Derek Muller has an interesting analysis of the different business models of Facebook, YouTube, and other social media sites:
Published on 14 Jan 2014
Share this on Facebook 😉
Facebook is a complex ecosystem of individuals, creators, brands and advertisers, but I don’t think it serves any of these groups particularly well because its top priority is to make money. Now, I don’t think making money is a bad thing, in fact I hope to make some myself. The problem is the only way Facebook has found to make money is by treating all entities on the site as advertisers and charging them to share their content.
This business plan backfires because 1) not all entities ARE advertisers and 2) it was the content from these people, specifically friends, family, and creators that made the site worth visiting in the first place. Now the incentives are misaligned:
– individuals want to see great content, but they are now seeing more paid content and organically shared content which appeals to the lowest common denominator (babies, weddings, and banal memes)
– creators want to reach fans but their posts are being throttled to force them to pay to be seen
– brands and advertisers have to pay once to advertise their page on Facebook, and then pay again to reach the people who have already liked their page. Plus Facebook is not a place where people generally go to buy things.Facebook stands in contrast to other social media like Twitter, YouTube, and Instagram where all content is shared with all followers.
I don’t spend much time on Facebook, even though I have my blog posts automatically posted to my timeline. When the video ads start to arrive, it will provide me with even more of an incentive to avoid spending time there.
H/T to Cate Matthews for the link.
Update: Apparently the folks who “Like” their own posts are not egomaniacs (well, not all of them) … they’re rationally responding to how Facebook‘s algorithms rank posts for deciding what will appear to your friends. A post with a “Like” is much more likely to be shared than one that hasn’t been “Liked”.
