The “Big Data” Goldmine

How the Digital Age tech giants profit by knowing you so well

Data tells a story. It might seem counterintuitive or even downright insulting to think that Facebook or Google knows more about you than your friends and family. But it might be true. The sheer amount of data these companies have on you is both staggering and a goldmine.

When you share your location and publish the movies and music you like on Facebook, you provide the company insight into who you are as a person. When Google Chrome tracks your cookies, you also provide insight into who you are as a person. Companies like Facebook and Google can build an accurate demographic profile for you with singular data points like gender, age, and income. It doesn’t stop there. These companies track what you search for and what your interests are to then create psychographic profiles; these profiles provide more specific estimations as to who you are, your tendencies, your worries, and your overall behavior. Your psychographic profile is then packaged along with other users’ profiles and sold to advertising companies. Advertisers need the most in-depth consumer profiles possible so that they can more accurately deliver their messages and increase conversion rates.

Large technology companies like Facebook and Google can develop accurate predictions about you and your behaviors based on the social media data of just 8–9 of your friends. Machine learning and web-scraping algorithms can more efficiently gather all of the data points required to build your profile. As technology continues to rapidly progress, the required number of friends to build your psychographic profile could reasonably decrease.

While some want more targeted ads to improve their shopping experience, society, as a whole, is trending toward desiring a more constrained approach. Some polling numbers from 2013 to 2018 show a general downward trend in how individuals perceive targeted ads. In 2013, roughly 70% of respondents to a Zogby Analytics poll said they like at least some targeted internet ads. In a 2018 Ipsos/Reuters poll, 41% of respondents said that targeted ads are worse than regular ads, and 63% want to see less targeted advertising. 46% of respondents also said they would like to see the government increase regulations on how companies use their personal information.

Children born in the past ten years have grown up knowing life only with social media and instant connectivity. The cumulative data repository to which companies like Facebook and Google contribute is enormous and growing. The European Union took a major step forward in protecting the data rights of its members by adopting the GDPR. California’s Consumer Privacy Act also aims to safeguard citizens’ data. However, Americans do not yet have certain data rights enumerated at the federal level (e.g., ensuring data security, prohibiting financial detriment to the user).

The Digital Age is causing adverse effects on the mental health of the younger generations. Reversing this trend will help us avoid the hypothetical yet eerily realistic dystopian scenario of being denied a job because a potential employer’s algorithm predicts that you wouldn’t be a good worker based on your digital footprint.

The 2016 US Presidential election demonstrated that psychographic profiling can be effective at influencing voter sentiment. Cambridge Analytica allegedly mined the information of ~50 million user profiles, a testament to how many people this can affect. Cambridge Analytics enticed Facebook users to complete a personality quiz. The Great Hack portrays just how much companies probably know about you, as well as how they capitalize on your data.

The Cambridge Analytica scandal brought to light how imbalanced the ownership of our data is. For millions of Gen Z Americans, a high usage rate of social media is the norm. Entire lives will be spent with one foot in reality and one foot in the digital world. Digital footprints are readily provided to whatever companies want them and will only get bigger over time. The process by which companies compile and collate these footprints will get faster. Soon, psychographic profiles could become even more accurate and the advertisements we see even more direct.

Should large technology companies be able to profit off of your personal data without your knowledge or consent? Should people receive a slice of the collective profit pie for providing companies with the data that allows their business models to be profitable in the first place?

The trade deal made with large technology companies like Facebook and Google needs serious restructuring.

People receive free social media platforms that are linked to:

  1. Increased depression among teens and adults
  2. Increased feelings of social isolation
  3. Misinformation and disinformation
  4. Foreign interference in US elections
  5. More targeted advertisements.

In return, Facebook’s 2019 revenue was $70.7 billion (p. 42). Google’s parent company, Alphabet, saw its 2019 revenue hit $161.9 billion (p. 26).

Facebook and Google services are free because people are the product. How do the companies make all their money? They run advertisements. Advertisements accounted for 98.5% of Facebook’s 2019 revenue (p. 44), as well as 83.9% of Alphabet’s Google segment revenue (p. 30).

The more of your data available to modern technology companies, the more accurate your psychographic profile becomes. The more accurate your profile, the more valuable your profile is to advertisers. The more valuable your profile is to advertisers, the more money Facebook and Google make selling it off.

Data is worth more than oil. Facebook and Google hope you don’t find out.

Exploring how technology affects people, business, and politics. Runner | Guitar Player | Fan of the Yankees, Giants, & the Knicks

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