, posts on your page, your hobbies and interests
Image copyright, Getty Images
Image caption,The more time you spend online, the bigger your digital footprint becomes.
There are a few more tips.
"Never click the 'like' button on a particular product page, and if you want to play an online game or take a quiz, don't log into Facebook or follow a link from a social network - better go directly to the mentioned website," advises Paul Bernal, who lectures on information technology and intellectual property at the University of East Anglia's law school.
"Authenticating with Facebook is much easier, but it gives the app developers access to all sorts of information about yourself," he explains.
How else can you protect your information on Facebook?
In fact, there is only one way to ensure the absolute privacy of your data, says Bernal: "Stop using Facebook.
Facebook will only do something to protect its users more if people start to social networks, - explains the expert. - At the moment, the company has no particular reason to change."
His opinion seems to be shared by many users: the #DeleteFacebook hashtag is gaining popularity on Twitter amid the Cambridge Analytica scandal.
Although Bernal acknowledges that such a step is unlikely to be taken by many - especially those who consider Facebook an integral part of their online life.
How can I find out what information is stored about you?
Image copyright, Getty Images
Image caption,Max Schrems complained to Facebook on several occasions
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Under current law, the user has the right to contact any commercial company with a request, demanding to provide all the information about him that this company has.
When Austrian activist Max Schrems approached Facebook with a similar request in 2011, he was given a CD containing 1,200 files.
So he learned that the social network stores information about the IP addresses of all the devices from which he had ever accessed the Facebook site, a complete archive of all his correspondence, the history of his movements, and even information that he himself was sure that he had deleted - some private messages, statuses and publications on your wall.
However, in a world where Facebook actively shares information with third-party companies, it is not even clear where exactly to write such requests.
"How can you demand information if you don't even know who to demand it from?" Bernal explains.
This is likely to change as soon as this summer, when Europe adopts a new privacy regulation that will make it much easier for users to control their personal information.
Hefty fines for violating these regulations can encourage companies to provide users with their personal information, and they must do so in a clear and easy-to-read form.
How long is information stored?
Image copyright, Getty Images
Image caption,Are you ready to delete your account?
Under European data protection laws, companies may retain user data "for as long as necessary", but this can be interpreted in different ways.
