What Walks, Talks and is Worth $100? You – Social Media Value Exchange

Is your Facebook account worth $100 to you?  Probably, but have you really thought about it?

Is your Facebook account worth $100 to you? Probably, but have you really thought about it?

Nothing in life is ever free, even free accounts in social media platforms and email platforms.  We always dismiss those that tell us to beware of things that are too good to be true.  We like things to be too good to be true.  When Facebook hit the scene, we all flocked to the site.  The opportunity to connect with friends, new and old, and hear about the new developments in their life was almost too much for many of us.  What you did get over time was sponsored stories, targeted advertising and custom audiences.  All ways for Facebook to make money.

Every company is in business for one thing generally – to make money.  Money is the driver of all things.  It keeps us clothed, fed and sheltered.  For companies it helps them make payroll, pay for raw materials, etc.  For publicly traded companies, the money that they make supports the share price, which shareholders want to ever increase.  Do something that hurts your share price and face a shareholder lawsuit, however frivolous it may be.

Do you agree with me that Facebook, Twitter and LinkedIn are in it for the money and not for some global good motive?

What are you worth to them?

There are a few methods of valuing your presence on these platforms.  Most of them are hard and require very detailed knowledge of internal proprietary systems and processes.  If a platform is driven by advertising revenue, you represent a certain amount of revenue to them every year as you are one of those impressions they sell and charge for in their cost per impression calculation.

The easier way to do it and the sexier is dividing market capitalization by the number of active users.  In a recent Forbes article, George Anders does the simple math and comes up with an interesting conclusion.  You are worth about $100 to each of the three platforms.

Are you getting your money’s worth?

Here is the more interesting question for you.  Does the value of your access equal the value of you to them.  $100 is an interesting number to throw around and is great for headlines.  For each user personally there is a different calculation.  How much information do you share of yourself on these platforms?  Your social graph, your birthday, your relationship status, textual updates about your life, photos of you and your friends, your travel history and the like all are bits of information that increase (potentially) your value to the platform.

Interestingly, the argument goes, the more information you share the more valuable the platform is to you.  Your engagement goes up, your connection with your network goes up.  The nice thing about George’s calculation is that it doesn’t matter how engaged each user is.  So for the new ‘active’ user the value is about $100.  For the established, and well-engaged, ‘active’ user the value is about $100.

If this was truly the case as it relates to the bottom line, there would be no incentive for the platform to try to engage you any more.  You would be worth what you are worth.  That is the problem with simple calculations.  Great for headlines, less great for true individual analysis.

Evaluating your own engagement and worth

Each user has to look at their own activity and see if it is worth it.  If you are required to give your email address to a game to play, what are you giving up, and what are you getting.  A few hours of enjoyment may be enough to justify some marketing email (spam seemed too harsh a word).

The issue that all privacy advocates are talking about is that while the user may be good at evaluating the instant value exchange, they are less good at evaluating the future cost.  Your email is taken, you play your game, and two months later it is included in a custom audience campaign on Facebook.  Perhaps then your social graph gets exposed as you click on something there based on that.  I call this lack of downstream control.

It’s not that users don’t care, we don’t give them the opportunity to

We get studies like I highlighted last week that seem to stand for the proposition that users don’t care.  They don’t read agreements.  They don’t understand agreements.  I cry foul on the conclusion that they don’t care.  The brands don’t allow them to care.

Privacy agreements are written to not be understood.  I evaluated several privacy statements back in August and not one of them passed my simple readability test.  Not a single one.  Is the information so complicated that it can’t be written easily?  Absolutely not.  Even if it was, people get paid lots of money to write these things.  They are highly skilled and experienced.  They are able to write it at an accessible level.  They just don’t do it.  In short, they don’t care.

Brands don’t care about whether you understand.  They only care that they checked the box that they gave you the information, no matter how complicated the form.  If the average level of education in the US is grade 12, and the reading comprehension required to understand a privacy statement is grade 12, that means that roughly half are not educated enough to understand.  (Note: I know that median, not average, means half above and half below, but I said roughly, so please put your reverse polar calculators down)

Make your assumptions and move on

As a user, I think you should assume that everything you share will be made public, either directly or indirectly.  Assume that and then evaluate whether you are getting value for yourself.  If you are, go about your day.  If not, perhaps think again.  Protect thyself.  Or as they said on The Brady Bunch, caveat emptor (buyer beware).

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