Ask the Expert: Does Facebook Make Money Off Of What Happens On My Smartphone?

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Q: “I am curious about Facebook and how it makes money…does Facebook actually make money off of what happens on the privacy of my smartphone when I’m not actually using a desktop or laptop to log in? I heard something new about Facebook ads and am concerned, again, about my online privacy. Help!”

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A: It’s no secret how Facebook makes its enormous profits: by selling your information to advertisers who then turn around and hit you with all kinds of ads on Facebook. Google does the same thing, by the way.

But Facebook has never been able to figure out how to serve advertising to mobile users who access Facebook on their smartphones. Until now, that is.

And this might mean that even users who access Facebook via their computer will have to deal with even more intrusive ads.

How Facebook Serves Sponsored Ads

Right now, if you “like” a product or company on Facebook, that product or company can serve “sponsored stories” to your newsfeed. These sponsored stories look a lot like normal posts from your friends. The only difference is that they contain a small “Sponsored Story” notice at the bottom right.

But now Facebook has begun a pilot program for mobile users in which they are allowing advertisers to place ads on your newsfeed for products or companies that you have not liked. These advertisements look just like sponsored stories, except that they have a “Sponsored” notice at the bottom right. Hard to tell the difference, right?

Facebook is selling this as a premium service to advertisers in order to (wait for it) make even more money. And while this program is currently only for mobile users, they plan on rolling it out to all users if it succeeds.

Facebook seems like it is counting on the fact that you can’t tell the difference between “sponsored stories” and “sponsored” newsfeed posts, and that you won’t remember if you liked a product or company or not.

Right now, Facebook makes over $3 billion a year on advertising, but they’re always looking for ways to make more. How much do they need? Apparently, more than that.

Opting Out of Facebook’s Social Ads

While there’s not much you can do about Facebook’s advertising policies, you can opt out of their social ads. These ads allow Facebook to use your name and profile picture when displaying ads to your friends.

While this is bad enough, their privacy policy states that they could use your name and profile picture in the future for third-party applications or ad networks unless you remove this default setting.

So it’s a good idea to turn these settings off. To do that, follow the instructions below:

  1. Click the drop-down arrow next to Home on the upper right side of the screen and select Account Settings.
  2. In the left navigation panel, click Facebook Ads.
  3. Click Edit third party ad settings.
  4. From the drop-down menu, select No one.
  5. Click Save Changes.
  6. From the Facebook Ads page, click Edit social ads settings.
  7. From the drop-down menu, select No one.
  8. Click Save Changes.

 

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Kent Lawson

Kent Lawson is the CEO & Chairman of Private Communications Corporation and creator of its flagship software PRIVATE WiFi. He combined his extensive business and technical experience to develop PRIVATE WiFi in 2010. The software is an easy-to-use Virtual Private Network (VPN) that protects your sensitive personal information whenever you’re connected to a public WiFi network. Follow Kent on Twitter: @KentLawson.

  • Aruna

    If you follow the above process on ur computer does it automatically apply across the board to all the devices that you use to access Facebook or do u for instance have to separately do it on ur smartphone?