Facebook Name Policy

Toysoldier Thor is going activist in an attempt to get Facebook to change their policy on names and allow anonymous users. I doubt such a change can happen because it would damage a successful financial model. But, I could be wrong. So, help him if you think it a good idea.

See: Time Facebook Fixes “Real Names Only” TOS.

How Facebook Makes Money

How Facebook Makes Money

I suppose if anonymous activists can figure out a way to have a financial impact on FB then they may be able to affect a change. But, to do that one must understand FB’s financial model. 

Only a small part of FB’s model is visible in the FB site. Those ads you click on (and how many ads do you actually click?) are producing the billions FB earns each year. The ads are the visible part. But, that is only a small part of the reason FB is profitable. The real profit comes from having, using, and selling marketing data about FB users. Click the image above or this link to see Ritholtz.com’s Big Picture site and the full graphic.

Pay attention to the ‘What They’re Paying For’ section of the graphic. The key for activists is in realizing the two elements to work on are ‘targeting’ and ‘engagement’. FB can target who sees which FB ads by login ID. RL identity would not seem to matter. But, advertisers want that person to see not just their FB ads, but also their Google, Yahoo, and other advertising services’ ads as they roam the Internet. This pushes Google, Yahoo, and others to purchase marketing data from FB to identify the user. The ‘cookies’ many think are tracking them, and they are, are just NOT going to provide what is needed. Cookies are limited by Internet domain names, in spite of lots of tricks and workarounds, they are not a satisfactory broad use solution for sharing marketing data.

Don’t think of the purchases of marketing data as lists of information. Think of clicking an ad at FB, say one for Dragon Naturally Speaking. Now FB knows you have an interest in Dragon. Google, Yahoo, and others will pay money to know that so they can effectively sell their advertising. But, FB has to be able to ID you in their system and pass usable ID info to Google, Yahoo, and whoever is paying for that information.

The value of that information for the purchaser is directly related to how accurate it is. Sending information about anonymous users that Google, Yahoo, and others cannot match to their visitors degrades the quality of that information and thus what companies are willing to pay for it.

Once upon a time web businesses made money from anonymous clicks on ads. FB, Google, Yahoo, and other online advertisers have worked furiously to build systems that can identify the user of a web browser. Why do you think Google offers so many really handy services to those that login? Because then they can identify different users on the same computer hardware…

And why do companies provide so many free apps for mobile devices? Because Google and iTunes free stores require sign in, identity.

The big money is in identity for targeted advertising.

I have little hope anonymous users can ever change FB’s management’s thinking, anything is possible. But, ask if it is reasonable. Until people can find a reasonable, big money making incentive to change minds at FB, it is reasonable to think things will probably stay the same.

Change the system or if that is not possible learn how to use it to your advantage.

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