Page 36 - ITU Journal - ICT Discoveries - Volume 1, No. 2, December 2018 - Second special issue on Data for Good

ITU JOURNAL: ICT Discoveries, Vol. 1(2), December 2018

relationships [1]. The same holds true for Facebook by December 2017 [19]. The more users Facebook
and the nature of their multi-sided platform. has, the larger the potential reach of the
Facebook initially had a B2B business model that advertisements or Facebook pages that seek to
enabled the interaction of distinctive users on their engage with customers (pre-/after-sale customer
platform. As described in the previous ‘Offering’ service, acquisitions etc.). Moreover, the more users
section, it also became a B2B business model by and their data Facebook has, the more patterns can
opening the platform to advertisers that can be derived to contextualize user demographics.
interact with (potential) customers, increase their Consequently, the advertisers can engage with
brand reach and place their advertisements within users more precisely based on the patterns derived
the social context of the users. It is also a platform from data on age, gender, education and work
for content providers of any kind that could evolve history, likes or groups.
from a user (B2C) to an advertiser (B2B)
relationship. In addition, the platform is also The GDPR’s right to data portability is very likely to
characterized by its B2B business with third-party impact parts of the revenue model of Facebook’s
developers that have to pay for example, fees from DDBM. On the one hand, the regulation should
user transactions in their developed applications on empower users to individually shift their data to
the Facebook platform [19]. competitors (such as Google+) which could
jeopardize Facebook’s ad-based revenues. Indeed,
The GDPR’s right to data portability is very likely to with less data, their algorithms for pattern-
impact Facebook’s B2C business. Users are less recognition in ‘Big Data’ are of less value and
locked-in to the platform as they can theoretically targeted advertisements might deteriorate.
move their data more easily to competitors. The Moreover, the reach of advertisements decreases
B2B business might also be influenced by the with less users which would make the platform less
regulation in an indirect way. The offering from attractive for advertisers and third-party content
Facebook to its business clients deteriorates with providers. On the other hand, Facebook can also
less users in the B2C business. Moreover, increase their user base by being able to import user
Facebook’s ad analytics tools have to provide their data in a structured format of e.g. competitors or
advertising customers with the ability to export even other digital offerings and platforms. For
data and potentially also import data in a structured ‘payments and other fees’ this effect might be more
way. Hence, advertisers on the platform might also indirect. Furthermore, increasing the sovereignty of
gain from the right to data portability because the Facebook’s users over their data might increase
integration of ad-relevant data from other trust in the platform, which potentially increases
platforms to Facebook’s ad analytics tools is the willingness to share personal data and thus the
theoretically facilitated. value of the users for Facebook’s advertising-based
revenue model. However, as a consequence of more
3.5 Revenue model stringent data protection and awareness,
advertisement-based companies such as Facebook
In their DDBM taxonomy, Hartmann et al. [1] define might consider transforming their revenue models.
seven different revenue models (see Fig. 1). Indeed, during the congressional hearing of
Currently, Facebook is provided to the individual Facebook’s Founder and CEO Marc Zuckerberg on
user (B2C) free of charge. The users are paying April 10 , 2018 with regards to the Cambridge
th
indirectly by opting in to data storage and sharing Analytica case, rumors spread that a second ad-free
of their data. subscription-based alternative version of Facebook
might emerge [33].
The key revenue source for Facebook however, are
advertising fees from their B2B business (see [19]). 4. CONCLUSION
In 2017, ‘advertisement revenue’ accounted for
more than 98% of the total revenue This paper attempted to outline the impact of the
($12,779 million), while ‘payments and other fees’ GDPR on DDBM by adapting Hartmann et al’s [1]
hold only a small share of the total revenue taxonomy using as an explorative case study, data
($193 million) such as payment transactions in portability’s impact on Facebook DDBM. Five
Facebook games. Facebook reported a 14%-year- dimensions of Facebook’s DDBM were outlined
to-year increase for both daily active users namely ‘Data sources’, ‘Key activity’, ‘Offering’,
(1.40 bn) as well as monthly active users (2.13 bn) ‘Target customer’ and ‘Revenue model’. Developing

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