There’s much screaming, as we know, about how Facebook takes our oh so valuable information – that we just give it for free! – and then makes fortunes from it. It’s not really quite true of course, it makes money by selling advertising, the data we hand over simply refining who advertises what to whom. But, OK, let’s think this through a little. Imagine a Facebook which didn’t suck our data in order to improve the advertisers’ experience. What would it cost?
In its 2017 annual financial report, Facebook said, “We generate substantially all of our revenue from selling advertising placements to marketers.” Indeed, $39.94 billion of Facebook’s $40.65 billion in total revenue — 98 percent — came from ads.
Facebook reported 2.13 billion monthly active users at the end of last year. Thus an annual subscription fee that matches Facebook’s average ad revenue per user would be $18.75.
Would you pay $18.75 for an ad-free version of Facebook? Some people might,
That’s one possible answer. It’s wrong, for many wouldn’t and therefore the costs of running the site would be spread over fewer people. But it’s a useful one. The revenue from our data can be said to be that, if that’s the way we want to think of it. Deduct the costs of running Facebook from that – say, just to guess at some number, 50% – and we’ve a value of our data of $10 or so a year.
This is the highly valuable resource which people are insisting Facebook is stealing from us? The stuff that Jaron Lanier and Yvgeny Morozov insist we must be paid for? Seriously?
It’s trivia, isn’t it? Just not something to be running an international campaign about.