Social media – …if it’s free, you’re the product

by Tony Fannin, CEO/Partner, BE Branded  |

“If you pay for it, you’re the customer. If it’s free, you’re the product.” This is the core of what social media and some of these other “free” sites are. It’s a very interesting concept to think about. There is an explosion of Facebook wannabe’s. Twitter, Pinterest, Pandora, Instagram, Last FM, etc., etc., etc. Many have VC money thrown at it in the hundreds of millions of dollars. The common thread with all of these is none of them are profitable. Many are still wondering how they are going to make money.

With this as a backdrop, how do you feel being the product? None of these sites will ever hope to figure out how to make money unless millions of us freely post our photos, comments, and friend each other. Because it’s free to the public, it will be hard to ask for a fee and not have a mass exodus of users. We only will tolerate so many text ads, online commercials, and banner ads before the site loses it’s charm and appeal. But, without the general public, they have no product, in spite of the cool technology and platform they have created. The only real asset they have is to leverage our personal data.

There in lies the rub. It’s ok if we share it, it’s not ok if you sell it. The ironic thing about this symbiotic relationship is the technology is not the product, we are. It’s like we are the cattle in the walled garden built by the social media entrepreneurs. There is still a lot of experimenting and dipping-the-toe-in-the-water by marketers. How do you insert your brand into the conversation without becoming the “creepy uncle who just crashed your Facebook page”? How can a brand stay authentic without selling, knowing ultimately, sales need to come from the investment in the site?

There are equally challenging questions on the social media side. How do I actually make money without pissing off millions of my users? If we don’t eventually make money, how long will the VC’s sucker up and keep pumping money into my site? If we do start making money, will be an outcast from the social media ethos club? And does that really matter?

An answer that comes to mind is the answer for both brands and sites: Pay me. The general public is the real asset here, so why not reward them. If you are a brand, reward me for engaging with your brand. Even if it’s to tell you how bad your customer service is on twitter. At least I cared enough to complain. Just asking me to “like” your brand isn’t rewarding. In fact, it’s stupid. Give me something of value so your brand has a chance to be special to me. If you are the social media site, just letting me use the platform is not enough anymore. There are too many new sites coming online every quarter. Just because you’re hot today, doesn’t mean you will be in 18 months. (MySpace, Digg, Groupon anyone?) If I’m the product, I deserve additional benefits as well as monetary rewards. If I’m the product, then what’s in it for me?

Some sites have been toying with the idea of offering all their users a cut of the financial action if they sell their data. It may be just nickels and dimes, but at least they recognize that it is our data and we are the product to advertisers. The privacy laws are going to increase the pressure on this issue of who’s data (product) is it anyway. So, how do I stay authentic, but still make money? As a brand or as a social media site, if you can navigate this question, you may unlock the mystery that has, thus far, been out of reach of the hundreds of social media sites.

Show me the data. Show me the money.


About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.


  1. The Free Web Kübler-Ross Model by the mergy notes - December 18, 2012

    […] get to this step, you eventually realize this is all part of the game. Those services you used for free made you the product. You gave them value because you and others are looking at your own stuff. They just provided the […]

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