Ask HN: Why is Facebook's data worth that much? How is it used?

(Check out the pricing on Adwords for serious medical conditions some time.)

I suspect there are two factors at play. One might be a chinese wall between search/ads and purchasing. There might be regulatory restrictions about using purchasing data, so they legally can't use it. And in the absence of precognition about anything else you want, ads for something you were looking for recently probably perform pretty well for re-capturing those drop-offs vs. the alternative (random goods?).

The other one (and this is less about Amazon) is that the algorithms aren't driven by machines, it's by people. Generally the computer looks at all the ads, calculates the likelihood that you'll click on each one, and multiplies that by the price of that ad to get expected value. Then it just shows you the top n sorted by expected value decreasing. Some of that calculation depends on user behavior (like lowering the percentage the more often you see the ad), but a lot of it depends on what advertisers are willing to pay. And those people are human. They're guessing what you are likely to search for when you need their services or reading articles about their topics. And they have shockingly little control over how to target users.

Whenever I hear someone say "Google is selling your information" I urge them to set up an AdWords account and try to buy some information. I have one set up for my own name (useful when interviewing to help guide people to me instead of similarly named people, and to exert influence over the content associated with me). I have my CPC set to $0.05 with a max of $1/day and no funding unless I want it to start showing up. It was highly educational.

The supermarket I shopped at got rid of its longstanding loyalty card, a couple of years ago. They still have some coupon thing I refuse to use, and a card for a gas price break, that I also don't use.

As far as I know, credit card companies are not prohibited from sharing/selling your detailed history. Not in the U.S., at least.

I have speculated that the supermarket got rid of its loyalty card in part because, with so many people shopping with credit/debit cards these days, they could still identify most customers by the card they paid with.

It might then in turn be possible that they sold my activity to whatever ad network and/or Facebook.

But, I'm betting on the bank.

Regardless, I've never before received an ad for drain cleaner on FB. And this is not the only case where FB ads have followed shortly upon some unique experience that those ads then in turn related to.