Businesses are driven by their incentives, which are their business goals. The business goal of every for-profit company is quite simple:
- Make as much money as possible.
This is natural for a business, as it is what the owners, the shareholders, want. However, problems are caused when the business makes profit through advertising. What’s the recipe for making money as an advertising business:
- Get more users (more people to advertise to)
- Increase user usage time of the service (show more ads to each user)
- Collect more data on the users (to target better ads, and make points 1 and 2 easier)
1. Get More Users
This is why advertising-based services start off very compelling. WhatsApp is a good example – for a long time it was a very compelling messaging platform.
However, this incentive also pushes these services to create lock-in wherever possible, and encourage their active users to push the service onto all their friends and colleagues.
2. Increase Usage Time
Things start to get a bit worse for the users here. To increase usage time advertising companies will do things that are actively harmful for their users, like not showing you the content you “followed”. Think about the Facebook News Feed here – it doesn’t show you all the content from all your friends immediately, instead it makes you scroll through a lot of other suggested/advertising content to find it.
Worse, it encourages services to build addictive cycles into the service. By creating a system that gives you small addictive boosts, it teaches your brain to come back to the service at every opportunity. These addictive things can include showing content you really like, or that you really hate, which helps drive the extremes in our societies. The tools that these services use are the same tools that gambling services use to addict you.
3. Collect More Data
Because the service wants to get more users, they need to know who you are connected to, and how to get them to use the service, so they collect data on you, and anyone you are connected to.
Because they need to hook you into the service, and keep you coming back, they will be pushed to collect any data they can about your likes, dislikes, location, everything. Any piece of data may provide an advantage, so the logic in the company is just to “collect it all”.
Because of this incentive structure, advertising-based companies will never build a service that is entirely for the user’s benefit. Because of this, I avoid these services wherever I can, and you should too. Look for services that have a better business model.