Yesterday night I watched the Netflix documentary dedicated to social media, The Social Dilemma. The thesis developed by the film is that we, the users of social media, are victims of constant manipulation. This is due to the business model of all major social networks (and other digital properties): advertising.
Businesses need advertising
There's just one key challenge not properly addressed in the documentary: our current economy needs advertising. Not so much to enrich the layers of middlemen handling the pipelines (agencies, trading platforms, management tools,...) but simply to generate revenues (and ideally profits) for all companies, big and small, who are in the business of selling stuff to the rest of us.
All businesses must initially catch the attention of potential customers. And it doesn't stop there. Since there are always new competitors popping up and new products or services brought to the market, all companies need to maintain a constant presence in their customers' mind. They need to stay "top of mind". How do you do that? Well, call it whatever you want, communication, marketing, PR,... but at the end of the day, for your message to be seen or heard, it needs to be distributed in the wild. Either you own a media or you need to rent attention space on someone else's property. This is advertising.
The switch to e-commerce increases our dependence on advertising
You might have read a flood of articles narrating the growth of e-commerce during the first phase of the 2020 pandemic. In the US alone, online sales grew 30+% in the first 6 months of 2020, compared to the same period in 2019. Bad news for companies mainly active on the High Street but great news for pure e-commerce players (with a big chunk of the cash landing in Amazon's coffers).
The internet is often compared to an information highway, an infinite immaterial road where our eyeballs and ears are constantly on the move. The problem is that there's nothing like serendipitous footfall on the worldwide web. We rarely push the virtual door of an e-commerce shop just by chance, as we would on the High Street before Christmas, attracted by a product on display or simply by the store's atmosphere. Most of the online traffic is the consequence of some sort of traffic redirection, of a billboard planted on the side of the information highway. You can play the long SEO game, invest in content and hope for organic traffic, true, but you don't have full control on the results, on their sustainability and, most importantly, you can't generate instant traffic, which is crucial in a time-sensitive marketplace. If you want to exist in the digital realm, you need to invest in advertising, even more today than before.
Where can you advertise your business?
If advertising is necessary, where can you find eyeballs (or ears) which can pay attention to your awesome offering? Where do people hang out when they're online? There's a good chance they spend a significant amount of their time on one of these platforms: Facebook (Messenger, Instagram, WhatsApp), Google (Youtube), Twitter, Pinterest, TikTok (and similar players on other territories). They might also read a blog post, skim the headlines of a newspaper or binge watch a series on ad-free Netflix but you can safely bet that they'll be, at some point or another, on one of the above mentioned platforms.
These platforms offer scale, frequency and consistency. It makes the job of the advertiser (or their agency) much easier: you don't have to spread your budget between 50 different channels. If you invest in Search + Display on Google Ads, on social ads on Facebook / Instagram and spend some money on other networks depending on your activity, you can safely assume that you'll be reaching most of your target audience multiple times a day. As one of the interviewees stated in The Social Dilemma, these platforms offer certainty. I would add... "at a fairly good price". I'm familiar with multiple businesses generating millions of dollars of annual revenue by finding most of their customers on Facebook / Instagram with no more than $100 per day spent on advertising. That's $36500 per year. Which is less than an average (small) commercial rent in a major European city and far less than what you'd need to spend on old-school media outlets (TV, magazines, outdoor) to achieve the same effect. $3000 (1 month of decent advertising on FB) wouldn't even buy 30 seconds of prime time TV in a small country.
Around the corner, via Menlo Park
Think about it: these days it's much more effective for a local coffee shop to advertise on Instagram than to distribute flyers or pin posters in the local community. In other words: to reach people living or working in a one-mile radius around your business, you buy advertising from a company located in the Bay Area. Why? Because it works. What if you stopped doing it? Your competitors wouldn't and you'd be out of business. Is there a viable alternative as we speak? Not that I know. And that's the main issue.
Due to the importance it has taken in the economic fabric of our society, you can't get rid of advertising in a laudable attempt to save the world from polarization. And because of the effectiveness they offer in terms of advertising, in the absence of a viable alternative, you can't ask Facebook, Google and alike to renounce overnight their attention-driven business model. It won't and it can't happen.
You could argue that we consume too much stuff, that we should spend less money on things we don't need, that we don't need so many businesses and so much advertising to sustain them? Probably but that's another debate and you can't solve all issues at the same time. You can be irritated by the concept of the "Attention Economy" but what could be the alternative? How could you make people aware of your offering if not by attracting their attention in one way or another? It doesn't have to be sneaky, it could be more contextual than personalised but at the end of the day, if potential customers aren't aware of the existence of your product or service, they won't buy it and will purchase from the vendor next door.
How could we develop a viable alternative?
Is it possible for the incumbent social networks to amend their ways? Probably. They could start by bursting the filter bubbles isolating us in silos of self-reinforcement, even if this would create some discomfort among users suddenly discovering a myriad of discordant voices. They could also move from a uber-personalised advertising algorithm to a more (post-cookie) contextual approach. They would still generate a lot of money thanks to their massive scale.
Could they leave some breathing space to smaller, national, regional and even local digital players? It's a tough one. By definition those networks gain efficiency through scale. And you can't achieve true scale in a fragmented marketplace. The internet didn't invent media consolidation. Look at the story of Clear Channel / iHeartMedia, built from hundreds of acquisitions of independent radio stations in the US. You could argue that it killed the magic of local radio but in an economy driven by the efficiency of scale, you rarely see corporate (shareholders') value created by a collection of inconsistent entities. Even more so in media where, as I said before, consistency ensures certainty.
Nevertheless, I could see a model where scale and proximity could live in harmony. Facebook, Google - and if we want to expand the debate to e-commerce, Amazon - could nurture a network of local outlets which would be the port of call for small businesses. This would humanise these companies and create local opportunities. There are multiple ways to do it: through a traditional top-down franchise approach or, more discreetly, by offering the tools and the operational assistance to proximity players (kind of what Shopify is doing with their POS integrations). One important thing though: those local businesses should have a true voice in the governance of their operational partner. These days, agencies and advertisers are at the mercy of Facebook's sudden change of mood and appreciation. I would love to see a future where communication goes in both directions.
The case for open-source decentralised networks
With the advent of cryptocurrencies, we've seen the incredible potential of decentralised networks, where trust can emerge at a global scale without a central power. The same concept could be applied to social networks, powered by a consistent set of efficient tools without the need of an omniscient central owner.
There have been a few attempts to decentralise social media but the user experience so far has been subpar compared to the UX delivered by Facebook or Google properties. Social media users aren't willing to compromise on the quality of their experience. Any viable alternative should deliver the same level of UX/UI execution.
Will Facebook open source its platform?
Believe it or not, in 2008, Facebook announced that they would open source their platform. There was even a link to download the source code, right here. If you click on the link, here's what you see today, a 404 message:But Facebook has also a good track record in open sourcing outstanding tools, such as React, an open source front-end JS library or most recently Blenderbot, their state-of-the-art AI chatbot.
You can find the full list of open source projects on Facebook's website. It's very impressive and we can be grateful for their contributions. But the core engine, the platform itself, is still very proprietary, with no obvious sign to move to a decentralised model.
I do think that Mark Zuckerberg would be remembered as a real mensch if he decided to relinquish his control over the network by open sourcing the core platform to enable an infinity of social nodes, united by an efficient consistent backbone. From such a move could emerge an infinity of opportunities, from niche to proximity networks.
Facebook could become the WordPress of social
The company could still provide reliable hosting, premium add-ons and white glove services for a selection of VIP clients, similar to what Automattic does for WordPress.
Google could also facilitate the emergence of vertical search engines by open sourcing their technology. The same concept could be applied to most digital behemoths.
This would of course require a fundamental paradigm shift. But if we want to consider the points raised by Jaron Lanier, Tristan Harris and other commentators featured in The Social Dilemma - and I think we should - it is urgent to have this debate and come up with concrete suggestions.
In my opinion, valid options will have to preserve the effectiveness of advertising which is essential to our current economy. We could open another debate about consumerism but, as I said before, you can't solve all issues at the same time.
Pragmatically, my conclusion is that the handful of online global leaders could consider a viable way to open source their core platforms to spark a new generation of decentralised agoras where attention would be safely traded for information and entertainment while preserving privacy and human sanity as a whole.
But maybe I'm carried away by enthusiasm, missing a crucial point...
This benevolent approach would only work if the operators of the decentralised nodes don't fall into the same algorithmic traps as the legacy centralised networks. With our history of blunders on repeat, honestly, there's a high probability decentralisation would just atomise the problem, at scale.
I'm curious to see what the future holds.