Get All Access for $5/mo

4 Ways to Reinvent the Facebook/Google Data Model in the Wake of Cambridge Analytica The traditional model of collecting user data is hurting us all. Let's change it, with blockchain.

By Andrew Medal

Opinions expressed by Entrepreneur contributors are their own.

Bill Clark | Getty Images

The Cambridge Analytica scandal, as CNBC reported, marked an important tipping point in how many of us view tech giants like Facebook and Google.

Related: How to Tell if Cambridge Analytica Scraped Your Facebook Data

To briefly recap what happened: Facebook allowed a third party (the British political consulting firm Cambridge Analytica) to access huge amounts of Facebook user data and use it for political ends. This data contained details about the identities of millions of Facebook users and was shared without their direct knowledge.

A massive controversy ensued and is still in full swing. Just this week, Mark Zuckerberg tried to address the European Parliament's concerns. This and other recent events have confirmed what many of us have known for some time: Our data is not safe with the Facebooks and Googles of the world and is used without our knowledge.

Since the Cambridge Analytica scandal broke, widespread protests and furious debate have surrounded the issue of how our personal data ought to be handled. The ethics of the tech juggernauts are being questioned as never before.

As the case against Facebook unfolds and as that conversation dominates the spotlight, the flaws with the Facebook/Google model (where big companies control our data and do with it as they please) are becoming more apparent every day. It's a system based on profiting from user data, and it pretty much benefits no one aside from the platforms themselves.

Let's take a look at the problems the model shows.

Related: Read Mark Zuckerberg's Full Statement on Facebook's Data Scandal

A seriously flawed system

The problems boil down to the fact that users of these companies' services don't own their data. It's the property of the platforms themselves, and that means it just isn't safe.

While Facebook repeatedly insists that it doesn't directly sell users' data to advertising companies, this is an incomplete answer. In reality, both Facebook and Google work closely with ad companies, using users' data to help them -- the tech companies -- bolster their efforts to target their own ads at the users most likely to respond well.

Worse, the Cambridge Analytica scandal is proof that this data isn't safe with these tech companies. It can (and does) easily fall into the hands of people we know very little about, who may then use it in ways we may not agree with.

But the issues run deeper than privacy.

The data-model benefits users and advertisers in theory because users get to see ads for things they like, and ad companies get higher responses and ultimately more money.

Unfortunately, things aren't quite that straightforward. Often, data is inaccurately used, leading to ad companies targeting the wrong users and losing money. So a data aggregator might say it didn't sell the data -- that it simply got leaked or wass "harvested" by other companies (as Zuckerberg testified in the Cambridge Analytica case).

But, whatever its genesis, the data gets out there; advertisers grab it, and he users themselves are forced to look at hordes of ads for things they couldn't care less about.

Another group losing out? Content creators.They're vital to the process because the videos, groups and posts they share are what attracts traffic to the platforms and make advertising possible.

But they're often seriously underpaid, despite their crucial role in Facebook and Google's business model.

It seems, then, that the only real beneficiaries are the tech companies. And these parties certainly do benefit — with enormous profits and ad revenues, as Statista reported in this article.

These are the reasons we need a new system. And the good news is there could be one just around the corner.

A new model, with four points

There's been one good thing about the Cambridge Analytica controversy: It's sparked a strong desire for new ways of doing things in the online advertising space. The result has been calls for a better way of handling data.

Blockchain technology is one method being considered. It's decentralized by nature, so it offers a refreshing alternative to the heavy centralization of Facebook and Google. Projects like Kind Ads and Basic Attention Token are making serious headway in the war against protecting user data. These platforms,both blockchain based, are competing directly against tech giants like Facebook and Google.

Here are four suggested points to reinvent the old model:

1. Decentralization

In a decentralized, blockchain-based system, advertisers will be able to work directly with users and content-creators instead of doing everything via a powerful middle man. This will benefit everyone involved.

Users will regain control of their data and be able to sell it directly to advertisers in return for payment via cryptocurrency. This way, they will be able to decide who can access and use their personal information, and specify what ads they'll be happy to see.

2. No identity

Because blockchain promises to be highly secure and preserve anonymity, users won't need to worry about a user's identity being shared or made public.

"Traditional businesses are for profit, and they are built with the intention of the company doing whatever is in their best interest," Neil Patel, a board member with Kind Ads explained to me. (Kind Ads is an advertising platform that serves user-friendly ads without taking any middleman fees.) "With blockchain," Patel said, "not only is your data distributed, but many of these foundations have a mission that is focused on the user and don't ever plan on making a dollar. In essence, they are putting the user first.

"Users are empowered, and they are given options in which they can sell their data in exchange for compensation," Patel added. "In this new model, the power is flipped, where the user/consumer is in control versus the business."

3. New ad networks

Decentralized ad networks will be able to put the focus on the user, letting users see the ads they want to see. Advertisers won't have the ability to misuse people's personal information, and publishers will control what is shown on their websites.

Advertisers will benefit too, because they will target ads much more accurately, to people they are certain will want to see them. They'll be able to shift from impersonal, annoying ad styles (like banner ads) and embrace more pleasant and effective methods, like push notifications and chatbots.

4. No middle man

Finally, content creators will be able to negotiate with advertisers themselves and keep all the revenue. They'll be able to charge their own rates and earn more money than they would by relying on Facebook and Google. This will free them up to devote more time to creating the content their followers love.

That will be a step toward a much fairer way of advertising; and when users view it, they'll rest easy, knowing their data is much safer.

Related: What the Facebook-Cambridge Analytica Data Leak Teaches us About Ethics And Privacy

Overall, in the wake of events like the Cambridge Analytica scandal and the Equifax breach, people are rapidly losing faith in the ability of big tech companies to protect their data; and blockchain could well be the way we advance. Obviously, I'm an advocate of the blockchain revolution. I believe that disrupting big tech is the only way forward.

Andrew Medal

Entrepreneur & Angel Investor

Andrew Medal is the founder of The Paper Chase, which is a bi-weekly newsletter. He is an entrepreneur and angel investor.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Is the AI Industry Consolidating? Hugging Face CEO Says More AI Entrepreneurs Are Looking to Be Acquired

Clément Delangue, the CEO of Hugging Face, a $4.5 billion startup, says he gets at least 10 acquisition requests a week and it's "increased quite a lot."

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Business News

Sony Pictures Entertainment Purchases Struggling, Cult-Favorite Movie Theater Chain

Alamo Drafthouse originally emerged from bankruptcy in June 2021.