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By Greg Lipper • April 20, 2018Comments

Consumers Value Privacy; Just Not Enough to Pay for It

The recent grilling of Facebook by politicians all over the world led me to question if the world has really gone crazy. I always assumed everyone understood that nothing is free and that if you use something that costs billions of dollars to develop and maintain (like the Facebook platform) for free, then there is something you have to give for what you take.

So, since we have a platform that enables us to ask Asia anything we want, I decided to do just that. Starting with Singapore.

First, we asked 334 people in Singapore this question:

How do you think the recent Facebook data scandal will change the way you use Facebook?

Here is what they said:

 

So, roughly half the people had it figured out already that there is no such thing as privacy on a free network, so they aren’t silly enough to post things they consider private. Good!

18.5% of people don’t care and don’t get what the big deal is. Count me in with that group!

However, 20% of people said they will post less and 4% said they will cut way down or stop using Facebook entirely. Ok, so that means about 25% of people were surprised that something they post on the WORLD WIDE WEB could actually be seen or used by people they didn’t intend to do so. Hmm. Live in a fantasy world much? Think all of that magical stuff you use on the Internet is made on a whim by companies with no profit motive? If you aren't paying for it, it is probably supported by an advertising model. Advertisers want precision. Everything you post qualifies you in some way and that's what makes your posts valuable to the platform and why they provide the service to you free of charge. People who don't understand this already by the ads they see just aren't paying attention.

So, then I decided to test the hypothesis that consumers value privacy and, since they value it, they are willing to pay for it.

I asked:

If there were a Facebook subscription that offered complete privacy and blocked all advertisements for $10 per month, would you subscribe?

Guess what….

Just 10 percent would pay a whopping $10 a month for privacy and ad-free enjoyment of Facebook. Hmm. Ok, so maybe $10 is too high.

Next, we asked the 66% of people who said they do use Facebook frequently but wouldn’t pay for a subscription for $10 a month this:

Would you pay even $1 per month for an ad-free and privacy guaranteed subscription to Facebook?

Survey says…..

Roughly 80% of responders wouldn’t pay even $1 a month.

I was relieved to confirm through this survey that most people in Singapore understand that Internet platforms, just like shopping malls, are free to enter, but retailers will try everything they can to understand, engage and sell to you including observing you in ways of which you are not aware and these platforms, like shopping malls, will do all they can to maximize sales for their clients.

The insight for marketers though is that most consumers won’t pay even $1 a month for something they have come to think of as free. What does this say for marketers of content people are accustomed to receiving for free? I guess it means they need to build value outside the content in the form of premiums, membership perks, sweepstakes, or something that can’t be pirated.

The insight for voters is that politicians are using consumer privacy protection as a the justification for regulating and controlling an industry and technology that can influence people in ways governments can’t control or even see. That’s scary stuff for any elected official. So, when you see senators grill Mark, just understand it isn’t consumer privacy they are trying to secure, it’s their next their control of the election process they want to secure.

We will next run these same questions in other countries. Stay tuned for the results.