The Economics of Free
Advertising-Funded Free Services
Search engines, social media and news apps offer free access because advertisers pay to reach users.
You are the product.
Two-sided market
The platform serves users on one side and advertisers on the other.
Attention
More time on the platform means more advertising revenue.
Data
User data helps target ads more precisely.
Concerns
Privacy, addiction and misinformation can follow from attention-driven design.
A targeted ad
A user searching for running shoes sees shoe ads on other sites.
Assuming advertising-funded services are neutral
Business models shape design.
Key takeaways
- Advertisers fund free services.
- Platforms serve two sides.
- Data enables targeting.
- Design can encourage overuse.
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