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How social networks sold your privacy

Posted on 23 Mar 2012 at 15:11

Stewart Mitchell investigates how sites such as Facebook and Google are cashing in on your personal information

When Facebook persuaded 800 million users to sign up, few subscribers would have realised they were the raw materials in a multibillion-pound production line, yet this is exactly how the company treats their information.

Facebook, Google and advertising networks have turned exploiting personal data into an art form – and for the most part, consumers have given the information freely.

Last year, Facebook generated $4.27 billion in revenue, according to figures from research house eMarketer, and estimates from various market watchers have suggested the company will be worth $100 billion if it floats later this year as expected. No wonder Google wanted a piece of the action and launched a rival to supplement its already groaning repositories of user information.

If anybody feels uncomfortable revealing information then they don’t have to

Yet companies using personal details online face ongoing battles, with privacy advocates bemoaning the way they share with advertisers. For marketing professionals, on the other hand, the privacy debate is effectively over. Once users upload their information, it’s open season.

“Facebook, Google , Twitter and the like give users a huge degree of control in terms of the information they provide or that is made available to others,” says Dave Bird, managing director of UK digital marketing agency Webtistic.co.uk. “If anybody feels uncomfortable revealing information then they don’t have to.”

Even so, users may still be surprised by just how much data is available to advertisers or anyone else who wants to snoop on their (once personal) information.

What’s shared?

Between Facebook, Google, Twitter, cookies and information sold by the Government to companies such as 192.com, there’s a wealth of personal data available on most people online, and even if it isn’t shared in an identifiable way, that doesn’t stop it spreading.

Facebook, for example, has no interest in selling identifiable personal information to its advertisers, but that doesn’t mean it won’t share details – just that they’ll be anonymous, in part to protect user privacy, but also to safeguard its greatest asset.

“One of the biggest misconceptions is that Facebook passes on information, but actually it doesn’t,” says Max Schrems, a driving force behind the Europe-v-Facebook.org action group that’s seeking action against Facebook’s practices via the Irish data commissioner. “It gives you the option to advertise to certain people, and to use that information, but it wouldn’t give your information to other people – that would be stupid because that’s Facebook’s treasure; you wouldn’t give that out to anyone else.”

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Facebook confirms that it won’t share anything personally identifiable, but that doesn’t mean it won’t cash in on the information in other ways.

“Our privacy policy is clear: we’re permitted to help our advertising customers measure the effectiveness of their ads, so advertisers receive anonymised, aggregated data about ad performance – for example, clickthrough rates within specific demographic groups – so they can optimise campaigns,” Facebook says. “If the advertiser chooses to run the advert, we serve the advert to people who meet the criteria the advertiser selected, but we don’t tell the advertiser who any of those people are.”

With users posting their relationship status, interests and location data, and interacting with groups and friends, Facebook can generate finely honed profiles for its advertisers to target.

It may feel like an invasion of privacy, but web businesses point out the information has been freely given and is essential to keep many websites running, because targeted advertising pays the bills.

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