As big tech companies, such as Google (GOOG), Microsoft (MSFT), Meta (META), and Amazon (AMZN), prepare to release their latest round of earnings, questions surrounding ‘metadata’ and what companies are doing with the information that they get from you - the consumer - keeps coming to the forefront. But what does it really mean and why is it important to social media companies?

Metadata is information that describes and explains data. In layman’s terms, let’s say you post a picture, that picture, even when you've taken it, already has the location that that picture was taken, the date that it was taken, and the type of camera that you were probably using. Those three things are essentially called metadata.

Yahoo Finance’s Brad Smith explains when metadata actually comes into play for social media companies and what they do with your data.

Video Transcript

- Siri, what is metadata?

BRAD SMITH: So you want to know about metadata? Of course you do. It's come up in a lot of conversations, especially around some of the social media hearings that have taken place on Capitol Hill.

So what is metadata? Metadata is essentially the data about data. And to break that down even further, say you post a picture. That picture, even when you've taken it, already has the location that that picture was taken at, the date that it was taken, the type of camera that you were probably using. Those three things and more amass the metadata.

But here's where it comes into play for some of the social media companies, is because when you post that image, you are essentially giving that metadata over to the social media companies. And you're allowing them to then catalog some of that metadata and create an advertising profile on you that they can then index and be able to resell to other advertisers. So for social media companies, that metadata is incredibly important.

There's some data that you volunteer when you sign up for a profile. But there's other data that you're giving them, not even knowing it. And that is how you get advertised to on such a granular level and why some of those ads are so relevant. I missed the cup.

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