Originally published in two parts on April 17, 2018.
Facebook built its power by aggregating users and advertisers — and justified this with the promise of global community. If the latter promise fails, the former business model might follow.
Facebook is not fragile
The Cambridge Analytica scandal has shaken Facebook and many users are abandoning the network with #DeleteFacebook a trace of their departure.
Initial reports showed a loss of market value and falling stocks, but Facebook has already recovered.
Facebook’s market strength is driven by a number of advantages that are not easily defeated or dislodged.
Ads have gotten cheaper to make, publishers have less power over readers, and social media platforms dominate user attention. Advertisers can only address these trends by increasing the quality of ad content, distributing ads more accurately, or producing more of them.
Facebook (as well as Google) enables all three. Despite little hands-on effort from advertisers, Facebook delivers ads alongside a compelling, addictive user experience. These ads are draw from rich user data and remain easy to purchase, implement, and distribute.
While Google couples this technology with search intent, Facebook specializes in display advertising.
Unfortunately for Google (how often can you say that?) there’s more money in display. Businesses expend the vast majorities of their advertising budgets on ads that saturate and interrupt passive experiences with messages that increase the likelihood of consumers choosing the now more familiar brand when shopping.
Facebook combines all the aforementioned technological advantages with a passive user experience that is positioned to match the passive experience of television and subsequently, the advertising money spent on television commercials.
Facebook fuels the advertising dream with a growing collection of users, a group that — due to the effects of aggregation new to this technology epoch — grows with virtually no acquisition cost. Ben Thompson of Stratechery explains:
Facebook is a super-aggregator, which means it leverages its direct relationship with users, zero marginal costs to serve those users, and network effects, to steadily decrease acquisition costs and scale infinitely in a virtuous cycle that gives the company power over both supply (publishers) and advertisers.
Essentially, other than cheap server space, it costs Facebook nothing to extend to new users. Users make the content for free, and draw in more users, who make new content. The more users enter, the more compelled other users are to join, and the more fine-tuned the experience can be to all of them. Facebook leverages its userbase to make a service that’s irresistible to join, hard to leave, easy to participate in, and invaluable to advertisers.
Facebook is powerful, and its growth nigh unstoppable, because it combines sophisticated digital technology and cheap audience acquisition together with the opportunity to capture a massive amount of old money as it shifts to new spaces.
Facebook is the new television. Facebook is the new newspaper. Facebook is the new homepage — the filter and threshold for the Internet.
Connections are never neutral
Facebook has always struggled with its identity and mission. Zuckerberg has long wanted it to be a global community, a central node for all social connections.
But it has monetized this mission in different ways: as a platform — charging developers for access to users and services — and as an advertiser — charging brands for access to and targeting of user attention.
Facebook has floundered between these models as it seeks to fulfill Zuckerberg’s mission. This mission is informed by greed as much as optimistic naïveté. This can be a toxic mix when the business model is dominated by growth instead of clarity or direction. It can simultaneously justify the hoarding of data to monopolize advertising dollars and the giving away of data to attract developers.
Zuckerberg charges Facebook’s mission with an evangelical zeal, convinced that “Progress now requires humanity coming together not just as cities or nations, but also as a global community.” He denounces the local in favor of a global only his platform can actualize. The idea that “Facebook stands for bringing us closer together and building a global community” is less believable with each controversy, each apology tour.
Facebook seems perpetually stumped that sheer connection isn’t enough to bring the world together. Zuckerberg once said that “We’ve been focused on making the world more open and connected… And I always thought that that would be enough to solve a lot of problems by itself.”
This sincerity can be more frightening than simple greed. Zeal is unpredictable. Zeal can inform ends that justify means. When questioned, Zuckerberg amplifies the mission but tries to surrender the leadership, saying that “What I would really like to do is find a way to get our policies set in a way that reflects the values of the community, so I am not the one making those decisions.”
The Facebook “community” cannot be reflected. It is not, as all other communities have been, a group collected around a goal, ideal, or locale. Its scale is too vast and its function too narrow. It’s not oriented toward service or inclusion, but growth.
In his controversial internal memo, released by Buzzfeed, VP Andrew “Boz” Bosworth captured this truth more accurately than Zuckerberg, and Facebook proper, would ever want to admit:
We connect people. Period. That’s why all the work we do in growth is justified. All the questionable contact importing practices. All the subtle language that helps people stay searchable by friends. All of the work we do to bring more communication in. The work we will likely have to do in China some day. All of it… The ugly truth is that we believe in connecting people so deeply that anything that allows us to connect more people more often is *de facto* good.
Bosworth shows that growth is at the root of this connection. Connection isn’t only about family reunions, college trips, and new friends. Just as valid are terrorist cabals, racist militants, and propaganda outlets. Most will likely agree the latter connections aren’t as good ethically but a machine that is designed mainly for connection will always have to work against itself to exclude one and not the other.
This isn’t a surprise to people that need to survive in a world riven by power. For those that suffer at the hands of oppression or marginalization, connection has always been fraught with the possibility of threat.
We might someday remember Facebook as the apotheosis of technology-enabled, tech bro ambition. Facebook effectively wants to deliver a community that is larger and yet more peaceful than any the world has ever seen.
Ethically, Facebook needs a Zuckerberg figure to believe that this all for good; financially, Facebook needs a Bosworth to know the cost and proceed anyway.
Facebook’s broken promise
The main presupposition is that anything can be all things to all people. Facebook believed it could create a space for all and algorithmically shape it to the tastes and needs of every individual and in so doing, create a universal basis for connection and a universal intermediary for interruption.
Facebook’s mission is dependent on this community, but the growth of its business model is dependent on the resultant possibility of a universal, neutral, objective network. There’s a significant difference between targeting (effectively) all 30–40 year old white women in the New England region that are looking to purchase a house and only targeting some of them. It’s the difference that has made Facebook the most profitable social network ever. It’s the difference between Facebook as a central hub and Facebook as a social network among many.
Facebook’s fall won’t be its total collapse but will be the hollowing of this promise. The heart of the service is gone if users and advertisers can’t trust that everyone else is present and approaching it in the same basic way. The global community image promised a relatively safe space for the sharing of personal information, a space that could accommodate friends, publishers, and brands in equal order.
The connections between could not be forged tabula rasa, but were instead forged from the power asymmetries that existed before and then through Facebook. That space was not connected by a global community, but by a global data business.
"Community" is such an amazing euphemism for "database."
“Community” is a delusion that Facebook wants to believe. The safety of its business model is embedded in that faith. The experience that built it, and the senses of privacy and autonomy that insulated that experience, made Facebook one of the most powerful companies in the world. Its exponential stature relied not only on what it offered, but what it promised to offer — not a difference of degrees or number of users, but an absolute difference, a universal connection.
Facebook promised the world and it’s now teaching the industry that the world is impossible to give.
The chimerical language of privacy
When Zuckerberg says “We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” he’s also, implicitly, referring to his shareholders. If Facebook is an advertising intermediary — which has now proven to be its most profitable path — it has a fiduciary duty to protect the data it monetizes. If Facebook gives it away, as it did when it acted as a platform, it’s essentially giving away its core value, its secret sauce — the basis of its business.
Remember, Facebook doesn’t really sell data. It trades a communal experience for user data and improves that experience with said data, creating a valuable territory for ads both because they are targeted on the behalf of advertisers that want to snipe their audiences and on behalf of consumers who (supposedly) prefer relevant ads.
All users, in theory, want their data protected, but we need to ask: what exactly do we want protection from?
When Facebook says it’s renewing efforts to protect data, that doesn’t mean it’s committed to privacy. Quite the opposite. It’s still, as its business model demands, going to act as the intermediary between you and advertisers, as a broker between salesmen and wallets.
When does the conversation shift from knowledge of users to analytics, pattern, and prediction?
To limit data to an issue of privacy is to underestimate it. There is as much data about you as data from you.
“Big data” isn’t merely about the mass collection of data. It involves the use of algorithms and machine learning to discern emergent patterns and inferences from that data. The violation here isn’t only that Facebook might know about something you don’t want them to know about. It’s that Facebook might know something about you that you don’t know.
A ProPublica report showed that Facebook has about 29,000 different criteria for each user. And despite Zuckerberg’s sleight of hand, referring exclusively to voluntarily shared data in questioning, much of it is gathered involuntarily.
Facebook tracks you outside its feed through Facebook Pixel — embeddable code that tracks actions taken on other sites after clicking an ad; like buttons on external pages — indicators that report metadata back to Facebook; and offline conversions — ad tools that link external sales back to Facebook ads.
What right do we have to our own data? What right do we have to data on us produced by our behavior on someone else’s network? What right do we have to data that is produced from patterns and inferences among multitudes of people?
Facebook wants to frame this as a personal privacy issue that they can immediately lock down. They signal as such when they frame it as a “breach of trust” (repeated in Zuckerberg’s first post responding to the Cambridge Analytica scandal, Sheryl Sandberg’s, and their full page ad). They want this to be a growing pain we can forget about.
They want us to be on their side and see Cambridge Analytica as the violators. If so, we can tighten up the defenses together and trust that these incidents will get rarer. They need their “community” to stand together.
If we join together as a community, Facebook can even leverage government regulation to entrench it against competitors. Facebook knows its power and growth result from user experience, so in when tragedy occurs, it wants, at the very least, for its users to stand together. That unity, experienced against an external foe, will be the best way to retain users and sustain growth.
But it’s not a community. It — we — are a resource. Even people outside are simply on the edge of the tidal swirls of Facebook’s network effects. We’re little more than data and our privacy only matters insofar as our belief in it, and the community surrounding it, keeps us posting.
Bullishness on Facebook relies on them soaking up brand advertising dollars for a massive, passive audience. This rests on the implicit promise of a global community that can create a user experience that serves everyone universally and peacefully. Facebook needs everyone to keep coming back. It knows that a network built on exponential, user-driven growth can collapse from similarly exponential departure.
If people’s behavior on the app shifts, the less trust advertisers can have in that engagement. The more Facebook becomes a detour rather than a home, the less brand advertising will be seen and absorbed. The more Facebook’s business model pushes it to damage its relationship with users — through privacy violations, bad information, or unhealthy media consumption — the more likely users might flee and Facebook’s model unravels.
Facebook’s profit incentive is getting closer to depending on the privation of what first made it successful: user experience.
Facebook’s crisis of autonomy: user experience built Facebook, and it can destroy it too
The audience that built Facebook wants autonomy and new business models are rising to address those users — and signal a coming disruption.
User experience is the fulcrum of success and failure
Many want Facebook to fail, and users to abandon it, due to privacy violation on principle. But users have so far proven malleable to this surveillance, normalized as it is by unaccountable, routine intrusion and vulnerability from institutions like the NSA and Equifax.
Detractors need to remember that Facebook rapidly built a multibillion dollar business on a user experience that offered real value and compelling incentives to retrieve that value. Its aggregation model depended on users drawing in other users, on this accumulation making the product both better and cheaper to grow.
As much as some might wish for ethics to shatter usage, it’s more likely, in my estimation, that Facebook will exit the same way it entered: through the experience of value and habits.
Pundits pointing to rebounding stocks and steady downloads as proof that Facebook is safe miss the undercurrent. User habit drives modern technology and even though there isn’t a similar app to catch disaffected Facebook users — as Lyft did to Uber — it remains to be seen whether user habits will shift.
Most will keep the Facebook app, but will there be a flash of doubt the next time a website asks them to log on with Facebook? Or when they think about sharing that photo or update? Beyond privacy, how will users feel the next time they come across an inflammatory story or meme? Will their fingers pause over the share button? And perhaps even before they click the app — at work, in the restroom, between TV shows, in line — will they wonder, is this really good for me? Is this how I should spend my time?
Ideally, the algorithmic sleight of hand always produces, with little user deliberation, exactly what the user wants. But increasingly, users are beginning to feel this is more trick than magic. Perhaps they will no longer want to be audience to this show.
Financial post reports on a survey that suggests, as accurately as an online survey can, that 73% of (Canadian) Facebook users say they will change the way they use Facebook and 10% plan to leave the service. In another survey, Facebook’s general favorability has fallen from 61% in October to 48%. Only 7% express a clear degree of trust in Facebook with their personal data.
Further, research continues to prove the mental health and mood damage that users note intuitively. Facebook is negatively associated with well-being, encourages social comparison and depression, and leads to negative mood from wasted time even when users predict the opposite before they start using it.
It doesn’t look good. Even Facebook agrees.
Beyond the individual level, 33% of respondents to another survey from Australia, Canada, and the U.K. said that Facebook is having a “negative impact on society.” 32% of Americans — 54 million people — agreed. As Recode points out in its reporting, this positions Facebook as “less of a societal ill than Marlboro cigarettes but worse than McDonald’s fast food.”
Cambridge Analytica points to much worse problems and the steady flow of headlines point to even more. Casey Newton summarized the crises:
Facebook sits in the center of three related but distinct crises. There’s the data privacy scandal, crystalized by the Cambridge Analytica revelations. There’s the information integrity crisis, playing out daily in the News Feed. And there’s the broader cultural reckoning over how we spend our time on social media and whether its long-term effects are ultimately harmful, both personally and societally.
You can imagine a little PR, a little time, and a lot of exhaustion burying individual concerns under more pressing problems. Together, these crises threaten to unravel the experience that built Facebook through a counter experience: autonomy, and its loss.
Doubt corrodes habit
Facebook relies on passivity and built on trust that users can suspend their autonomy for the sake of a feed that will serve them.
Facebook has long counted on the cyclical power of engagement and passivity where actions — reactions, shares, posts, views — produce data that can support an ever more engaging feed to be passively trusted and swiped through. Too much need for action and the app becomes a chore; too much passivity and the app becomes boring.
This cycle of engagement starts to fly apart if users interrupt their engagement with doubt. You don’t need to be an expert on these issues to pick up on the ambient anxiety that might remain even after the headlines depart.
Users need to believe that they’re ultimately autonomous, that whatever suspension they give can be retracted. There’s a huge difference between a controlled suspension of control — “show me what’s best, Facebook” — and a sense of being out of control — no privacy, all distraction, all addiction.
Despite the #DeleteFacebook hashtag, this corrosion won’t become visible through voided accounts. Just as continuous usage can create habits and habits can compel continuous usage, their rupture can lead to complete retreat. Usage can collapse if habits are defrayed, delayed, and fragmented even marginally.
The less often you open Facebook upon waking up or getting into line, the more deliberate the decision needs to be, and the more pressure Facebook needs to surmount to inspire usage — all of which might be complemented by an ambient anxiety over a lack of autonomy and its unaccountable, unforeseeable consequences.
The center cannot hold
Antagonism and loss of autonomy now characterize online life.
Will your post cause a swarm of trolls and threats? Is this a mistake that will go viral? Will you live to regret this when you apply for a job?
Contributions to the public discourse are always under threat and known spaces ready to be punctured by the unknown. Contrary to Zuckerberg’s notions, communities online are always vulnerable to attack because networks didn’t account for power. Power flows even more invisibly and capably through digital channels and users are ever more rightfully wary to post public information. Mobs of strangers can now exploit your publicness as effectively as any single authority figure.
Is what you’re seeing trustworthy? Is it good for you?
False nostalgia hides a past of similarly false news, but the scale of distribution combined with the intimacy of sharing and reaction creates a uniquely vulnerable situation. Filter bubbles can seal people into unhealthy behaviors and circular beliefs, typified by nominal engagement, yes, but also mounting anxiety and a sense of control lost outside one’s immediate social surroundings. When you mix this together with the idea that “screen time” or social media time is itself damaging to attention, focus, or mental well-being, then you have ever more reason to regain control by putting the device down or disabling the account.
Is this content targeted at you? Are you being manipulated?
No, Facebook doesn’t commandeer your microphone. But many people can’t drop the belief that it does. And that’s even scarier. Ads are shifting from feeling relevant to feeling creepy. Now politics is following. There is no autonomy on a network that, from ads to content, makes users feel hunted.
Facebook promised a globally connected community, but could only deliver on the connections, willfully unaware that channels incentivized for superficial engagement, mass targeting, and addictive experiences would produce a loss of autonomy, not as a byproduct, but by design.
And if Zuckerberg’s belief in connecting the world for its betterment has served as a check on its rapacious growth — and that’s a big “if” — where will Facebook go once Zuckerberg starts to doubt this promise too?
The apology tour might not be over. If users reassert control and start to leave, if the model shakes and the promise breaks, an already ethics-averse company might need to maintain its growth trajectory through less polite means.
It seems short-sighted, petty even, to consider any one of these issues to be enough to fell a multibillion dollar company. But Facebook is borne on a wider Internet trend toward control and away from autonomy, toward surveillance and away from community. Facebook might end up being the leader of a trend that new forms of media and technology disrupt.
It’s only a matter of time until users learn best how to seize the power technology enables and demand the respect of their autonomy. Like other disruptions, new paradigms will hew closer to user needs and experience.
I can’t predict Facebook’s downfall, but the deeper undercurrents of the Internet point toward user experience, choice, and demand — and new industries are rising to capture these movements in renewed ways.
The future of media is participatory
The Internet shifted power from supply and distribution to demand and experience. Economies are being rebuilt around the attention and needs of users.
On one side, we have a proliferation of content unleashed by digital technology and on the other, organic monopolies that would have been unimaginable in the days of Standard Oil. People are demanding access to everything and simple, clean interfaces with which they can access it all.
Generations are learning how to have unprecedented control over their content consumption. People are willing to drop things like Facebook because they know it relies on intrusion. As more people are raised to have this power, more will demand it, and more companies will suffer for relying on interruption-based advertising.
Algorithms and ad blockers, as well averted eyes and muted speakers, are making it ever more unlikely that ads will even be seen, no matter how well targeted.
YouTube is proving itself a tool for radicalism and Google a pusher of misleading stories. Facebook has become home to fake news, propaganda, and live-streamed crime. What happens when advertisers can’t trust social networks to place remaining ad visibility alongside safe content? What happens when users feel hunted by ads, rather than served?
The risk/reward changes drastically if and when these social networks fail to house everyone. If the winds turn against Facebook, they’ll join with winds against ads in general.
Companies need to ask themselves if they should tie their fates to this apparently volatile company. Facebook will survive but brands can only ever be sharecroppers on Facebook’s land.
Facebook exploited its way to leadership and will solidify that spot until the core rots from within them. Tepid regulation, the most likely kind, will likely entrench it.
Facebook will remain a powerful company, but it relies on new technology funneling old money through old structures. The model might be new but the assumptions about user needs are old. Facebook is the mass advertising industry’s last chance at dominance.
What might die is the promise of global community that doubly aggregates all users and all advertisers, a promise of a universal market — audiences without trajectories, passive entities that will fall for tailor made interruptions. What might fail is the promise that old assumptions can be successfully dressed in new technology.
Facebook already sees its network becoming too public, too exposed; users share vetted content, but post less and less personal information. For that, they move to other networks. Facebook might become connective tissue more than it is a network, which could even signal potential for nationalization.
Facebook might even remain the biggest distribution channel of them all but the promise it propped up, that devil’s deal between old money and new distribution, will remain broken. The burden of connecting to audiences in this still unfamiliar, always shifting, newly horizontal digital environment cannot merely be shifted to a singular mastermind.
Industries are already growing to address this future.
Content marketing — the practice of driving audience acquisition and retention with valuable content — and inbound marketing — the philosophy of drawing audiences in with value rather than pushing ads out, are the most mature of these industries.
These already successful toolsets are exploring a frontier that centers user autonomy. They are proving that you can sell wildly successful products and services without the intrusion of advertising. Instead, you can draw users in with fair, transparent relationships. This builds markets that exist beyond sales and audiences that can inform new products, loyal advocacy, and diverse monetization.
Joe Pulizzi and Robert Rose, co-founders of Content Marketing Institute, argue in their book Killing Marketing that marketers should focus on “data that is given, rather than gathered.” According to them, programmatic, targeted advertising is self-defeating and “inherently limited.” The hunter/hunted dynamic of surveillance advertising orients only to the diminishing returns of converting interest into purchases. Content marketing that is built to serve users along trajectories that lie far beyond the buyer’s journey are ready to capture users seeking autonomy and generate loyal audiences that can’t be swayed by mere ads.
Subscription industries, with stalwarts like the New York Times and Washington Post, as well as small newcomers like Stratechery or big ones like Netflix, are another instance. Subscriptions are old, but the Internet is transforming subscription from payment method to relationship alignment. With subscriptions, content producers and services no longer need to be twisted between advertisers and users. Instead, the demand that digital distribution unleashes allow users to find and support differentiated products that continuously serve specific needs. With differentiated content, identifiable brands, and global distribution, the producers can transform the most niche of hobbies into sustainable businesses. Entire companies can replicate the same model and grow at ever greater scales.
On the edge, many more companies expand with new models and relationships. Mighty Networks generates niche social networks; Civil uses the blockchain to create spaces for independent journalism; platform cooperativism offers a movement for fair, democratic social platforms.
Users will become more autonomous. More spaces and platforms will develop that respect that autonomy and leverage it into cooperative, collective creativity. Brands and companies will build content that attracts rather than ads that interrupt.
The Internet needn’t be built on a Faustian bargain between free content and exposed data. Our relationship to technology needn’t be built on the assumed anxiety that the powerful will wield it to betray us.
The most unconscious of user habits to the most innovative edge thinkers point to a future that is better than the one Facebook offers. To counteract Facebook’s abuse of power, we need not only to demand regulation and protection, but the creation of this future.