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The ad market duopoly is worth trillions of dollars.
The recent #deletefacebook campaign might have attracted a lot of media coverage, but it doesnât seem to have really damaged the siteâs success â Facebook claims 1.45 billion active daily users.
Thatâs a really big number of people, whichever way you cut it. And those people share enormous amounts of revealing and personal data every time they interact on platforms like Google and Facebook.
What makes that so concerning is that the information shared on these sites becomes their property, not the usersâ.
Itâs been denounced as a serious loss of privacy, something that came to the forefront in the recent Cambridge Analytica scandal where Facebookâs user data was shared with a political consulting firm.
This is disempowering for individual users and is bad news for a number of other groups too.
There are solutions on the horizon, but first letâs take a look at why losing control of our data is such a serious issue.
Why is control of our data so important?
If thereâs one thing that Google and Facebook are keenly aware of, is that our data is worth money. Lots and lots of money.
Every time we use their platforms to post photos, âlikeâ pages, run searches, and much more, we share information about ourselves that is extremely valuable.
Specifically, itâs valuable to advertisers. Thatâs why Facebook and Google work directly with ad companies, using our data to help them target ads at the users of their platforms who are most likely to respond.
It makes sense. If youâre a huge fan of sailing, for example, ad companies know that youâre more likely than the average person to be interested in sailing equipment. They can target ads more accurately and make more money while wasting less on uninterested people.
Facebook and Google have another powerful weapon too â content. Everything we upload to these platforms - every post, video, and photo - belongs to them. This content generates huge amounts of traffic which can be converted into ad revenue.
Itâs a system that works exceptionally well for these companies, and is the reason their ad revenues are astronomically high year after year
But it isnât great news for the rest of us.
Why do we lose out?
To return to the original point, we donât own the data we share on these platforms. That means that we donât profit from it, despite its enormous value to the companies in charge.
Weâre helping companies make billions and getting nothing in return. Whatâs more, while the idea of targeted ads works well in theory, itâs often a little messier.
Itâs common to receive poorly targeted ads for irrelevant products or services, which is irritating for users and completely wasteful for ad companies.
Content creators lose out, too. They essentially surrender their work to the hosting platforms, which means they tend to get poorly compensated and lose the ability to negotiate better rates, even though they play a vital role in the advertising process.
This model needs to change, but how?
We lack control of our personal data largely because platforms like Facebook and Google are centralized. They act as middlemen between all the above parties, and this gives them a gigantic amount of control and power.
But there is a solution.
Blockchain technology can be used to build more decentralized systems, which make it easier for the separate parties to interact directly. Thatâs what a number of companies, like Kind Ads
are working on.
Through their blockchain-based platform, ad companies will be able to work with users and content creators without going through an expensive and cumbersome third party, and that benefits almost everyone.
That means users will have control over which advertisers can use their data.
Theyâll be able to select companies who are selling things they actually want to buy and get rewarded for their data in cryptocurrency tokens.
"There needs to be a change because the publishers don't really get compensated well and the advertisers keep complaining the costs keep going up each and every year. The real winners are Facebook and Google, they keep the lion share of the money and all your data" says Neil Patel in a recent interview.
Advertisers will then be able to target ads much more accurately and cost-effectively. Theyâll be able to move away from annoying banner ads and focus more on personalized, âfriendlyâ methods like chatbots.
Meanwhile, content creators will be able to work more closely with ad companies and negotiate fairer payment for their work. Theyâll be free to devote more time to their hobby and produce even more of the content that their followers and subscribers enjoy.
Taking control of our data is becoming more important all the time. We need to aim for a new way of advertising that benefits everyone and restores power to individual users, and blockchain could well be the way to do it.