Google also works directly with some of the thousands of data brokers in the United States, while the latter can sell this information to insurers, employers and anyone else who might be interested. The second method relies on advertisers bringing information such as e-mail addresses to Facebook. Depending on the provided information and user activity, advertisers can target ads to people who fit into the target market.
Facebook is confronting the adage, "If you don't pay for it, you're the product".
"We estimate in a worst-case scenario that between $1 billion to $2 billion of annual advertising [about 3% of annual revenue] is potentially at risk in 2018", Ives added in a note obtained by Barron's.
"Data collected on Facebook is to give users a better service".
What if I don't want my data used to show me ads?
But Williamson said some of Facebook's momentum was already fading due to other factors such as disinformation, social media fatigue and new platforms attracting young people. This is the same company that earlier this month sent millions of us a message saying that our information had been sucked up into the Cambridge Analytica vortex.
You may think that Facebook is taking this step as a response to the Cambridge Analytica.
We sell advertisers space on Facebook - much like TV or radio or newspapers do.
Besides, the search engine giant is able to use anonymous, encrypted information on about 70 percent of credit and debit card transactions in the United States through partnerships with outside firms. We could, for example, tell an advertiser that more men than women responded to their ad, and that most people clicked on the ad from their phone. One of the key questions that was asked was why Facebook needed all the data.
Data also helps us show you better and more relevant ads. For example, we can show you photos from your closest friends at the top of your News Feed, or show you articles about issues that matter most to you, or suggest groups that you might want to join.
Goldman said that digital advertising provided a level playing field for small businesses, and enabled them to reach an audience they never could have.
"You cannot opt out of ads altogether because ads are what keep Facebook free, but you do have different options to control how your data can and cannot be used to show you ads".
During a recent update of Facebook's Hard Questions, Rob Goldman, Vice President of Ads has revealed some interesting things about the social media giant's policy. Data lets a local coffee shop survive and grow amid larger competitors by showing ads to customers in its area. It found that 6 percent of Facebook users have deleted or deactivated their accounts, but nearly three quarters (73%) have not changed how often they use Facebook in response to the reports. You can remove yourself from interests under "Interests" and categories under "Your Categories".