A few years ago, the tech giants that own the largest internet companies faced a question – how could they monetize their services?
They had two choices. One was to charge theirs users subscription fees. The other was to keep services free, while selling ads. The choice was between making their users their customers or turning them into their products. We know today that they chose the second option.
But everything is free! Why should we care?
Let’s start with the obvious – customers generate revenues for a business. That is why “customers come first”, “customer is king” and every other customer obsession cliche exists. When we buy a burger at McDonalds, we are the customers. The store’s shelves hold buns, patties and snips of lettuce and tomatoes. Those patties and are made using cows and chickens raised in factory farms. Processing units grind and tenderize their meat to make patties. All these things and a little fry cooking makes up the product at McDonalds.
Customers are central to McDonalds (like any other business). McDonalds works hard to ensure that their burgers are safe, adhere to quality standards and are a bargain for their customers. To meet these ends, McDonalds goes the extra mile to increase production efficiency. It ensures that its machinery and industrial equipment operate at maximum efficiency.
Production is the process of turning raw materials into products. Products are merely the means for businesses serve customers. In effect, a business serves customers and optimizes production.
When the internet giants decided to turn their users into their product, we became a means to serve their new customers – the advertisers. Facebook sells ads. Its customers are most concerned about two metrics:
a) Who sees our ad?
b) How much of their attention do we get?
Ever noticed how those Youtube ads have gotten longer, more frequent and more stubborn with time?
Every internet giant that offers “free” services does so in exchange for user attention. Once they picked this business model, of course, their services had to be free. That is the best way to ensure that metrics a) and b) above are maximized.
Businesses live to serve their customers, not their products. McDonalds cares more for people who buy their burgers. Not the animals that produce it. A few years back, the internet giants made a choice. As their users, the choice now rests in our hands.
Unlike those poor animals, we have a choice. At least for now.