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Facebook’s future lies in its ability to mine the personal data of its users to better sell them stuff, according to Erin Griffith of Wired.
This prospect may not bode well for users, many of whom resent the social network’s intrusion into their private lives. Facebook has consistently shrugged off criticisms about transparency and privacy by pointing to settings that give users control over what they share and with whom. One thing users can do is spend less time using its platform.
But even as users spent less time on Facebook, which is incidentally down by a total of 50 million hours per day as of the last quarter of 2017, its revenues still rose by 47 percent to US$ 13 billion during the same period. The social media giant was able to pull off the feat by increasing advertisement prices by 43 percent.
Facebook was able to do this because it controls 60 percent of the digital advertising market, together with Google. Advertisers are also willing to pay more because of Facebook’s ability to target its users with customized ads.
Better targeting, better ads, and driving better conversion were cited by Facebook chief financial officer David Wehner as the reasons why advertisers were willing to spend more. Wehner added that if the social network can keep improving its targeting, it will result in higher revenues for the company.
Facebook can ably do that because it has been religiously collecting data of the likes, friends, habits, and messages of its users for more than a decade. The company is so good at this that Facebook has repeatedly been the subject of conspiracy theories, one of which is that it is secretly listening to the private conversations of its users.
Even if time spent of Facebook continues to decline, it will maintain its supremacy in the digital ad market, as long as it can maintain its database of personal data which is the perennial bait for the discerning advertiser.