If you’re not paying for the product, then you’re the product!

In today’s digital age, we are accustomed to accessing numerous services and applications free of cost. We use social media platforms, search engines, messaging apps, and a variety of other digital tools every day without spending a dime. But have you ever thought about why these services are free? The truth is, the old adage “if you’re not paying for the product, then you’re the product” rings true.

The concept of being the product is not new. In the pre-digital era, television and radio channels were free, but they would make money through advertisements. Similarly, newspapers and magazines would sell advertising space to earn revenue. However, the rise of the internet has drastically changed the dynamics of advertising and marketing. The amount of user data available to companies has increased exponentially, allowing them to target users more effectively than ever before.

Companies such as Facebook, Google, and Twitter are prime examples of how the advertising industry has changed. They offer free services to billions of users worldwide, but they make billions of dollars through advertising. They collect vast amounts of data on users’ activities, such as their browsing history, search queries, and social interactions, to build comprehensive profiles of their interests and behavior. According to Statista, In 2022, Meta (formerly Facebook Inc) generated over 113 billion U.S. dollars in ad revenues. Advertising accounts for the vast majority of the social network’s revenue. While Google’s ad revenue amounted to 224.47 billion U.S. dollars.

This data is then used to serve users targeted ads that are relevant to their interests and preferences. Advertisers pay these companies to display ads to their target audience, making the service provider the middleman between advertisers and users. This business model has been incredibly successful, making some of these companies among the wealthiest and most powerful in the world.

However, this business model has come under scrutiny for its ethical implications. Many people are uncomfortable with the idea of their personal information being collected, analyzed, and sold to advertisers without their explicit consent. There are also concerns about how this data can be used for nefarious purposes, such as political manipulation or discrimination.

Another significant issue is the lack of transparency around how this data is being used. Users may not be aware of how much data is being collected, what kind of data is being collected, and how it is being used to target them with ads. The complexity of the algorithms used to analyze this data also makes it difficult for users to understand how they are being profiled and why certain ads are being served to them.