The Real Cost of Advertising on Facebook

You'd be shocked to learn how little your account could cost.
You’d be shocked to learn how little your account could cost.

In the past month, blog posts and articles are beginning to pop up asking a very important question that it’s taken a shockingly long time to ask: How much does Facebook actually cost?

We’re not talking about buying out the company, of course; but what about your own personal account?

Right now, we’re all inundated with ads and sponsored posts — and if you want to use Facebook, you just have to deal with those annoyances. For many digital platforms that are free to users and sustained by ad revenue (like Hulu), there’s an option to pay for a subscription so that you can have an ad-free experience (Hulu Plus). But not Facebook.

Is that because it would just cost users too much money to make it worth the social network’s while? With a membership of 1.44 billion as of the first quarter of 2015, what’s the actual value of an individual subscription on Facebook?

A New York Times article reports that each user costs Facebook a paltry 20 cents per month. It seems so inconsequential when you look at it in an isolated capacity. Doesn’t that mean that Facebook could charge us $9.99/month, like Netflix, to give us an ad-free experience? We have to assume that a huge percentage of users would choose this option, and that actually would equal a hefty profit for Facebook.

So why can’t we pay for subscriptions on Facebook?

Think about it: This is about more than getting those silly sponsored posts out of your NewsFeed. It’s about controlling your privacy. That’s because the real earner for Facebook and other ad-financed platforms is actually all of the data that they collect while you’re using them: your usage stats, your preferences, your location and much, much more information about you. They can sell this data to advertisers to better target you and, in turn, sell more to you. If you owned your subscription, then you could tell them to knock it off and leave your privacy private. You would buy the rights back to your own data, and that is more valuable to Facebook than $9.99 per month.

In turn, Facebook is serving advertisers rather than its users, because we are not the client. Your whole experience with Facebook is based on how advertisers want you to engage with their content. The only exception is when this format annoys people so much they stop logging on. Any middle ground is fair game when it comes to the value of data-driven marketing — and how much it really costs us.

Next week, we’ll discuss what data-driven marketing means for your business in 2015 — even if you’re not a social media giant like Facebook.

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