Many firms that provide social media and email services to the public at no charge are often funded by advertising and marketing arrangements. In the national accounts, BEA captures the output of these service providers as intermediate consumption of the unit that pays for the advertising. However, the digital economy estimates published by BEA in August 2020 do not include this revenue. BEA currently does not have the data needed to identify what portion of advertising revenue is associated with these websites. Likewise, consumers undoubtedly value these services and would likely be willing to pay for them. BEA does not make any attempt to value the consumer welfare gained by the consumption of these services and therefore, these services are not included in household final consumption expenditures in GDP. For more information see BEA’s Digital Economy Research Papers at https://www.bea.gov/data/special-topics/digital-economy#collapse1-03.
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