Privacy MythBusters: No, Facebook Doesn’t Give Advertisers Your Data!

by on July 6, 2010 · 6 comments

Working in any field of public policy is a bit like living in a haunted house: You spend most of your day dodging bogeymen, ghosts, phantasms, phantoms and specters of imagined harms, frauds, invasions and various conspiracies supposedly perpetrated by evil companies against helpless consumers, justice, God, Gaia, small woodland creatures and every sort of underserved, disadvantaged and/or underprivileged group of man, animal, vegetable and mineral imaginable.

But Internet policy—particularly online privacy—tends to be haunted by such groundless imaginings far more than most other areas of policy, largely because it manifests itself in ways that are far more real and immediate to ordinary users. For example, as outraged as any of us might feel about the Gulf oil spill, how many of us have the slightest clue what’s really involved (beyond what we’ve learned watching TV anchors stumble through a vocabulary they don’t understand)?

By contrast, huge numbers of Americans have daily interaction with web services like those provided by Google, Microsoft, Yahoo, Twitter and Facebook. That doesn’t mean we necessarily understand how these technologies work. Indeed, quite the contrary! As Arthur C. Clark said, “Any sufficiently advanced technology is indistinguishable from magic.” But we often think we know how these technological marvels work, and certainly sound much more informed when we spout off (pun intended) about these things than, say, “top kills” on the bottom of the ocean floor. In short, we know just enough web services to be dangerous when we ground strong policy positions in our unsophisticated understanding of how things really work online.

There are few better examples of this than the constantly repeated bugaboo that “Facebook sells your data to advertisers!” Or “Facebook only wants you to share more information with more people for advertising purposes!” These myths bear no relation to how advertising on social networking sites actually works, as Facebook CEO Sheryl Sandberg explains beautifully in a short tutorial video. Here’s the key portion:

We also protect your privacy by virtue of the way our advertising system works. Because our system chooses which ads to show you, we don’t need to share any of your personal information with advertisers in order to show you relevant ads. In order to advertise on Facebook, advertisers give us an ad they want us to display and tell us the kinds of people they want to reach. We deliver the ad to people who fit those criteria without revealing any personal information to the advertiser.

The only information we provide to advertisers is aggregate and anonymous data, so they can know how many people viewed their ad and general categories of information about them. Ultimately, this helps advertisers better understand how well their ads work so they can show better ads.

And here’s the video:

You can’t blame average users for not understanding how Facebook’s ad system works. That doesn’t make them stupid! They may be ignorant, but their ignorance is perfectly rational. Ultimately, it’s up to companies like Facebook to try to overcome the perception-of-technology-as-magic problem—lest consumers assume it must be black magic. Still, I’m sure we’ll keep hearing this myth repeated in the future, as similar myths have been in other areas of the privacy debate. I only wish more companies would prepare similarly concise videos that explain how their systems work to dispel some of this technopanic hysteria. Here are two particularly good examples of effective tutorials:

  • How Google delivers ads and uses user data and uses data in its other products
  • How Phorm delivers ads tailored to users preferences based on observing their browsing activity at the ISP level (based on the scary-sounding “packet inspection”) without retaining a list of websites visited by a computer or even sharing the profile of generic interests associated with a particular

Oh, and on the myth I noted above, I’ll just reiterate what I’ve said before:

It’s a myth that Facebook is hell-bent on getting users to share more information more widely for the sake of of advertisers. In fact, advertising on Facebook doesn’t involve sharing information about users with advertisers. In fact, advertisers buy ads that Facebook shows to users Facebook (or rather, its algorithms) thinks might be interested. If anything, sharing more information can actually help Facebook’s competitors if users take advantage of Facebook Connect’s data portability to port their data over to competing platforms. So the widely perceived conflict of interest between Facebook’s economic interests and users’ privacy just doesn’t exist. The site gains from having more users spend more time on the site, not from tricking users into “giving up their privacy.”

  • Pingback: Busting the Myth that Web Sites ‘Sell Your Data’ | Think Tank West

  • Pingback: Busting the Myth that Web Sites ‘Sell Your Data’ | Austrian Economics Blog

  • Robert Ellis Smith

    The direct-mail business has said for years that it does not invade privacy because its mailings are done by contract shops that never look at the identity of the persons on the list. Telemarketers have said for years that they do not invade privacy because they deal only in masses of phone numbers, not personal identities. We don't keep “dossiers” on people and we don't disclose their information, they have insisted.

    Now social-networking execs are voicing the same theme. Don't they understand that the intrusions come in the manipulation involved and in the RECEIPT of the customized commercial messages? This is especially intrusive when young persons are the targets, regardless of whether Facebook and their competitors “disclose” personal data to advertisers. And it's especially intrusive when it corrupts a Web service intended for uninhibited communications among trusting peers.

    Robert Ellis Smith, Publisher
    Privacy Journal newsletter, http://www.privacyjournal.net

  • Ken

    What you write is not entirely accurate. There is a clear financial incentive for Facebook to collect as much personal data as possible. As an advertiser, I can target Facebook users based on demographic info as well as user interests. The more hyper-targeted I can make my ads, the more money I am willing to spend on Facebook. That's simply a fact. Note that I do not believe there is anything nefarious about that practice, but we should certainly be honest about it.

  • http://techliberation.com/author/berinszoka/ Berin Szoka

    There are two separate issues here, Ken. Yes, Facebook has an incentive to get users to provide more information about their interests so that ads can be better targeted to them. It's even more true that Facebook wants users to spend as much time on the site as possible because that means more ads shown to users. But those are both very different things from wanting users to make their profile information, photos, comments, etc. more visible to more users—which is what I was referring to. Making that information more widely visible actually doesn't help Facebook target ads because Facebook has the information either way. It helps Facebook overall only insofar as it results in more people spending more time on the site—which requires NOT pissing off users over privacy. Does that make sense?

  • http://techliberation.com/author/berinszoka/ Berin Szoka

    Thanks, Robert. I'm glad you're willing to come out and say what most people in this debate won't admit: the real issue isn't privacy, but how advertising is inherently manipulative and invasive. There's a HUGE difference between telemarketers calling you to interrupt your dinner and Facebook showing you ads to support the free service you're enjoying at their considerable expense. The former is clearly invasive. The latter is a voluntary quid pro quo. If you don't like it, don't use it! But there is no free lunch and SOMETHING has to support all that contact. Better targeted ads are actually LESS invasive and annoying and MORE useful to users.

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