#data value

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How much is your data worth to TikTok?

Here’s an excerpt from one of my previous posts(check it out, too) on how TikTok packages and monetizes user data:

“It’s widely accepted that 18-34 is the most coveted age demographic in advertising due to their willingness to spend money, receptiveness to advertisements, and ability as tastemakers.

Low-end estimations have TikTok averaging 80 million monthly active users in the United States. Of those 80 million, Statista.com reports that almost 70 percent of users are between the ages of 10-40. That means TikTok is able to reach 56 million users aged 10-40 every month.  For comparison Facebook, the largest social media platform in the world, averages over 100 million more monthly active U.S. users(190 million) than TikTok, but only 43 percent cover the 10-40 demographic. This closes the margin to Facebook’s 76 million of the most coveted users on earth to TikTok’s 56 million.

If TikTok is able to prove to advertisers that their 56 million users are more valuable than Facebook’s 76 million users through engagement statistics, gender data, or retention rates, then they own a major market over one of the founders of the economy.”

So we know how many users TikTok is able to pitch to advertisers, but how much is that packaging of user data worth in a pitch to advertisers?

According to Robert Shapiro and Siddhartha Aneja, the average projected value of  U.S. user data stored by Google, Facebook, Amazon, Oath(Verizon) and Twitter was around $11,300.82(in billions). However, that number factors in major non-social media platforms like Google, Amazon, and Verizon, so let’s focus on Facebook and Twitter.

We already know that Facebook averages nearly 200 million U.S. users and TikTok averages about 80 million. According to Statista, Twitter is less than both platforms with around 69 million monthly active users. Based on these monthly active user numbers and Shapiro and Aneja’s findings of Facebook’s projected user data worth($21,948.6 in billions) and Twitters($749.7 in billions), we can infer that your TikTok data, compiled with millions of others on the platform, has a floor of $749 billion and a ceiling in the trillions of dollars.

Is this use of data a type of surveillance? Short answer, yes.

According to Business of Apps, TikTok generated over $500 million in U.S. revenue alone in 2020. TikTok is able to generate over half a billion dollars in revenue while remaining free to users because it operates under what is known as a “surveillance economy”. Popularized by major platforms like Google and Facebook(more on them later), a surveillance economy incentivizes popular platforms to monetize their users by collecting user data, drawing trends from said data, then selling those trends to high-paying advertisers.

The exact type of surveillance is known as “automated surveillance”. In terms of TikTok, automated surveillance is the storage, collection, and processing of any useful information on users. This information can range from simple variables like age and gender to the most detailed bits of information like what time a day a user usually visits or the average amount of time spent on a particular post.

The more detailed information the better because it allows TikTok to package and pitch that information to advertisers.

An example of how this works + how TikTok benefits:

It’s widely accepted that 18-34 is the most coveted age demographic in advertising due to their willingness to spend money, receptiveness to advertisements, and ability as tastemakers.

Low-end estimations have TikTok averaging 80 million monthly active users in the United States. Of those 80 million, Statista.com reports that almost 70 percent of users are between the ages of 10-40. That means TikTok is able to reach 56 million users aged 10-40 every month.  For comparison Facebook, the largest social media platform in the world, averages over 100 million more monthly active U.S. users(190 million) than TikTok, but only 43 percent cover the 10-40 demographic. This closes the margin to Facebook’s 76 million of the most coveted users on earth to TikTok’s 56 million.

If TikTok is able to prove to advertisers that their 56 million users are more valuable than Facebook’s 76 million users through engagement statistics, gender data, or retention rates, then they own a major market over one of the founders of the economy.

This brings me to my next point.

What are the major implications of TikTok’s storage of user data?

On one end of the spectrum, the end of the spectrum that TikTok wants users to believe, the only implication that stems from storing user data is a better in-app experience. TikTok will only use user data to make sure users see videos of things they enjoy, advertisements of products they wished they had, and recommendations of accounts they’d like to follow. This is how Google knows exactly what you’re looking for no matter how obscure and how Facebook is able to show you just the post you would like.

So what’s the catch? I already mentioned it.

Users can’t get the good end of the spectrum without the risk of falling victim to the bad. Whether it be through data breaches like the $92 million one TikTok had to pay to settle or through scandals like the one between Facebook and Cambridge Analytica, there are numerous examples of the negative implications of platforms collecting user data.

Further reading:

If you’re interested in learning more about things like automated surveillance, surveillance economy, and how much your data is worth, here are some readings you can check out:

Surveillance + Society

Additional Data Value Was Offers To Subscribers – Glo

Glo telecommunications company is offering its customers additional value for every data plan they subscribe.

All this new data volumes are created in order to assist subscribers who now rely on the internet to conduct most of their business, social and religious activities, education and all this plan is because of Covid-19 pandemic lockdown.

Glo company is one of the leading telecommunication…