How Big Corporations Profiteer Off User Data
It’s no secret that huge corporations, especially those in the technology field, collect and sell user data for a profit. Facebook, Google, Amazon, and many others have been accused and proven as participating in this practice, using their users’ information to create an additional stream of profit. Most recently, over 87 million people were involved in a Facebook data breach scandal. Yet, this is far from the first event of this nature we’ve seen over the past few years.
By having complete control over user information, data, sharing laws, and owning all data produced, companies like Facebook and Google are able to generate huge profits from their clients. Personal data they collect could be anything from volunteered information like what films or music a user likes, demographic information, or inferred data about a person’s interests or hobbies.
By selling this data to other companies, Facebook and Google are able to provide businesses with a more specific client audience to then advertise to. Instead of advertising to an audience randomly and hoping that the users are interested in your product, you can buy access to smaller user groups that are built on this stolen user data.
Even though the user doesn’t benefit from this business structure, it is their data that drives this entire industry. The way that Web 2 has structured this relationship ensures that users never see any profit from the sale of their own information and consumer data. Over recent years, more people than ever before are turning to Web 3 applications like Phaver to take power back into their own hands.
In this article, we’ll dive into how big corporations collect and sell user data, demonstrate why users are missing out on this profit, and outline how Web 3 is becoming the general public’s favored way of regaining agency over their data.
Let’s dive right in.
The Web 2 Approach to Customer Data
The data industry, one which is entirely driven by the unconscious capturing and distribution of user information, is now approaching well over $2.15 billion in market value. This industry is hugely important, feeding directly into marketing and sales in order to sustain these other fields. Without information, marketing teams cannot create personalized or specific campaigns, lowering the effectiveness of their strategies.
Web 2 has long understood the power that user data has. However, instead of rewarding users for providing a rich pool of information, they take the approach of taking complete ownership over all data that is produced online. Not only does this produce a huge influx of capital for the business, none of which the user sees, but it also is notoriously difficult to trace.
Users have no control over where companies like Facebook and Google sell their data. The extent to which data is shared is equally nebulous, with some users realizing that even data from private phone calls over services like Facebook Messenger was captured and sold. Without any control over what data is scraped from their profile or where that data goes, users are powerless over their own information.
One of the main functions of this sold data is targeted advertising. Facebook and Google will build up complex user profiles based on interactions you have made on their profiles. From there, they will sell that information to companies that want to sell products to you, without Facebook or Google giving you a cent for the valuable information you have provided.
By clicking “agree” on the initial Terms and Conditions documents, users give up the right to their own data. While this has been seen as the norm in the Web 2 industry, Web 3 is set to completely change that.
How Web 3 Presents an Alternative Vision of Data Management
Web 3 applications, like Phaver, understand that users should have complete control of their own data. Instead of forcing users to give up their data or to sell it to specific marketing agencies, Phaver allows people to choose where their data goes. They can opt in or out of different marketing schemes, understanding exactly where their data is going.
By opting into marketing strategies that share their data, they are also directly rewarded. Not only do they gain a form of currency, but it also allows them to directly trace where their data is going. For marketing teams, this new system also helps to increase sales. Anyone that sees an ad from a company has specifically opted into marketing opportunities in that industry, meaning they are more open to interacting with new products.
For consumers and businesses alike, the Web 3 system of dealing with and distributing user data is much more effective for all involved parties.
The ongoing era of Web 2 collecting, using, and selling customer data is coming to an end. While tech companies like Facebook and Google still have the majority of the market share, the tides are now beginning to shift. As new Web 3 applications continue to develop, like Phaver, which offers users an alternative path, customers will have a more active decision on how they want their data to be used.
Consumers are coming to a fork in the road. On one pathway, they can continue to use Web 2 media companies and offer them their data in return. However, the new Web 3 pathway presents the opportunity for users to get paid for their own data, while still accessing the same services as their Web 2 counterparts.
As Web 3 continues to grow and expand, it will become an increasingly attractive option for users, helping to pull more consumers from the tech-centric and capitalistic grasp of Web 2 into a new age of using the internet.