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A little understood notion is that for those people using free services and apps, you are the product and generally speaking the advertiser is the customer. The exception is when no ads are shown and confidential information isn’t disclosed to third parties but instead the provider of the service gives away a free version in the hopes of getting users to upgrade to a paid one.
Recently the Wall Street Journal ran an opinion piece where they suggested that the EU lay off of its antitrust investigation into Google because the search service used by 90% of Europeans is helping consumers. The issue in question is Google’s move from a general search provider into silos of search such as travel, etc. Some are worried that Google is now promoting results from its own services over similar and perhaps better results from competitive entities.
The needs of the customer are taken into account when determining whether a company has become too big, has attained too much power, has become a monopoly, etc. Wal-Mart is likely a good example of an absolute retailing monster which has not only become the dominant retailer but also has kept prices low allowing consumers access to better pricing than they would potentially otherwise get.
More recently the newspaper published a response letter from Scott Cleland the publisher of GoogleMonitor.com which makes the point that the customer of Google is not the consumer but in fact, the advertiser is. He further debates a premise of the opinion piece which argued that the Google antitrust accusations are similar to ones brought some time back against Microsoft. In that situation he argues, the consumer was the customer.
This reminds us that in today’s world where services are provided for free, the consumer is generally an asset and the information they provide is leveraged to generate revenue.
As the CEO of a media company, TMC the idea is not lost on me – the last decade has seen a massive shift from marketers who are looking for information about users/readers to justify their marketing spend.
In other words, the world is changing and either the marketers are leading it or services like Google and Facebook are. Either way, there is an insatiable desire on the part of companies to get at data – either as leads to ensure they can have a full pipeline to use when selling products or as demographics to determine that their message is reaching the right audience.
In some cases this evolution of marketing is positive as companies can target their marketing dollars more efficiently and subsequently have lower costs which are passed along to consumers as savings.
But the challenge for consumers is they may not realize they have become assets. One company I wrote about a while back NQ Mobile mentioned this to me as well as they showed me their app which runs on Android to determine which other apps are divulging your personal information.
But getting back to Google, Scott is correct – it is the advertisers who are hurt if there is a monopoly service provider, be it in social networking, search or anything else for that matter. Moreover, he reminds us we need to change the way we think of consumers and customers in a world where services are given away for “free.”