With well over 1 billion users, browsing Facebook is a daily habit for many people. Millions are also regular users of other Facebook-owned apps such as WhatsApp and Instagram, making Facebook’s global reach is even broader. Each time a user views a page, uploads a photo, or likes a celebrity’s post, Facebook is tracking it. With billions of photos, posts, and likes, that’s a lot of data.
Facebook is also a big business: in 2016, they made something like $20 per user per year. Where does it earn all that money? From advertising. In fact, according to Facebook’s latest investor report, $26 billion came from advertising alone, which turns out to be a whopping 97% of their total revenue for the year.
With billions of dollars at stake, Facebook has worked hard to increase the number of businesses purchasing advertising space on their platform. In 2016, the company started a new way for advertisers to track customers who click on ads on Facebook. Called the Pixel, it’s an invisible bit of code that is embedded in a business website. Once the customer clicks on the ad on Facebook, the business might track everything from the amount of time spent on the website to how many items are purchased.
The Pixel is not the only way Facebook can track the buying habits of users. ProPublica recently reported that Facebook regularly purchases data from so-called data brokers. In addition to all a user’s likes and posts, this data enables Facebook to sell targeted advertising even more effectively, letting businesses create “custom audiences” for certain ads. Businesses can also upload customer lists that they’ve put together through loyalty cards and email subscription lists. Facebook rakes in billions by knowing that a user shops at a particular grocery store or retail outlet, often with the user completely unaware that Facebook is tracking their offline life.
With more and more of our habits being tracked both on and offline by big business, what can users do to protect their privacy? Stay tuned – over the next few weeks, we’ll be posting some practical tools and tips to reduce your digital footprint.