Facebook publicly publishes a quarterly report showing “average revenue per user” or ARPU.
ARPU is the average amount paid at auction by advertisers to access a Facebook user’s personal interests. Advertisers pay to access data Facebook collects about users along with the rights to display their message to those users on the Facebook News Feed and elsewhere across Facebook and Instagram, which is also owned by Facebook.
Facebook also collects users’ personal information on WhatsApp, a private messaging app Facebook bought for $19 Billion in 2014. Information ‘mined’ from a user’s WhatsApp account is also sold to advertisers who are then able to target that same user on Facebook using data collected by the Facebook company on WhatsApp.
According to a Pew Research Poll released Jan. 16, 2019, 74% of Facebook users are not aware of how Facebook sells their data, or how it impacts their Facebook experience. Most experts agree the reason is a combination of factors including the complexity of how data gathering is related to targeting options and advertising auctions on the platform, along with Facebook deliberately hiding what it is doing with user data.
Facebook makes money by classifying a user according to personal interests in anything from specific video games to Ford trucks to hot yoga then brokering your information to people who want to influence how you think. For example, a political operative could pay Facebook for the ability to tell Ford truck owners Hillary Clinton would ban the sale of ammunition in the United States if elected in order to influence the outcome of an election.
For users, this means who you are may well determine who is trying to manipulate how you think, and what they say to manipulate you. In the same poll, users confirmed Facebook’s algorithm had accurately classified their political identity 73% of the time.
In this instance, a user’s personal interest in Ford trucks would be the data Facebook is selling to the highest bidder in an ongoing auction for access to users with that interest. While most users understand their personal data is not connected to their exact name, according to the Pew Poll, most Facebook users do not understand how Facebook’s interest targeting system can personally affect them.
Natasha Lomas writes in TechCrunch about the Pew Poll,
“For all the outrage generated by revelations that Cambridge Analytica had tried to use Facebook data to apply political labels on people to target ads, such labels remain a core feature of the Facebook platform — allowing any advertiser, large or small, to pay Facebook to target people based on where its algorithms have determined they sit on the political spectrum, and do so without obtaining their explicit consent.”
Selling personal data affects a Facebook user’s life personally because the person targeting has access to far more information about a user’s interests and identity than most people realize.
Beyond illegality or violating Facebook’s lenient Terms of Service, no one is barred from researching Facebook users’ specific interests and creating content customized to influence those users based on that personal interest. Armed with this specific data about who you are, advertisers are far better equipped to manipulate how a Facebook user sees the world.
At the current year to year rate of sales growth, Facebook will over triple revenue generated from selling access to your data and News Feed from and average of $301.48 to $920.30 over the next 4 years, bringing the total Facebook makes per North American user to over $1200 in 8 years.