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"Free" apps explained. (EP.2)

Updated: Oct 9

[Abstract]

Data is any information that “identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.” (California Consumer Privacy Act) That data is collected, stored, then sold by free services to place advertisements in front of their users. This leads to an easy buying experience for customers but may lead to data-leaks and the inability to opt-out.

Sources:

https://ec.europa.eu/info/law/law-topic/data-protection/reform/what-personal-data_en#answer

https://ccpa-info.com/what-is-personal-information-under-the-ccpa/



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[Important Information]

The information in this episode comes from the Official European Commission, California Consumer Privacy Act, and our industry knowledge learned through Fora Social.


We’re going to give you the European definition and the California Law definition. The official European commission states, quote “Personal data is any information that relates to an identified or identifiable living individual. Different pieces of information, which collected together can lead to the identification of a particular person, also constitute as personal data.” end quote.


Examples of personal data are someone’s First and Last name, home address, driver’s license number, phone number, etc. Examples of data not categorized as “personal data”: company registration number, email address, anonymized data.


According to the CCPA (California Consumer Privacy Act) personal information is “any information that “identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”


Typically data is collected through forms such as a sign-up page. This data is then stored in a database. Think of an excel sheet on steroids.


That must be one massive spreadsheet, especially with billions of users. How does my data get sold?


Your data gets used to place ads. For example, we have social media platform A, that you just signed up for. Your data is stored in their database. Company Z comes along and wants to place an advertisement to your demographic. Company Z pays Social media platform A for that ad slot. Social media platform A then uses your data to place that paid advertisement in front of you. Typically your data is then demographically aggregated and shown as results to the purchaser. This process is how many free services make their money. This isn’t a new concept either, radio stations have been doing this for years. Typically with locally placed ads targeted towards a specific audience that may listen to a channel.

Those results from advertisements then allow companies to gauge whether their ad was successful through measures like conversion rates. A conversion rate is a rate in which that displayed ad converts into a click to a website or product page.


Ever feel like when you search for some product on google then you see ads for that product on Instagram seconds later? This entire process can positively impact you. Here’s how. When looking for products to buy this data-to-ad system allows companies to competitively bid for our purchase. This allows you to find the most cost-efficient product.


As great as that sounds, there is also the negative side. Since your data is being collected and stored digitally, it allows individuals with malicious intent to possibly grab hold of that data. While difficult, it happens from time-to-time. Another thing is on most platforms you can’t opt-out of these ads.


Thanks for coming along on our journey! Till next time!

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