Photo Credit: wikipedia
By now, you’ve probably heard that 80-90% of Facebook’s revenue comes from advertising. And so you probably assume that this means brands, companies and individuals are spending huge amounts of money on traditional ad units – like all those sponsored posts that keep showing up in your Facebook newsfeed. However, the dirty little secret about Facebook advertising is that a surprisingly large chunk of Facebook ad revenue comes from the social media giant simply selling data and lists to the highest bidder.
The RNC and list acquisition
Take, for example, the recent revelation that the Republican National Committee (RNC) has been spending millions of dollars to buy contact lists from Facebook. Between September and November 2019, the RNC spent $5.5 million for “list acquisition” from Facebook. Those lists can be very valuable since it rapidly speeds up the time to market and effectiveness of any new political advertising campaign. Say, for example, the RNC wants to run a new campaign focusing on President Trump’s response to COVID-19, or a new campaign focusing on how President Trump’s new economic plan is superior to anything the Biden camp might have. Well, all it has to do is turn to Facebook, and the Silicon Valley giant will gladly crunch the data and generate a list of as many people as the RNC needs to make a new advertising buy work.
According to official campaign filings, the RNC has spent nearly tens of millions of dollars for “contact lists” in the past year. For campaign purposes, these were not considered to be “ad buys” because no ads were bought or sold. However, you can think of these “list acquisition” deals as providing the raw material for future ad buys. With the right list, you could sell or market just about anything. And, in one insidious commentary posted by Salon.com, they even suggested that the RNC was looking to generate lists of far right white supremacists who might be open to the idea of a pro-Trump propaganda campaign featuring Nazi symbols. (OK, ok, this sounds a little ridiculous, but these are the times we live in now!)
The inside scoop on list buys
So what’s so dirty and sneaky about “list acquisition” buys? Well, for one thing, the people who appear on these lists probably have no idea that their personal information is being bought and sold. And, most likely, they would object if they found out that they were appearing on certain kinds of lists. What if you found out that Facebook considered you to be a Nazi sympathizer? What if, all of a sudden, you started getting ads from a certain pharmaceutical company for a COVID-19 drug because you became a fan of some Facebook site or joined some Facebook group? That might be a little bit creepy. Or what if you found out some political party thought they could “flip” you ahead of an election, and was tapping into all of your Facebook content to see which issues you might be open to changing your mind on?
Moreover, a lot of what’s so dirty and sneaky about Facebook lists is simply the growing ecosystem of gray, anonymous companies taking part in this business. In the RNC example, one huge payment in the amount of $5 million for list acquisition was made to a mysterious, third party company called “Digital Consulting Group LLC.” This might not strike anyone as being out of the ordinary, but what if I told you that the company has no website, and had only existed for a few months before the massive list buy? Hmmm….
Know your Facebook settings
The big takeaway here is that your data is being bought and sold on a regular basis by the big tech giants, but you are making no money from it. Your data is being exchanged with unknown companies, shared with unknown vendors, and used for unknown purposes. And it’s a huge, multi-million-dollar business. List acquisition might sound harmless – and maybe it is – but the idea that Facebook is making millions of dollars from your data is not so harmless. Now is the time to go into your Facebook account and tighten up all the settings so that you have greater control over what data and personal information gets shared and traded with others online.