A new bill would tell you how much the ad-targeting data you give to companies like Google and Facebook is worth.
Nothing is ever free, especially on the internet.
Internet companies collect data about you — what sites you visit, what you buy, what demographic you fit into — in exchange for “free” use of their products, like Google’s Gmail and Maps or Facebook and Instagram. They use that data in part to make your experience on those platforms better, but also to target you with ads, which pays the bills and then some.
The problem is that consumers don’t usually know the extent of the data collected about them, nor do they know how exactly that data is used, where it ends up, or if it’s protected. Sometimes this data gets hacked or is used for more nefarious purposes than advertising. Google’s Chrome is basically a surveillance tool for the search giant as well as innumerable outside data firms, according to the Washington Post. Facebook is currently being sued for failing to protect the login and contact info for 30 million users. And that’s on top of the Cambridge Analytica debacle that renewed concerns about what tech companies are doing with their users’ data.
That’s why two senators from both sides of the aisle, Mark Warner (D-VA) and Josh Hawley (R-MO), pitched a bill Monday that would require companies like Facebook, Google, and Amazon to disclose how much your data is worth.
That made us think about how much of the internet — and the products and content we consume on it — are paid for by advertising, which advertisers will pay more for if it’s backed by data that tells them who they’re reaching. If tech companies didn’t have advertising, they would have less incentive to collect our data so extensively. But then they’d have to find other ways to make money, which means they’d likely charge us to use their services.
How much exactly? This is a rough calculation, but it offers a glimpse at how the internet’s biggest platforms could maybe, theoretically, function without almost completely sustaining themselves with our personal data.
US digital media owners — a company that sells advertising space or time online to advertisers, such as Facebook, Google, and publications like Vox — are expected to receive $106 billion in ad spending this year, according to ad measurement company Zenith.
Divide that by the number of adults in the US — about 250 million people — and you get $420 a year, or about $35 per month, per person.
Therefore, in theory, you’d have to pay $35 a month to replace the revenue internet companies get from advertising. In other words: An ad-free version of the internet as we know it would cost $35 a month, per person, if everyone was paying up.
“Many people are okay paying for one or two subscriptions that they use a lot, but they want ads to subsidize the rest,” David Pickles, co-founder and CTO of programmatic ad tech company The Trade Desk, told Recode.
Amazon and Google declined to comment on whether they’d consider offering ad-free versions of their services. Facebook did not respond to request for comment.
Facebook would get a big chunk of that $35 — about $10 a month, based on its average ad revenue per person in the US and Canada last quarter. Google would presumably get a bigger piece, since it controls more digital ad revenue than any other company, but its business and usership is more varied, so it’s more difficult to figure out. The rest would be dispersed among other online ad behemoths, and maybe there would be some pennies left over for news publications.
- A subscription-based version of all the internet platforms would be impossible to pull off. Distributing that $35 across all the places on the internet that host paid ads is too Sisyphean a task for us to attempt here.
- Your data might be worth more than our calculation, but this is what companies are getting as far as ad sales. Also, this number includes ads that aren’t targeted based on our data, which cost much less.
- Not everyone consumes everything, so the price of an ad-hoc subscription-instead-of-ads model of an internet platform would vary widely. Also, not everyone uses the internet.
- If these companies didn’t collect data, they’d be less useful. For example: Location data helps Google Maps come up with better routes for you, and the products you purchased before on Amazon could help you get more germane suggestions in the future.
- Targeted ads might not be that effective in the first place, so maybe all that data collection is for naught.
- There are ad-free and non-data-collecting competitors of all these services already. People are still choosing the ad-based ones. Some subscription sites serve ads as well.
- Also, the internet as we know it would be completely different without ads. Many of the companies we’re talking about would no longer be recognizable.
“If you stripped out ads completely, Google obviously wouldn’t exist in its current form,” Jonathan Barnard, head of forecasting at Zenith, told Recode. “You’d still be able to perform internet searches. Facebook wouldn’t exist in its current form, but you’d still be able to contact friends and family.”
Like we said, it’s unlikely that tech companies like Google and Facebook will ever shift to — or even offer — completely ad-free models, and it’s almost unimaginable that they’d ever stop collecting users’ data. But proposed legislation like Warner and Hawley’s bill is yet another sign that regulation is coming for tech companies, and at some point, they’ll likely have to reassess their reliance on our data.
Recode and Vox have joined forces to uncover and explain how our digital world is changing — and changing us. Subscribe to Recode podcasts to hear Kara Swisher and Peter Kafka lead the tough conversations the technology industry needs today.
Author: Rani Molla