The problem with Facebook is that it's keeping things from you. You don't see most of what
is posted by your friends or the pages you follow.
Now pages can be business or they can be individual creators like I freaking love science or my
own page, Veritasium. When you post something on your personal page,
it only goes to a small fraction of your friends. Now if they like it and engage with it will
be spread to more of them, but if they don't the post basically stops there and the number
of people your post reached is never revealed to you.
Now imagine what this does to newsfeeds. Friends and family and pages that you don't actively
engage with will disappear over time. This usually means that people you disagree
with will vanish, leaving you with a newsfeed that's effectively an echo chamber of
self-affirming views, the things you already think and believe.
And don't you thinks it's possible to see a post and find it interesting without having
the need to actually 'like' it or comment on it? I mean, it seems weird that you need to
put out there every view, you need to make that an active choice.
You know what posts people like most of all? It's babies and weddings.
Does this newsfeed look familiar? Now Facebook would argue this filtering is
absolutely essential. The average teen has about 300 Facebook friends
and the average user likes 40 pages. Each day 4.75 billion posts are shared across
the site. That's an average of about four per user. Who is sharing all this stuff? It
certainly isn't me. But that means that if you are logging in
once per day you could be exposed to up to 1500 posts.
Okay, so clearly some filtering is required. The problem is Facebook is using its filtering
power in order to make money. And just to use myself as an example, over
109 thousand people have liked my page. Thank you to those of you who have done that.
But the last time I shared a video on there it only went in the newsfeeds of about 9000
of those people. This continues the downward trend in numbers
I've been seing. In a recent factsheet, Facebook stated:
"We expect organic distribution of an individual page's posts to gradually decline over time"
That means that they are actively restricting the reach of posts from people like me in order
to force us into paying to reach the people who have already indicated that they like
what we do. It doesn't make sense for independent creators
like me or for charities or non-profits or for individual users like you. I mean, did
you know you could pay to promote a personal post?
Like that time that Bill Nye taught you how to tie a bow tie?
Yeah, seven dollars more and more of your friends can find out about that.
That to me seems crazy and desperate. Take a second and think about this. On Youtube,
creators are paid for every view of their content, whereas on Facebook it's the opposite.
Creators actually have to pay for views. How does this work? Why in these two seemingly
similar situations does the money flow in opposite directions? Well I've got three ideas.
First, people go to these sites for very different reasons. They go to YouTube to be entertained,
to see cool new things and to learn. In contrast on Facebook they go to catch up with friends
and family, to share pictures and messages. So family and friends are really the main
draw. Now second, on Facebook the interaction with
posts is very brief. So it's difficult to say how much a great page like ScienceAlert
or I Freaking Love Science actually brings people back to Facebook. Undoubtedly they
do, it's just very difficult to quantify. In contrast on YouTube every view happens
for minutes on a particular video. And the amount of revenue generated is known, so it's
easy to identify how much value is created with every view.
Third and perhaps most important, on Youtube the roles of creators, advertiser and viewer
are distinct. The creators make the videos that the viewers want to watch. The advertisers
make the pre-rolls and the banner ads and the majority of viewers are not also creators.
In contrast on Facebook the creators are treated like advertisers, they have to pay to reach
the viewers, and viewers themselves are also creators, so viewers are also advertisers.
You know, when Facebook launched the functionality that allowed us to promote personal posts,
one reporter commented quite astutely that we are all now advertisers. And that is the
problem with Facebook. We are all advertisers because Facebook can't figure out another
way to monetize its humongous user base. I mean, people don't click on those sidebar
ads because, well, they don't come to Facebook to shop for things. The click trough rate
is only about 0.05%. Compare that to 2% for Google Ads. Well that makes sense because
people actually go to Google when they want to buy things.
The result of Facebook's business model is a misalignment of incentives. Users just want
to see the best content out there but increasingly they are just being shown the content from
the highest bidder. The main organically shared posts are going
to be the ones that appeal to the lowest common denominator.
Plus while you're trying to hang out with your friends and family you're going to see
ads from big companies. In 2014 Facebook is set to launch video ads, and this from a site
that has basically no video content. Compare this to YouTube where the viewers
want to see the best videos that match their interests. YouTube wants these viewers to see
as much relevant content as possible, the creators want to reach as wide an audience
as possible and the advertisers just want to get in the middle of everything. The point
is the incentives of all parties are aligned. In 2013 YouTube made over 5 billion dollars,
most of which was paid back to the creators, the very people who make the site worth visiting.
Facebook made 7 and a half billion dollars but that all went back to the company and
shareholders, not the people who make the great content, who are mainly your friends
and family. I think this is a cautionary tale. The beauty
of social media is that it's the user who gets to control the content, who they interact
with and how. I mean, on Twitter they don't filter any tweets and every picture you Instagram
goes to all your followers, at least for now. But Facebook is taking control of what its
users see in order to make money from them. I thinks that's a problem because of the way
it's changed the incentives. I mean, Facebook has this ongoing incentive to restrict more
and more the organic reach of posts in order to force people to pay to promote them and
I think that really changes the ethos of the site.
But what do you think? I really want to hear what you guys think about these aspects of
social media and whether you are seeing a similar thing to what I am seeing?
Just one last thing. I don't really expect Facebook to have great revenue growth prospects
for the future because they have already basically saturated the whole developed world. And everyone
I think is using Facebook as much as they ever will which is about a half hour a day.
In contrast if you look at online video, people are only watching about two hours a week.
Compare that to over 20 hours a week of TV. So I think online video still has a lot of
room to grow whereas Facebook may have reached its peak.