Do you use Facebook, Gmail, Google, YouTube, Twitter, Instagram, Dropbox, Houzz or any of the other free (or very cheap) online services? Many of the services listed here are fantastic and game changing – and very popular.
Have you ever stopped to think about how these are available for free? The money that it costs to maintain even a simple online service is immense. It requires dedicated data centers around the world and a team of lawyers, marketers and engineers just to keep these services up and running. How do these companies do this while mostly giving these products and services away?
Here’s how they do it: The product is you, not the service.
In the kitchen and bath industry, the transactions we have with products and services are pretty clear. We pay a bookkeeper to do our books and that’s exactly what they do. We hire contractors to install floors and cabinetry. We even pay for internet service. All of these transactions are easy to understand. With our consumers, it’s the same way. They’re paying for that new kitchen along with your expert advice and guidance. Both are quantified in easy to understand contracts.
Did you know you’re paying to use Facebook? How about YouTube? I know what you’re thinking: “I haven’t paid a dollar for any of that stuff.” But you have been paying, just with your personal data and not money.
On a high level, here’s how it works: You use Google and Gmail. You’ve got all of your messages in there, and all of your Google searches. Every time you use Google Maps, they know where you are. Google aggregates all of that data and uses it to sell ads. Ever shopped for something on the internet, even for a few minutes, and then all of a sudden, everywhere you look, you see ads for that thing you just looked for? This is how Google makes money. They mine your data so they can sell super-targeted ads.
Make no mistake: Google isn’t a search company, it isn’t an email company – it’s an advertising network. The same goes for Facebook and the rest of these services. They’re using you for your data so they can sell it off.
I don’t think this is necessarily a bad thing. I certainly don’t mind getting an ad for shoes if in return I get the incredible utility that a lot of these services provide me. This model isn’t new, either; we’ve all grown up listening to the radio in the car. That’s all ad supported.
But just as we’re careful with our money, we should be careful with other ways we pay for things these days. We need to be careful about how we share our data with companies. To do that, we need to be educated in how these services work.
Houzz is an incredible service that allows designers to upload their digital portfolios. Houzz does a good job at getting consumers to its site to look at those portfolios. In many cases, designers get leads and eventually jobs by having their portfolios up on Houzz. In most cases, designers are using Houzz for free. Sounds pretty great, right?
Well, Houzz has to make money somehow. The company is valued in the billions and didn’t get there by giving stuff away. It charges for advertising much in the same way that Google does. So you’re not paying Houzz in money, you’re paying in data.
To get some insight into what data you’re paying, it’s worth it to look at the “Terms of Service.” Yes, these are those long, hard-to-read legal documents that nearly all of us just click past. Here’s part B of Houzz’s terms of service:
You hereby grant to us and our affiliates, licensees and sublicensees, without compensation to you or others, a non-exclusive, perpetual, irrevocable, royalty-free, fully paid-up, worldwide license (including the right to sublicense through multiple tiers) to use, reproduce, process, adapt, publicly perform, publicly display, modify, prepare derivative works, publish, transmit and distribute Your Content, or any portion thereof, throughout the world in any format, media or distribution method (whether now known or hereafter created) for the duration of any copyright or other rights in Your Content. Such permission will be perpetual and may not be revoked for any reason, to the maximum extent permitted by law. Further, to the extent permitted under applicable law, you waive and release and covenant not to assert any moral rights that you may have in Your Content. If you identify yourself by name or provide a picture or audio or video recording of yourself, you further authorize us and our affiliates, licensees and sublicensees, without compensation to you or others, to reproduce, print, publish and disseminate in any format or media (whether now known or hereafter created) your name, voice and likeness throughout the world, and such permission will be perpetual and cannot be revoked for any reason, except as required by the applicable law. You further agree that we may use Your Content in any manner that we deem appropriate or necessary.
Now I’m no lawyer, but this one section tells me that if I give Houzz any content, it pretty much can do whatever it wants with it without asking me or paying me. In another section, it’s even gone so far as to protect the firm if someone shares something that is copyrighted by putting the liability on the submitter of the content. Yes, that means that Houzz can share copyrighted works and essentially put the blame on the uploader of said content.
While this agreement may sound very draconian, let’s think through the scenario: Houzz could take all of your content and do all kinds of things that would seem nefarious to a user that uploaded it. But why would it do something so bad that it would upset its user base? There’s a certain tension between users of these services and the companies that offer the services. Users want the most rights, companies want the most money, and the compromise is somewhere in the middle.
In the traveling seminar that I do for KBDN, I talk about this type of terms of service and ask participants if they are aware of the rights they are giving up on services like Houzz, YouTube, Facebook, etc. Most are not aware at all of the huge amount of data they’re giving up (along with their rights to that data).
I’ve also been following a group of interior designers over the past several months in a popular Facebook group that has been very vocally opposed to what Houzz is doing with their content. They even started a petition to stop Houzz from “misrepresenting” and “misleading” them. I get where they’re coming from, too. Many of these users uploaded their photos to Houzz, only to find out that their photos are being used to sell product, are featured in blog posts and are used in other advertising that they weren’t aware of. We all work really hard to create the designs we want and it seems totally unfair that Houzz would do this. I get it. The crux of their argument is Houzz didn’t tell them what they were doing.
Sure, Houzz’s slogan isn’t, “We’re going to use all of your stuff to sell against and make money from it.” But if you read the Terms of Service, this is all spelled out. Houzz has given itself such broad rights that you need to imagine the worst and hope for the best. To those who are upset by this after that fact, I am truly sorry for you, but this certainly is a case of “buyer beware.” Remember, you did agree to the terms.
In a few cases, designers who feel jilted by what Houzz has done with their content have reached out to them and had situations corrected. Let’s not forget that Houzz is in the business of keeping designers happy, too.
Before you think that I’m telling you that we all have no choice to agree with terms of services, you should be aware that there is change happening. In fact, just a few months ago, Facebook was brought in front of Congress and questioned heavily for misusing and misrepresenting how it handles users’ data. In Europe, GDPR just went into effect, which gives people some rights over their data and puts limitations on what can be done with it.
Here’s what I want you all to take away from this: Your data is incredibly valuable and you should treat it as such. I believe that educating yourself on what you’re giving up in return for an online service is very important. I make the choice every day to give up data. In most cases, I’m very happy with the return I get from that transaction.
If you’re thinking of using an online service such as Houzz, Twitter or any of the other ones, I implore you to read and understand your rights. Educating yourself can help you make an informed transaction and, if you think something isn’t fair, that knowledge will help you speak up. Remember, while you may be the product, these services don’t exist without users like you. ▪