Facebook is Actually Not Free

This is our monthly installment of ‘Delayed Grasp of the Obvious’.

Just before Facebook Week last week I volunteered a point of view that was posted in Kevin Coupe’s excellent retail blog MorningNewsBeat.com, questioning that as FB doesn’t charge, how can it compensate users for breach of their private data?  (the letter is shown below).

Fair enough question and we saw Zuckerberg, Sandberg & Co. take some baby steps last week after the Congressional rotisserie.

But I made a huge error when I said “Facebook is free already”.  Palm to forehead.

Facebook is not free.   Nothing is free.

As has been famously stated and variously attributed, ‘There ain’t no such thing as a free lunch”.  Meaning, there’s always a hidden or implied cost or quid pro quo with anything positioned as ‘free’.

In Facebook, you don’t pay cash, you pay with something much more dear:  YOU.

In fact, Facebook, and all other ‘free’ sites, are not benevolent social facilitators, they are essentially match.com-like dating sites that try to hook up advertisers with hot to trot consumers.  Except you don’t volunteer things like ‘long walks on the beach’.   All you do is go about your daily life, posting and clicking, and your profile is created in the background, with data you didn’t even know was being collected.

Basic stuff, but really brought home by the latest Facebook issues, which look to become a watershed moment in privacy practices.

As a marketer doing anything online, understand that your future efforts to connect with consumers is going to have to deal with increasing amounts of skepticism, where consumers make a more informed decision about whether hitting that last click-bait article, or signing up for something that looks free.
– and increasing privacy laws will likely mean greater disclosure and more overt opt-in requirements.

As a consumer, realize that online you are first a commodity, not some company’s friend, and you need to take exceptional care of YOU.

The days of ‘free’ services are waning.  And this is not just another conspiracy theory.

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April 6, 2018

I liked this email about the Facebook situation from MNB reader David Tuchler:

So here’s the thing: any normal business that screwed up or compromised its customers’ privacy or violated any other customer rights would be compelled to offer some sort of make-good (morally if not legally). If the laundry scorches your shirt, they cover the cost of the shirt or give you a credit. Even Equifax offered a identity protection service, even if it was sort of a ‘honestly, you can trust me again’ thing. The point is that the injured party is somehow compensated.

Facebook is different – it does not collect revenue from its consumer users. So even with millions of its users’ confidential data breached and a market cap of $464 Billion (that’s over $200 per user or $6000 per affected user), does Facebook have a responsibility to somehow make things right? And how would that even happen? In-kind gestures (we’ll extend your subscription another 3 months) doesn’t necessarily work here – – not only because FB is free already, but I don’t want any more FB – – I actually want less.

This is one of those areas where the law hasn’t kept up with the fast-moving nature of online activity (sort of analogous to the online sales avoid sales tax loophole). To the extent these social media companies have no avenue to make things right, I would have to agree with the European direction of requiring more strict and obvious safeguards and opt-in mechanisms so that risks are made clear and users can make a more rational judgment on whether to join or not.

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One response »

  1. Cool – 100 countries AND getting cited by your peers!You’re on your way to a new career!

    847-409-8228 mobile

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