Towards transparency and privacy in the online advertising business

What is the value of your personal information?

Have you ever asked yourself how Google, Facebook, Twitter, websites, etc are offering free services of high value to end-users? Obviously they are businesses and they final goal is making money, therefore if you are not paying for those services probably you are the product. A major part of the Internet Business model consists on showing ads aligned to the profile and interests of Internet users, the so called targeted or programmatic advertising. Those profiles are constructed by using or inferring personal information and interests for each user.

In a nutshell we could state say that our personal information is the currency we are using to pay the Internet services we use every day.

The next question that arises is whether we all have the same value or rather each of us have a specific value based on her particular profile and interests. The answer is that depending on your profile you will have a different value for the market. In addition, you should know that the value of your profile changes over time according to the money advertisers are willing to pay to show their ads to Internet users with your profile.

At Universidad Carlos III de Madrid (UC3M) we have developed a tool that allow us to measure the market value of a given profile in Facebook. For instance in April 20th 2016 at noon the median cost of showing 1000 ads impression (known as CPM in the online advertising market) to US users was $4.82, while it was approximately half of that for Spanish users $2.54, and higher for Japanese users $6.36. Just 24 hours later those values have slightly decreased in the case of US to $4.65 (-4.7%) and increased in the case of Spain and Japan to $2.63 (+3.5%) and $6.59 (+3.6%), respectively. The next figure shows the market cost evolution of four different profiles referred to Spanish users interested in one of the four main political parties during the month of December 2015 aligned to the market cost associated to the profile referred to Spanish users without any other characteristic (stated as baseline in the figure). The figure illustrates that there exists a large variability for the value that the market assigns to a particular profile.

graph uc3m

At UC3M we are developing a tool referred to as Facebook Data Valuation Tool (FDVT) that estimates the value that a user is generating for Facebook while browsing in the Facebook website with her personal computer.

We believe that informing end users regarding the value of their personal information will stimulate their interest on privacy, and will help to create a more transparent and ethic Internet.

About the author
Ángel Cuevas Rumín | UC3M

Ángel Cuevas Rumín | UC3M

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