9 ms·

One argument he raised in the House hearing was that collecting data on users allowed more targeted ads which in turn made ads more efficient and therefore more

One argument he raised in the House hearing was that collecting data on users allowed more targeted ads which in turn made ads more efficient and therefore more economical, which levels the playing field more for small businesses versus large ones in terms of advertising. However, that is an argument favoring the customer, i.e., the advertiser, not the product, i.e., the user. During the Senate hearing, he was asked about Ms. Sandberg's comment that if there were no ads then users would have to pay. Mr. Zuckerberg pointed out that users can opt-out of ad targeting/data collection,[1] making the ads they receive more generic and less "relevant", but currently Facebook offers no option for users to pay not to receive any ads at all. The still unasked question is, "Why not?" If some users could not afford to pay, as Mr. Zuckerberg suggested in both hearings, then they could opt-in to advertising. How would this affect the business model? Further, if those users were disappointed at how the ads they were being shown were not "relevant", then they could opt-in to ad targeting/data collection. 1. The default setting is opt-in. As we know, most users do not change default settings.

return1 8y ago
i m kind of surprised that they have not asked these questions to google. Also: - Making ads relevant means less ads overall for the user - It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical - Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans. - More generally there is no evidence that subscription users are happier.
default-kramer 8y ago
I have been thinking about what would happen if all browsers had perfect ad blockers enabled by default, starting tomorrow. I think years later we would look back and decide that it was the right thing to do, despite the immediate short-term economic damage.
- return1 8y ago
  advertising would just shift to product placement in the news you get and affiliate links everywhere. not better. people tend to forget that advertising covers a real need.
  - dbasedweeb 8y ago
    People have shown an impressive ability to figure that kind of advertising out. A lot of native advertising on sites like Reddit is outed almost immediately, and then the discussion turns on the advertiser. We could also add protections as they are in the UK requiring “sponsored content” to display clearly that it’s an advertisement. In short, there’s nothing inevitable about advertising models as they exist today, and people who try to convince of you that they are inevitable are peobsbly trying to sow apathy.
    - pixl97 8y ago
      >People have shown an impressive ability to figure that kind of advertising out This is of course selection buas.
  - voodootrucker 8y ago
    I'll take the other side of that argument. Search engines should put the most relevant products at the top of the page because they are the best fit, not because someone paid for them to be there. If all advertising disappeared tomorrow, the world would function better. Consumers would not have advertisers trying to manipulate them, and they would more rationally allocate their resources. Advertising is a tax placed on people who have already bought a product, which made it more expensive, to manipulate other people into also buying that same product. Without it, good products would succeed on merit / independent reviews / word of mouth. * The one exception I can think of is possibly during the scale period of startups, helping them scale faster (artificially) than if they just followed the "be the best and it will catch on" approach.
    - chillacy 8y ago
jiveturkey 8y ago
> currently Facebook offers no option for users to pay not to receive any ads at all. The still unasked question is, "Why not?" Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.
remarkEon 8y ago
My expectation would be, even if you paid for an ad-free Facebook, that they’d still collect and monetize your data.
- throwaway2048 8y ago
  Yep, there seems to be a great deal of magical thinking revolving around the idea of if you pay companies they wont keep on exploiting your data. You still get ads on very expensive cable TV packages. Your bank still data mines and sells off your purchase history, dispite a large monthly fee.
  - deleted 8y ago
    [deleted]
  - textmode 8y ago
    Do the user agreements in the two examples cited have any provisions that prohibit collecting data that will be exploited for advertising or marketing purposes? What if the social network user agreement contained "privacy" provisions prohibiting collecting data if the user pays a fee but no such "privacy" provisions if the user pays nothing.
- lotu 8y ago
  To do what? Facebook uses user data to, run Facebook, do research (train machine learning which uses de personalized data), and show ads. If they aren’t showing ads what other things are you expecting them to do that you find problematic.
  - michaelt 8y ago
    To do what? In case you ever stopped paying; and because stopping displaying ads _and_ stopping tracking was more work than just stopping display.
  - gaius 8y ago
    To get more money??
glandium 8y ago
If a significant portion of the FB userbase opt-in to not get any ads, then that makes the number of persons that an ad can target smaller, meaning ads would have less ROI for advertizers, driving the ads price down. So, in fact, the more users opt-in to not get any ads, the more the subscription would have to cost.
hinkley 8y ago
I had a sudden moment of clarity: What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway. I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.
- throwaway2048 8y ago
  "can't afford" is not equivilent to "won't pay"
  - crowbots 8y ago
    "can't afford" is equivalent to "won't pay". this totally nullifies the purpose of a advertising based business model. TV channels i pay for them and still they show advertisement. i can afford and i pay for them and am ok with negligible nonsense here and there, and am only going to switch to other channels when an advertisement seems to begin. i am sure 70% ppl are capable of going and finding wat they want. and the rest of them wont buy stuff any ways just because they saw an ad. May b this whole advertisement caters to those 2 or 3 percent of entire population who are cat on the wall.
- adventured 8y ago
  You distribute the advertising cost & display across a very large number of users (varying on if we're talking about CPM or CPC), some of which can afford to buy things. Some users can afford to buy things at one point in time but not another, or vice versa. The users that do click and buy, subsidize the 3/4 of users that either could never afford to pay $5 or $10 per month for Facebook (a billion people or more), or would never want to (ie are perfectly fine with advertising). You advertise to a larger group than perfectly ideal (including guaranteed non-buyers) precisely because you don't know every person's exact financial condition and never will. The minority of people on Facebook that click on ads and buy things, are making it possible for the other 2 billion people to use the service without paying a monthly fee. This distribution is identical to advertising pretty much everywhere else throughout history. Everyone that drives by a billboard can't afford to buy what the billboard is selling. That doesn't make it a con. The buyers you do derive, out of the very large number of people that have no interest or can't afford what you're selling, pay for your billboard (hopefully). Everyone that watches an ad on TV - the past half century - can't afford to buy the thing being sold (a $1,000 workout machine), that doesn't mean the advertising is a con. The sole difference is the heightened targeting based on information that Facebook or Google know about your habits or interests. In the past, it was far more difficult. A TV advertiser for example, might discover through research and trial & error that TV watchers are more likely to buy that $1,000 workout machine at 1am via an hour long infomercial. The experimentation loop was dramatically slower.
bigiain 8y ago
I suspect the incentives are all wrong for that to work. The people most able and likely to pay for Facebook are _exactly_ the people Facebooks advertising customers want most access to.
duxup 8y ago
But even with the current less targeted option Facebook offers, or say your option of paying: Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.
pwinnski 8y ago
I think the argument is that more affluent users would be more likely to opt-out, leaving behind less affluent, and therefore less-valuable users, making advertisers desire less and less to advertise at all. Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.

return1 8y ago

i m kind of surprised that they have not asked these questions to google. Also: - Making ads relevant means less ads overall for the user - It would cost $20 / year and no studies show that users would pay anywhere near that. It reasonable to assume its impractical - Subscription-premium services rely on a small number of fans to pony up (usually significantly) for the rest of users. afaik facebook does not have such a mass of hardcore, passionate fans. - More generally there is no evidence that subscription users are happier.

default-kramer 8y ago

I have been thinking about what would happen if all browsers had perfect ad blockers enabled by default, starting tomorrow. I think years later we would look back and decide that it was the right thing to do, despite the immediate short-term economic damage.

return1 8y ago
advertising would just shift to product placement in the news you get and affiliate links everywhere. not better. people tend to forget that advertising covers a real need.
- dbasedweeb 8y ago
  People have shown an impressive ability to figure that kind of advertising out. A lot of native advertising on sites like Reddit is outed almost immediately, and then the discussion turns on the advertiser. We could also add protections as they are in the UK requiring “sponsored content” to display clearly that it’s an advertisement. In short, there’s nothing inevitable about advertising models as they exist today, and people who try to convince of you that they are inevitable are peobsbly trying to sow apathy.
  - pixl97 8y ago
    >People have shown an impressive ability to figure that kind of advertising out This is of course selection buas.
- voodootrucker 8y ago
  I'll take the other side of that argument. Search engines should put the most relevant products at the top of the page because they are the best fit, not because someone paid for them to be there. If all advertising disappeared tomorrow, the world would function better. Consumers would not have advertisers trying to manipulate them, and they would more rationally allocate their resources. Advertising is a tax placed on people who have already bought a product, which made it more expensive, to manipulate other people into also buying that same product. Without it, good products would succeed on merit / independent reviews / word of mouth. * The one exception I can think of is possibly during the scale period of startups, helping them scale faster (artificially) than if they just followed the "be the best and it will catch on" approach.
  - chillacy 8y ago

jiveturkey 8y ago

> currently Facebook offers no option for users to pay not to receive any ads at all. The still unasked question is, "Why not?" Because it's not the showing of ads that's the real problem, it's the harvesting of demographic/interest/PII from the graph that's the problem. So they "can't" offer a way to opt out of that because for the part of your network that doesn't opt out, advertisers would have much less good data (ergo FB's value prop to advertisers is much less good) since it wouldn't have the data from the graph to augment the user's own data.

remarkEon 8y ago

My expectation would be, even if you paid for an ad-free Facebook, that they’d still collect and monetize your data.

throwaway2048 8y ago
Yep, there seems to be a great deal of magical thinking revolving around the idea of if you pay companies they wont keep on exploiting your data. You still get ads on very expensive cable TV packages. Your bank still data mines and sells off your purchase history, dispite a large monthly fee.
- deleted 8y ago
  [deleted]
- textmode 8y ago
  Do the user agreements in the two examples cited have any provisions that prohibit collecting data that will be exploited for advertising or marketing purposes? What if the social network user agreement contained "privacy" provisions prohibiting collecting data if the user pays a fee but no such "privacy" provisions if the user pays nothing.
lotu 8y ago
To do what? Facebook uses user data to, run Facebook, do research (train machine learning which uses de personalized data), and show ads. If they aren’t showing ads what other things are you expecting them to do that you find problematic.
- michaelt 8y ago
  To do what? In case you ever stopped paying; and because stopping displaying ads _and_ stopping tracking was more work than just stopping display.
- gaius 8y ago
  To get more money??

glandium 8y ago

If a significant portion of the FB userbase opt-in to not get any ads, then that makes the number of persons that an ad can target smaller, meaning ads would have less ROI for advertizers, driving the ads price down. So, in fact, the more users opt-in to not get any ads, the more the subscription would have to cost.

hinkley 8y ago

I had a sudden moment of clarity: What's the point of advertising to people who can't afford to pay a few bucks for a social networking site? If they're broke they aren't going to buy anything anyway. I think this whole train of thought is a logical fallacy. You need people who have more money than sense to believe that not paying is a better option than paying. It's a con.

throwaway2048 8y ago
"can't afford" is not equivilent to "won't pay"
- crowbots 8y ago
  "can't afford" is equivalent to "won't pay". this totally nullifies the purpose of a advertising based business model. TV channels i pay for them and still they show advertisement. i can afford and i pay for them and am ok with negligible nonsense here and there, and am only going to switch to other channels when an advertisement seems to begin. i am sure 70% ppl are capable of going and finding wat they want. and the rest of them wont buy stuff any ways just because they saw an ad. May b this whole advertisement caters to those 2 or 3 percent of entire population who are cat on the wall.
adventured 8y ago
You distribute the advertising cost & display across a very large number of users (varying on if we're talking about CPM or CPC), some of which can afford to buy things. Some users can afford to buy things at one point in time but not another, or vice versa. The users that do click and buy, subsidize the 3/4 of users that either could never afford to pay $5 or $10 per month for Facebook (a billion people or more), or would never want to (ie are perfectly fine with advertising). You advertise to a larger group than perfectly ideal (including guaranteed non-buyers) precisely because you don't know every person's exact financial condition and never will. The minority of people on Facebook that click on ads and buy things, are making it possible for the other 2 billion people to use the service without paying a monthly fee. This distribution is identical to advertising pretty much everywhere else throughout history. Everyone that drives by a billboard can't afford to buy what the billboard is selling. That doesn't make it a con. The buyers you do derive, out of the very large number of people that have no interest or can't afford what you're selling, pay for your billboard (hopefully). Everyone that watches an ad on TV - the past half century - can't afford to buy the thing being sold (a $1,000 workout machine), that doesn't mean the advertising is a con. The sole difference is the heightened targeting based on information that Facebook or Google know about your habits or interests. In the past, it was far more difficult. A TV advertiser for example, might discover through research and trial & error that TV watchers are more likely to buy that $1,000 workout machine at 1am via an hour long infomercial. The experimentation loop was dramatically slower.

bigiain 8y ago

I suspect the incentives are all wrong for that to work. The people most able and likely to pay for Facebook are _exactly_ the people Facebooks advertising customers want most access to.

duxup 8y ago

But even with the current less targeted option Facebook offers, or say your option of paying: Would other Facebook apps still have as wide an array of data on users that we've seen? And if apps can see it then Facebook itself is still gathering it... even if ads aren't targeted.

pwinnski 8y ago

I think the argument is that more affluent users would be more likely to opt-out, leaving behind less affluent, and therefore less-valuable users, making advertisers desire less and less to advertise at all. Facebook would be faced with trying to get as much revenue out of the 5% of their users who pay as out of the currently-100% of users who don't, and that would be a very hard thing to do.