Facebook’s Gollum Will Never Give Up Its Data Ring

Does Facebook sell your data? An informal poll of my informed Twitter followers suggested that about 70% of us believe that.

Facebook does not sell your data. It hordes your data like Gollum holding the ring. Selling your data would not be nearly as profitable as leasing access to your attention, via advertising— over and over again.

Facebook uses the data it gathers from the use of its platform (call that “your data,” for now) in order to build better targeting profiles for advertising. It uses your behaviour on its platform to encourage you to continue to do things on the site — ultimately to give over your attention and to keep coming back. In product manager speak this is engagement (when you give up your attention) and retention (when you come back for more).

The data is one element that helps drive engagement and retention, but more importantly, it drives ad targeting. And because Facebook has a monopoly of advertising on Facebook, it can set its own price, bound only by the price competition from non-Facebook channels (like Google, programmatic or display ads).

If Facebook sold or leased your data to advertisers, advertisers would be able to find ways of targeting audiences in novel ways — ways that could be cheaper than Facebook’s own methods. For example, they might use the data to target and purchase dirt cheap remnant inventory on programmatic networks.

So no, Facebook does not sell your data.

Marketers have certainly tried to get Facebook to ‘sell your data’. At one time (it may still do), Facebook allowed some marketers to interrogate their data more richly than the targeting interface on Facebook’s Audience Insights(have a play). This data was more granular but still obscured enough to prevent you exporting it at any meaningful level.

That tool was only available via the DataSift platform, and only to advertisers who were already spending large sums on Facebook ads. It was a tool — moderately better access to data — designed to encourage advertisers to spend more money on Facebook.

But to be clear, there is no way for a marketer or advertiser to pay Facebook to see your individual data, your likes, your friends or your statuses. Not even for a short period of time.

The best a marketer can hope for is a glimpse of a bundled cohort of people like you in some way. And then they can try to target ads at people like you (but not you specifically.)

So again, Facebook does not sell your data.

What Facebook does it harvest your attention. That fixed quantum you have — about 16 hours a day, 7 days a week — of conscious awareness. In the era of abundance, the one thing we haven’t figured our how to manufacture or increase is each person’s human attention.

Facebook does not sell your data. It has a set of tools designed to maximise its share of the last rare element of the human endeavour, our attention. The reason it doesn't sell your data is primarily because doing so would weaken its business model and its pricing power. (There are privacy considerations too, but I believe these are secondary.)

This matters. Because when we think about how we ‘fix’ Facebook, we need to know what the real ecology is. It’s not about data. It is about capturing as much precious attention from as many people as possible. With no limits.

The data is an enabler to this, the enabler that supports the business model. Data is the route to the staggering profits the company announced this year.

So when you hear someone suggest Facebook sells your data, ask yourself, why would Gollum give up the Ring?

I write Exponential View a newsletter about the future. You should sign up.