If you’re not paying, you’re the product

Businesses exist to make money. Software businesses make software that makes money, and given the limited number of revenue-generating business models there are, if it isn’t the users that are giving money to the business then it’s probably advertisers.

Thanks to Timothy Taylor, we can look back at the history of the phrase and the sentiment to 2010 when ‘If you are not paying for it, you’re not the customer; you’re the product being sold’ was posted on Metafilter, and further back to a 1973 video which made the same point about television.

So, what about charities? Does the same market-driven logic apply? Are the beneficiaries of charity’s services the product that gets ‘sold’ to funders who give the charity money to run the services? It might seem an uncomfortable idea, but the logic is the same as for social media sites or television channels getting money from advertisers. Somebody has to pay, and if it isn’t those receiving the service then it has to be funders and donors.

The difference, if there is one, might be in the nature of the relationship between the beneficiaries and the funder. For businesses paying for adverts on websites, the expectation is that they will be able to form a direct commercial relationship with the user of the site and turn them into a customer who gives them money. This isn’t the case with a funder and the beneficiaries of the charity work as the funder isn’t trying to form that direct relationship. They do however, get something in return. They get to demonstrate the positive impact of their funding choices, so there is a kind of value exchange from beneficiary to funder.