Have you noticed that the voices of social network utopianism are quieter lately? Facebook’s secret mood experiment didn’t help the idealist view – nor did COO Sheryl Sandberg’s apologetic acknowledgement that Facebook’s actions were merely “poorly communicated.” But I think it would be a mistake to read this as simply another in a long line of privacy glitches Facebook is famous for – and invariably moves beyond. This is part of a definite and predictable pattern involving not just Facebook but all social media, now mostly run by public companies, whose true natures as commercial businesses are emerging to dominate the treasured user illusion of a “people’s medium” like Wikipedia. I know that sounds cynical, and please don’t get me wrong – all media must appeal to an audience by offering compelling experience, and Facebook’s audience is the largest and most engaged ever assembled – a truly global community – and there’s absolutely nothing wrong in my view with monetizing it through advertising. In fact, as Google has proven, like it or not advertising is the prevailing business model for nearly all massively popular eyeball-attracting experiences, no matter how techie the roots; when social meets media, it’s the media genes that dominate.
There’s an important cultural implication here. Facebook (unlike Twitter) filters news feeds algorithmically – this is its equivalent of an editorial voice. Looked at this way, using its algorithms to manipulate people’s emotions is not so different than using drama to do the same thing – except that we expect this from drama (or should, anyway). So now we know: expect this from social media as well. It’s in business to serve advertisers. That means consolidating influence. Our version of the truth has always been subject to economic forces – now, the mechanics of influence are more intelligent, but it’s still the content that grabs us and holds us, even if it’s filtered news from friends mixed with ads.
Which is why Facebook just spent a reported $400-$500 million to acquire LiveRail, a video ad tech company connecting marketers with publishers to target 7 billion video ads per month. LiveRail is hooked into mainstream media – it counts media companies such as ABC, CBS, Univision, A&E Networks, MLB, and PBS among its customers – and Facebook says it will use its data to help improve the targeting of video ads. This comes on the heels of Facebook’s announcement of its Audience Network service in April, which lets advertisers extend mobile campaigns beyond Facebook’s social network – using the same targeting as Facebook’s native display ads, including Custom Audiences. So Facebook is no longer a separate continent competing against the mainland of the web for attention and ad revenue – it’s now, like Google, AOL, and Yahoo, part of the larger ecosystem of advertising that can follow and target consumers wherever they may roam – even to mainstream media sites and apps.
Meanwhile, remember “earned media?” According to some experts, it was going to make paid media obsolete. Facebook’s taken care of it. In its youth, the social network allowed brands to reach their fans – which could number in the millions – just by posting. This led to a massive exercise in fan base building and elevated the “like” to metric status. Now it’s not so easy. Facebook has taken to throttling commercial posts so that only a small percentage of unpaid posts make it through to followers’ newsfeeds. Another example of editorial control through algorithms – in this case, boosting Facebook’s bottom line by charging brands for audience reach the old-fashioned way.
I could go on: Twitter’s purchase of TapCommerce, a mobile ad retargeting platform, fits the monetize-audience-first picture, alongside Namo and MoPub. (SnappyTV is a bit more nuanced.) But here’s the bottom line: as disruptive as companies like Google and Facebook are to traditional media, they’re not killing the ad business. They’re using data, analytics, and huge global audiences to make it more competitive – but, as Gartner’s recent survey confirms (subscription required), advertising is not going away.