FaceSucker Costs Average American User $1,000/yr
The Market Ticker - Commentary on The Capital Markets
2017-03-05 05:00 by Karl Denninger
in Consumer , 488 references Ignore this thread
FaceSucker Costs Average American User $1,000/yr
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How's that for a headline?

It's true, by the way.

Here's how the numbers work -- Facebook says that the "average" American user produces about $25/quarter in revenue, or $100/year per-person.  Facebook makes nearly all of its revenue from ads.  It sells those ads to various product and service producers, whether it's a local bar or an auto manufacturer.

In order for such an ad to be worth it to the buyer it must produce more in net profit than it costs.

We can therefore determine the average cost to the American consumer who is on Facebook by taking that $100 in "revenue" and dividing it by the net profit margin of the businesses advertising, on average, then adding to it some sort of premium (since doing something that gains nothing is not worth it; ergo, it must return more than mere cost.)

The net profit margin has to be guessed at in aggregate, but 10% is probably quite reasonable.  Some places (e.g. a grocery store) make far less, some make more, and remember that it's only net margin that matters, not gross.

Now ask yourself this: If you're an "average" family you have 2.53 people in it, as of 2016.  In that average household there are probably two Facebook accounts, so the average family has a cost of using Facebook of at least $2,000/year.

If the average family has $50,000 worth of income (about right) then Zucker****er manages to take about 4% of your gross (pre-tax) family income.  If you're poorer on a percentage basis he probably gets even more.

The worst part of it is that he gets his cut of it, roughly 10%, without you realizing that you've spent the money.

Your auto insurance might be "uprated" without you even knowing it, due to your Facebook activity.
Your HOME insurance might also be.
Health insurance?  Might be.
Job offer with a lower salary (or not offered at all)?  Quite possibly.
But the real 900lb Gorilla is that you are nearly certain to be buying products and services you would not otherwise buy, at all, or for which you could have done better in price and quality absent your presence on Facesucker.

This has to be true or Facesucker would be out of business!

Folks, you may think $2,000 each and every year is a not-so big amount of money.  Anyone who doesn't want that $2,000 is welcome to send it to me; I'll buy rounds of drinks for everyone in my local pub with it until it's gone and the people there will get more value out of it than you will.

Further, I remind you that there are some of us who spend exactly zero as a result of Facesucker yet are on the system, and ARPU is an average so for each of us who spend zero someone else spends $2,000 per person instead of $1,000!

How can you stop bleeding from the ass like this?

DELETE YOUR ACCOUNT AND QUIT BEING STUPID.

Oh, this goes for all the other "social media" sites too - - Twatter, Instragram (owned by Facebook), Snap, etc.

No, you can't avoid it by using a pseudonym, a VPN or whatever.  Your behavior will give you away, and these days it's trivially easy for firms with access to "big data" (Zuckerpig Frankenstein is certainly one of them!) to figure out exactly who you are with a very high degree of reliability.

If you do delete your account and pay attention a few months later you'll likely notice that your wallet -- and bank account -- are both fatter.

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User Info FaceSucker Costs Average American User $1,000/yr in forum [Market-Ticker]
Ktrosper
Posts: 3246
Incept: 2010-04-06

ft collins co
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 by ktrosper
I generate exactly Zero.
My wife generates exactly Zero.
My 2 boys generate Zero.

There's a 4 person family out there generating $8,000 for the face****er..
/shrug sucks to be them - idiots.

Are they good at tracking exactly where a purchase comes from though?

example: If some douchebag clicks on a FB ad and buys a camera and I surf around on my own and buy that same camera. Do they know that one sale is credited to FB ad while the other is not?


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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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Quote:
I generate exactly Zero.
My wife generates exactly Zero.
My 2 boys generate Zero.

I bet that's not true. It MIGHT be, but if you think Facesucker isn't selling everything they learn about you..... yes, yes they are and to your detriment.

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Winding it down.
Robc
Posts: 12
Incept: 2009-09-10

Cincinnati
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Any chance it even worse, like economy shifting for those of us who don't use FB?

If every single major corp is advertising on there because they think they have to... add in all the click fraud... and maybe that some of the big ticket items they advertise are more brand imprinting on the young so they will buy someday other than a soon to be made purchase.

If the actual return on advertising turns out to be a lot less then everyone thinks, prices might be up that few percent already. I am just postulating and have no real market knowledge.
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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Possibly. But the far more-likely outcome is that they're surreptitiously getting you via the data mining.

This was one of the problems I had with a firm that I worked for before starting MCSNet -- the obvious ability to (radically) enable abuse of the data they were intending to collect without any way for you to know it. The sale of your purchase history standing alone in any "ordinary" retail environment is an INSANELY nasty thing when coupled with correlation analysis that is very easy to do given a large enough data set.

It is KNOWN that Amazon and other online "retailers" use this sort of thing already for pricing, despite the fact that there's a pretty clean argument that's illegal (Robinson-Patman.) I *know, factually* that insurance companies do it because I've personally caught one of them, and this was OVER A DECADE AGO. I'm sure they've both gotten better at doing it AND HIDING IT since then.

Trust me, if you're on social media and ESPECIALLY if you have any of their apps on your mobile YOU ARE GETTING GANG*****D by these practices.

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Winding it down.
Ckaminski
Posts: 4005
Incept: 2011-04-08

Mass-Hole!
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I deleted my personal account, but I still have one for my pet Zombie.

Quote:
advertising


How much of price inflation is costs related to advertising?
I used to believe all of it until I came here and learned about debt financing.
Krzelune
Posts: 5669
Incept: 2007-10-08

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If your pet zombie mimics you it makes little difference if the account has your real name or not.
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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Exactly.

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Winding it down.
Vernonb
Posts: 1742
Incept: 2009-06-03

East of Sheol
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Karl - Have I missed something?

Facebook gets additional money for every individual by selling info and many advertisements are targeted but it appears to me this business model hurts even non-Facebook users since advertisers have to pay for advertising and that means raising bulk prices for everyone.

I haven't been on Facebook really for years. Good luck trying to erase your account with these a-holes. I tried ~10 years ago. If my info is being sold, the advertisers are being scammed. That scamming means ineffective use of advertising dollars that must be recovered by price increases. If the item cost is too high and outside the consumer market someone will be out of business soon.

How do these businesses even really know their business traffic was generated by a Facebook presence unless it was a click from that website?

So how many millions of cat, dog, and other fake profiles are their on Facebook? Seems like Zukerpig has a vested interest in keeping fake profiles.

I've yet to see any brick-and-mortar business charge me anything based on some Facebook price or coercive Facebook membership 'discount'. Therefore I can only assume this is something that hurts all consumers. Perhaps one of your readers have had a different experience.

Personally I'm tired of all these businesses - especially grocery, drug, and service stations - wanting to know if I have one of their 'rewards' or discount cards. Like Zuckerpig they stick it to everyone and only those that are willing to sell their soul get a fair price.

In the end its always the consumers that pay for extra fees, taxes, advertising, etc. and Zucker is simply another pig at the trough sucking off the wealth (and privacy) of American people.


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"Mass intelligence does not mean intelligent masses."
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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Correct.

My point is that the most-invasive and perverse abuse of these platforms is the abuse you don't see.

Click "like" on something (or worse, one of the "enhanced" likes such as the haha, etc) and then go somewhere else on the web to buy something, and you have a decent probability of getting ass****ed on the price compared to someone who didn't do that. Further, if your online activity can be linked to you personally (and it NEARLY ALWAYS can be nowdays) that interference is going to extend to the "real world", at least where pricing has some individual component rather than a stickered, in-the-store price. (e.g. car insurance.)

IF you want to know what sort of value you are giving up on a weekly basis look at the local grocery store and their "rewards" card. It's pretty easy to get 20% off the basket price and NOT impossible to get close to HALF. You don't REALLY think that's "free" to you and not coming back to the store via the sale of the data, do you? If your grocery bill goes down by $2,000/year do you really think you're not paying the $2,000 PLUS EVERYONE ELSES MARGIN somewhere else?

Facesucker discloses the amount of value they get FROM YOU as a consequence of being there, because THEY HAVE TO as a public company AND since it's all advertising there's no way to hide it.

What people don't realize (but someone like myself, who purchased a LOT of advertising for my company, most-certainly DOES recognize) is that advertising, to be worthwhile, has to return not more in SALES than it costs but more in PROFITS, NET OF ALL EXPENSES (including taxes.) If it doesn't the firm surviving on that model won't be around long because as soon as those doing the advertising fail to get a return on their investment they will STOP BUYING.

Well, they haven't.

But that means YOU are the target of the extraction and since damn near nobody can identify how they spent a thousand dollars last year by virtue of what they saw and did on Facesucker the means by which the money disappears from your wallet pretty-much has to be on the "down low" where you DON'T SEE AND CANNOT DIRECTLY IDENTIFY IT.

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Winding it down.
Striped-pad
Posts: 89
Incept: 2009-03-15

UK
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Aren't you overstating the situation though, Karl? It's not like your net worth is decreasing by $1,000 per year more than it would have otherwise. You may have $1,000 less cash, but you have some goods and services which you wouldn't have had otherwise. And even if you wouldn't have bought them without the advertising, it's possible that you did actually really want them and just needed to know that they existed and where to get them.

The other point is that you may be spending $1,000 (or more!) less on things which you didn't want as much. The advertisers might be paying to have sales (and profits) go to them instead of their competitors.

I'm not trying to refute your argument completely, but I think the headline figure is a bit misleading.
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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So says the drug addict as he shoots up the next load of heroin....

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Winding it down.
Idiom
Posts: 81
Incept: 2015-02-20

New Zealand
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I was talking to a power company dude a few days ago... its worth it to him to know who the disaffected and disconnected people are.

They get ya coming and going.
Jymm
Posts: 413
Incept: 2012-01-22

Wisconsin
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No social media accounts, never had had one, never will. Still I bet it is costing me money. I mean companies advertising has to be paid for, and it must be figured in the price of the product. Best you can do is minimize Zucks profits by ignoring his site. I have no desire to share the details of my personal life with the World Wide Web.
Aztrader
Posts: 7730
Incept: 2007-09-10

Scottsdale, AZ
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Like all click on advertising, if you click on an add for a specific product, you start seeing their ads on every page you go too, not just facecrook. The system is designed to infect your cookies and follow you around hoping that you go for the bait. Unfortunately, Karl is right about the data mining and the folks that put their life on FB are too foolish to see what they are doing. When I see parents and grand parents putting pictures of their children and grand children out there for the world to see, I am wondering how many freaks are watching them too. This is golden for advertisers to aim their ads at these folks and target them for toys, clothes, etc.
Watch your mail and see if you get ads that may point to your information on FB. I love the fools that brag about their vacations or toys on FB not realizing that their local IRS agent may be watching. I tell everyone never to post anything personal including photo's on any site. Once it's out there, it's almost impossible to take down.
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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You will NEVER get rid of ANYTHING that you post on the Internet. Ever.

Yes, really, I mean NEVER.

All those who "preen" on the Internet are intentionally destroying themselves for the profit of others. Ego and vanity have literally killed many over the millennia and today you can do it without ever leaving your dining room table.

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Winding it down.
Elkad
Posts: 266
Incept: 2009-09-04

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I'm aware of the risks.
I've taken some mitigation steps (ublock origin, privacy badger, referral site spoofing, cranking my privacy settings up, never clicking a shared link, etc).

Are they still getting info from me? Damn right they are.

I'd love for the 94 humans (nearly all family) and 2 pets I'm friended with on FB to move to another platform. But it isn't practical (and some of them are idiots).

So I willingly accept the remaining risks. Fool Am I? Probably.
Bluebird
Posts: 1794
Incept: 2008-05-02

SW Ohio
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So I have a facebook with appx 30 friends and groups on my computer, not on my phone. Actually, I don't have any apps on my phone. My question is...if I don't click on anything they post in facebook, and I never 'like' anything, does facebook still capture what I see? Because facebook continually tries to post articles on my timeline that it thinks I am interested in. I tried to right-click and choose the option that the articles are not relevant, and facebook said they would find other articles that would be more relevant! I don't know how to stop that, other than deleting facebook, but my class reunion is later this year, and the group is only posting information via facebook.
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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I've told multiple groups and people that if they can't be bothered to do more than use Facesucker for their activities then I will not be there because I won't know about them.

Seriously folks, people planned and executed reunions and similar before Zucker****er and the additional effort was and is minimal. If they think so little of their own event and my being there to be unwilling to make any sort of effort at all then **** THEM.

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Winding it down.
Hstella
Posts: 674
Incept: 2009-08-18

Colorado
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Just a reminder. Don't post anything with you and booze and/or questionable activities. We had an employee call in sick on a Monday, when on Facebook she said she was out at 1am at a strip club. Employers wouldn't bother looking at Facebook pages, if they weren't occasionally a gold mine. I can't imagine that cops skip it either.
Aracoma
Posts: 20
Incept: 2015-02-17

Tuscaloosa, Alabama
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Quote:
You will NEVER get rid of ANYTHING that you post on the Internet. Ever.

That is so true. I can Google articles from my old .BITNET address (or userid%university.BITNET@CUNYVM.CUNY.EDU) from the 1990s or earlier. Ah, the good old days - BITNET, RELAY, RPL chips on token-ring cards, punch cards for fortran programs, AOL users not on the net..... :-)

Ckaminski
Posts: 4005
Incept: 2011-04-08

Mass-Hole!
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Quote:
If your pet zombie mimics you it makes little difference if the account has your real name or not.


It does not, it hasn't been updated since 2013.

Vernonb
Posts: 1742
Incept: 2009-06-03

East of Sheol
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Quote:
That is so true. I can Google articles from my old .BITNET address (or userid%university.BITNET@CUNYVM.CUNY.EDU) from the 1990s or earlier. Ah, the good old days - BITNET, RELAY, RPL chips on token-ring cards, punch cards for fortran programs, AOL users not on the net..... :-)

Yep with me USENET, ARPA, archived BBS systems... it's all still there for me in places going back to ~ 1986/87.

Damn showing my age now..... 30 years+ of internet activity when people had actually be able to read and turn on a modem.

2017 and still no compromising photos .... smiley



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"Mass intelligence does not mean intelligent masses."
Tickerguy
Posts: 148205
Incept: 2007-06-26
A True American Patriot!
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Any dick pics allegedly from me are fakes smiley

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Winding it down.
Attilahooper
Posts: 2707
Incept: 2007-08-28

New York, by way of Montreal Canada.
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I posted this some time ago but want to revisit for informational purpose in the context of the discussion.
Woman Loses Benefits After Posting Facebook Pics
http://abcnews.go.com/Technology/Aheadof....

I get a little bent when wife posts pictures of me and fam on facebook, she just doesnt get the implication. And there is no doubt that now there is a facial and geographic component to your identity.

I realize that online retailers charge different amounts for products based on your zipcode. They can get it from your ip, like they 'can we use your location' popup isn't a clue already. High income zips get quoted different prices.

Makes a lot of sense for EVERYONE to use a private vpn service. **** their scheme as much as possible. Anyone have rec's on a vpn svc? I honestly don't do any nefarious activities or disgusting proclivities, but I would pay money to **** their system of profitable discrimination.

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We are the Champions - No time for losers - Queen
https://www.youtube.com/watch?v=04854Xqc....

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