By Prameen Lakshmanan on JUNE 12, 2026
Image by Philip Oroni on Unsplash
Have you ever heard the saying “There’s no such thing as a free lunch?” In today’s world, this holds especially true. What is marketed as free isn’t always exactly free. Although there might be no cost, platforms that offer free digital services still make money— just not directly from us.
Let’s take, for example, Google. Google is a search engine that dominates 95% of the search market, leaving other engines like Bing behind. Not only is Google a free search engine, but it also offers a suite of essential tools such as Google Docs, Slides, Sheets, and Gmail. All you need is a Google Account to access all of these tools: no credit card or subscription.
However, when you create a Google account, the company collects extensive personal data, including location, IP Address, and other information. It then uses that data to target paid ads based on your search behavior and data. In short, targeted ads are personalized to specific consumers based on their interests, browsing behavior, demographics, and location. Targeted ads frequently appear in social media feeds, search engine results, and video ads. Google’s profit model involves gathering your personal information to build user profiles and ensure that advertisers, their actual customers, can target ads effectively, even though you aren’t necessarily the one clicking them. In their eyes, you are their product.
This same model is also applicable to video platforms such as YouTube. YouTube makes money through ads that play before or during videos. YouTube tracks your watch history to give you targeted ads and keep you on the platform longer. Other social media platforms, such as Instagram and TikTok, employ this process.
In the end, all platforms follow the same principle: If it’s free to use, you are paying with your time and data.
How about digital services like Canva or even ChatGPT? If we use their free model, that’s free, right? Yes, that’s right, but temporarily. These digital platforms have something called freemium models. This business strategy offers basic services for free while charging a premium fee for advanced features, functionality, or to create an ad-free experience. For example, Canva is free to use, but premium templates, tools like background remover, and brandkits are locked behind a paywall, which means you have to upgrade your plan to access these features.
On the other hand, LLMs like ChatGPT (great for brainstorming, coding, explaining concepts) have limited premium “tokens” (basic units of text/data used to process and generate language) before they run out, and use the free version, which has a slower performance rating. As you increase your dependency on the free version, your brain starts to crave the premium experience, urging you to upgrade to the premium plan. As long as at least 100 people out of 1000 people upgrade their plan, these platforms will remain profitable.
At the end of the day, whether it is Google quietly collecting your data, YouTube giving you ads and collecting your search history, or ChatGPT urging you to switch to a paid plan, none of these services are truly free. That doesn’t mean these platforms are evil or anything; honestly, they have made our lives much easier and more fun while keeping us connected. But it is worth being aware of what is happening behind the scenes when we open an app or a website without paying for it.
These companies build something valuable, and they need funding for it. So next time you search on YouTube for fun or click on a “free” website, you should be thinking: What am I exchanging to access this service?
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