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Facebook is a worthy business

By Drew Nicholson

December 9, 2011 | 5 min read

As social media sites, including the bohemouth that is Facebook, have developed, the general perception is that they should be free to use and not be commercialised through advertising, allowing their users to interact without being targetted by brands and companies eager for them to spend their hard earned dough. Drew Nicholson, joint managing director of dnx challenges the free-to-use notion of social media users however.

Facebook seems to be in everyone’s cross hairs at the moment. Parents berate it for their children’s addiction to it, commentators holler at its pervasive nature and the way it seems to garner and store information before flogging it on to the highest bidder, and advertisers don’t seem able to decide whether it’s a relevant and cost effective medium for the promotion of goods, services and brands.

A recent damning piece in a national newspaper questioned Facebook’s ‘eavesdropping’ methods which can, apparently, harvest information from users’ activities on the web. This information can then be fed to advertisers enabling them to target their audience with relevant and pertinent adverts.

Well, call me old fashioned but isn’t this the holy grail for advertisers? And shouldn’t the public be ‘over the moon’ that it only sees adverts relevant to their need and desire at that moment?

But probably more fundamental to this argument is the ill-conceived, but nevertheless popularly, fostered view that social media sites should be free to use whilst also having no financial recompense for delivering this complimentary service. The old missive that ‘there is no such thing as a free lunch’ springs to mind, Wikipedia aside.

Social networking sites, like every other business have to be allowed to make a profit, to recoup for offering their services free of charge. It is a business model as old as the hills.

Historically, the front page of newspapers were plastered with adverts, the editorial sections hidden within; commercial television channels have interrupted programmes from their conception and, likewise, radio. Even these business practices have evolved, for instance, and it is generally accepted that the leading commercial TV brand can also now charge a subscription, along with running adverts.

On the advertising front Facebook also seems under attack for two separate issues; one for supposedly tracking users and then allowing tailored ads to be sent to them; secondly, and only after a user has ticked ‘like’ about a brand on their page, associating the aforementioned brand with the aforementioned user which can appear on their friends’ page.

This latter point seems worthy of only a cursory comment as it appears fundamentally rather innocuous. There seems scant violation of privacy when a users profile picture is cemented with one of their chosen brands which is then sent to their friends’ pages. Whilst the user did not, it seems, knowingly request the visual bond, it seems little worse or better than buying a product in a shop which is then packaged in a branded carrier bag, signifying the holders’ preference for a particular brand or shop. Harmless really.

A more contentious issue for many is the use of personal data - gained by sophisticated software that tracks ‘chats‘ amongst other things - which can include, apparently, a user’s political opinions and sexuality. The use of this information can then be offered to advertisers to promote good and services.

Is this any worse than the personal information supermarket chains store on loyalty cards, or that held by banks and financial institutions which demand information of a very personal nature or, indeed, the NHS?

There is so much information readily available on all of us. But one thing that Facebook certainly has in its favour is that this data allows users to be targeted with offers and goods that, at least, should have some relevance to their current lifestyle. Targeting customers is never better than when undertaken with in-depth knowledge about them. It increases the recipients’ acceptance of the message and reduces their general apprehension to advertising.

So whilst some may bleat about Facebook’s business model, I think more should appreciate its free service, which is traded off against some consumer insight.


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