Wednesday, July 7, 2010 - The Progress & Freedom Foundation Blog

Privacy MythBusters: No, Facebook Doesn't Give Advertisers Your Data!

Working in any field of public policy is a bit like living in a haunted house: You spend most of your day dodging bogeymen, ghosts, phantasms, phantoms and specters of imagined harms, frauds, invasions and various conspiracies supposedly perpetrated by evil companies against helpless consumers, justice, God, Gaia, small woodland creatures and every sort of underserved, disadvantaged and/or underprivileged group of man, animal, vegetable and mineral imaginable.

But Internet policy--particularly online privacy--tends to be haunted by such groundless imaginings far more than most other areas of policy, largely because it manifests itself in ways that are far more real and immediate to ordinary users. For example, as outraged as any of us might feel about the Gulf oil spill, how many of us have the slightest clue what's really involved (beyond what we've learned watching TV anchors stumble through a vocabulary they don't understand)?

By contrast, huge numbers of Americans have daily interaction with web services like those provided by Google, Microsoft, Yahoo, Twitter and Facebook. That doesn't mean we necessarily understand how these technologies work. Indeed, quite the contrary! As Arthur C. Clark said, "Any sufficiently advanced technology is indistinguishable from magic." But we often think we know how these technological marvels work, and certainly sound much more informed when we spout off (pun intended) about these things than, say, "top kills" on the bottom of the ocean floor. In short, we know just enough web services to be dangerous when we ground strong policy positions in our unsophisticated understanding of how things really work online.

There are few better examples of this than the constantly repeated bugaboo that "Facebook sells your data to advertisers!" Or "Facebook only wants you to share more information with more people for advertising purposes!" These myths bear no relation to how advertising on social networking sites actually works, as Facebook CEO Sheryl Sandberg explains beautifully in a short tutorial video. Here's the key portion:

We also protect your privacy by virtue of the way our advertising system works. Because our system chooses which ads to show you, we don't need to share any of your personal information with advertisers in order to show you relevant ads. In order to advertise on Facebook, advertisers give us an ad they want us to display and tell us the kinds of people they want to reach. We deliver the ad to people who fit those criteria without revealing any personal information to the advertiser.

The only information we provide to advertisers is aggregate and anonymous data, so they can know how many people viewed their ad and general categories of information about them. Ultimately, this helps advertisers better understand how well their ads work so they can show better ads.

And here's the video:

You can't blame average users for not understanding how Facebook's ad system works. That doesn't make them stupid! They may be ignorant, but their ignorance is perfectly rational. Ultimately, it's up to companies like Facebook to try to overcome the perception-of-technology-as-magic problem--lest consumers assume it must be black magic. Still, I'm sure we'll keep hearing this myth repeated in the future, as similar myths have been in other areas of the privacy debate. I only wish more companies would prepare similarly concise videos that explain how their systems work to dispel some of this technopanic hysteria. Here are two particularly good examples of effective tutorials:

Oh, and on the myth I noted above, I'll just reiterate what I've said before:
It's a myth that Facebook is hell-bent on getting users to share more information more widely for the sake of of advertisers. In fact, advertising on Facebook doesn't involve sharing information about users with advertisers. In fact, advertisers buy ads that Facebook shows to users Facebook (or rather, its algorithms) thinks might be interested. If anything, sharing more information can actually help Facebook's competitors if users take advantage of Facebook Connect's data portability to port their data over to competing platforms. So the widely perceived conflict of interest between Facebook's economic interests and users' privacy just doesn't exist. The site gains from having more users spend more time on the site, not from tricking users into "giving up their privacy."

posted by Berin Szoka @ 8:56 AM | Advertising & Marketing , Privacy