Recently Derek Muller from Veritasium posted a YouTube video titled Facebook Fraud. Described as evidence that Facebook’s revenue is based on fake likes, it has been a social media sensation. As a result, the video clip has not only registered more than 1.5 million views in just a few weeks, but it has also attracted an incredible amount of commentary.
The video demonstrates that paid promotion of Facebook pages ultimately result in fake likes from click-farms. If that wasn’t bad enough the flood of fake likes from these click-farmed individuals then drives down genuine reach and engagement on the page you paid to promote. So in essence, once you start to pay for promotion, that page will require further paid posts just to have the same effectiveness as it would if you paid nothing at all. For those that are not familiar with the workings of Facebook, simply put, the more you pay to promote your page, the smaller your audience becomes. This of course is the exact opposite of what anyone paying for advertising would want.
Of course this has led to some classically predictable commentary (or online comedy) with people lining up to stick the boot into Facebook, trying to be the first to say, “I told you so”, or predicting the end of Facebook’s business model. On the other side of the fence are those seizing the opportunity to write blogs about the benefits of this counter-intuitive system, or how good marketing skills and digital strategies can circumvent this minor issue. As ridiculous as it seems, it’s hard not to agree with all of it.
For a start, this sham business model doesn’t affect the ‘classic’ Facebook user. Those that genuinely connect to friends and family, who use it to post pictures, message friends and connect their social network will never encounter this situation. It does however have serious implications for those attempting to use Facebook as a store front for their own businesses online. The system as it presently stands rules out the perceived capacity to set up a Facebook shopfront to a billion individuals and trade successfully overnight. Ironically it means that just like any bricks and mortar store, Facebook shop owners must build a genuine clientele through the social network itself. Anyone who has done this in real life or online will know this is a painstaking task that done right can take years. After all, if it was really that easy, everyone would be Facebook millionaires.
This expose’ really does put the Facebook business model in a precarious situation. Facebook has made its money promising those that paying for advertising gets access to larger audiences. If this is not the case, then the reality is that there is nothing to pay for and Facebook has been misleading advertisers. It also raises questions beyond the click farms and warrants an independent investigation of how many genuine profiles Facebook actually has. Research shows that 90% of online audiences are largely inert and 10% of genuine users possess click farm personalities and will like/click anything in front of them anyway. If this is the case you would think Facebook shares would plummet. But they won’t because the majority of Facebook investors probably don’t understand the basics of social media.
That aside you can be sure that the hoodies behind Facebook have known about this weakness in their business model ever since they foisted it on the public via their share offering. Since 2010 Facebook has acquired over 20 apps and 10 companies, often purchasing them at way above their market value; leaving many of us wondering why the Bureau of Competition isn’t asking questions. The answer as revealed in the Veritasium video is simple. Facebook has widely overstated its number of real users in its rush to market. While there is a solid core of people who use the social network as it was originally intended, these personal networks are not as open or easy to reach through advertising as might be suggested.
But it seems Facebook has already found a quick fix for the problem. Instagram and WhatsApp are both social media applications used by real people to communicate to each other. The former is an image sharing app, purchased for $1 billion price tag, the latter a mobile SMS service just purchased for $19 billion. Their value is not actually in the app, which Facebook could create themselves if they wanted, nor is it a strategy to prevent drift away from the blue and white timeline. The value is that in these purchases Facebook also acquires the genuine audiences using these apps. The added bonus is that many of these people (Instagram 150million/ WhatsApp 400million), quite possibly don’t use Facebook regularly but can now suddenly (and unwittingly), be included as part of the Facebook audience.
We’ve seen from the Facebook app Paper that the social network knows where it is headed in the future. They obviously have plans to combine all their platforms into a personalised content stream. The only hitch so far is that their business model requires genuine profiles and people, not click-farmers. Ultimately the solution has been as simple as buying a real audience from wherever they currently exist.
For more on this topic, watch FiST Chat 157: Does Facebook Advertising Work?
This entry was posted in Technology and tagged click farms, derek muller, facebook, facebook ads, facebook advertising, facebook boost post, facebook interactions, genuine interaction, get facebook likes, how to get facebook likes, how to get more likes, social media, social media advertising.
2004: A service to the people
Whatever happened pre-2004 in Facebook land is still a mystery. What happened after February 2004 when thefacebook.com launched is now history. Why was Facebook so successful? Consider the landscape at the time. The browser was still a relatively new concept as was the website. Despite so much promise during the dotcom era, there was very little online content available; PCs were basic and the bandwidth was still limited. Real time communication was usually typed through chat boxes or email trails.
Right from the start, Facebook was easy to use, clean and fresh. For many, it broke down the geographical barriers to communication for the first time and also strengthened networks of friends and family. That people could connect from anywhere and communicate in real time made it a vibrant and exciting place to be. It made the web interactive, it made the web exciting.
2014: Big data and big money
Now claiming more than a billion users worldwide the Facebook user interface is essentially the same as it was in 2004, however what goes on behind the screen is radically different. Facebook is now a public listed company that no matter how you dress it up (as social media or otherwise), is a corporation that makes money from big data. The information you share, the content you like and the people in your network are mashed up by Facebook’s EdgeRank algorithm and turned into advertising dollars. To highlight just how big a business it has become, Facebook now employs over 6000 staff, generates almost US$8 billion (yes, BILLION) a year in revenue from online advertising and posted a profit of US$1.5 billion in 2013.
We’re all familiar with the privacy issues and the rumours that the kids are turning off, but it would be a safe bet to say Facebook is here to stay. The last few years have seen their focus turn towards mobile devices, and the creation (or more correctly acquisition) of apps that enhance the mobile experience. They have also noted that their audience’s interests have evolved from self-posting activities to incorporate more content sharing. To capture this shift they have responded by releasing their own app called Paper, which is the first step to modernising the Facebook interface.
2014-2024: Predicting the Future
No one is too big to fail in the online world, but Facebook has a business model that like Google is open to both change and growth opportunities. Having said that, for many observers predicting the demise of Facebook seems to have become something of a hobby. While that premise might be true if the Facebook experience was to remain static, the reality is that Facebook has already shown an ability to evolve and adapt with technology and its audiences. Paper is an example of this, acknowledging that the social audience now wants experiences beyond the original blue on white timeline.
Using Paper as an example; in the next ten years you can expect to see Facebook increase its presence across a number of distinct apps, but integrating the content into a social media context. Expect to see some dedicated real-time communications channels emerge similar to Snapchat and Skype. Also expect to see an increase in content aggregation as the demand grows particularly amongst younger users.
But the real game-changer could be if Facebook moves into content syndication and delivery. Imagine if trusted news mastheads were to deliver content through the timeline. What if a Hollywood studio got on board to deliver films direct to the home? What if Facebook decided to produce bespoke content (complete with advertising) for certain audiences? And let’s not overlook the merchandising opportunities, available exclusively through the Facebook retail store.
These predictions are fairly simple extrapolations of trends we are already seeing today, so I’ll throw one big vision out there just to make a statement. If we think about where social media technology is headed, what audiences might want and what the world might be like in 2024 then we can see exactly where Facebook fits in. Today Facebook is sensory thanks to touchscreens, and quite possibly that’s why its loved by so many in mobile form. Tomorrow though, with products even more advanced than Glass, we will be able to walk through our timeline to create and interact with posts, events, content and friends in our social network. Facebook will very likely be a 3D virtual world instead of a 2 Dimensional timeline.
These predictions and next ten years will speak for themselves over time, but expect Facebook to be around in 2024. Remember that all that data we post daily upon the social network allows Facebook to know what all of us want, before even we know that we want it.
The Internet was once claimed as the ultimate democratisation of communication. Perhaps it still is, but in a global environment, the current online realm remains an unlikely paradox of fact and fiction. So many people are able to access this virtual world, and use it to connect to other likeminded individuals. There is no truth or confirmation filter on the mass of data uploaded and shared around. Data put there by humans for all sorts of reasons just ‘exists’ like thoughts in the cloud, and it is up to other humans who encounter it to decide its accuracy.
So intricate are the movements of messages, memories and online actions within the internet, some researchers have likened the structure of the internet to that of the human brain. The human brain can use reason and logic to filter misleading information whereas the internet has no such system. The internet entities like Google, Facebook and Twitter create the placeholders through which we communicate, but they exist in an unimaginative monoculture that doesn’t have the capacity to identify reality from fantasy. Is it possible that there is just too much chatter and noise within these networks to separate professional from personal, public from private, truth from fiction?
As journalist Markham Nolan points out, the modern process of news gathering is not such much about finding a story as it is ensuring the story is accurate. Thanks to modern communications and the popular social media channels (especially Twitter), ordinary people now break the news. Wars, natural disasters, scandals and tragedy; if there is a witness, they can broadcast it to the world within seconds. According to Nolan, the job of the journalist is now to make sure that the image uploaded or the statements made are indeed factual and can be relayed to the wider community through a trustworthy news source.
On another note, the more sobering aspect of Nolan’s technique was just how easy it was to verify some stories (using Google maps and other free apps); and Nolan’s comment that he could easily find out personal information about most of us using these tools. It is concerning that an enormous amount of personal data is available via the Internet channels we use, especially as more and more data is collected and stored in the cloud.
Some governments are now linking drivers’ license images to facial recognition software and surveillance cameras. Software that can recognize personal mannerisms (like the way you walk), can also be used to identify you. The proponents of these technologies maintain they are for public safety, but in the modern age these same technologies can be harnessed by crime to target the vulnerable and innocent. Although it is unfashionable to say otherwise, people that post their names and birthdates online, and publish their images, locations and activities in real time are opening themselves to serious exploitation. The next big crisis the Internet and the online community will face is likely to be a new form of identity theft that exploits the mass of personal data available online and creates virtual and fraudulent simulations of innocent individuals. If standard internet apps can be fooled or corrupted by false data, will human intelligence be the last bastion of truth on the net?
But back to the similarities between the internet and the way the human brain works. Some scientists see the communications structure of the internet as analogous to the neural connections formed in our brains. As a result, researchers are constantly developing tools to study the interactions between online networks and information. Will a greater understanding of the online environment give over the mysteries of human intelligence and personality? Could it mean that scientists such as Hayworth will one day discover a way for people to upload themselves to online immortality? Perhaps the real question is not if we can, but why we would?
Watch FiST Chat 98: Unlimited Uploading For All for more on this topic.
Welcome sports fans to London 2012, officially the games of the 30th Olympiad and the last of the modern era. That’s right- the last of the modern era. Due to the explosion of digital technologies, the games of the last 112 years are now about to change forever, morphing into a mix of social media, digital convergence and genetic engineering.
With few exceptions, most sports at the games falls into the individual competition category that only ever attract public interest during the running of the games. Hence the Olympic Games produce a rare breed of free-lance competitor- part hero, part personality and part brand. As way of example, you just don’t get athletes like Usain Bolt, Michael Phelps or Melanie Schlanger in regular professional leagues.
It’s for this very reason, the games will change forever after London, and a number of technological developments will create a whole new way for both competitors and fans to experience and interact with one of the greatest shows on earth. Perhaps we will see these predictions come true in the future?
Social Media is already revolutionizing these games. Athletes are keeping fans up to date on their progress 24/7- and commentators are even blaming loses on it. But by the next games in 2016, it’s hard to imagine that any one of the ten thousand athletes competing, won’t be recording their own personal experiences on a smart phone and using twitter, facebook, instagram and/or pinterest to share it with their individual fans. Try as they might, the IOC won’t be able to stop it. When they do the athletes will threaten a boycott, and a breakaway games of their own- perhaps the Goodwill Games will make a comeback?
Which brings us to the games broadcast, and a bold prediction that TV networks (free and paid) will not be coughing up the big bucks they are today for rights in 2020. The way in which we view all content is changing rapidly, and the trend toward on demand and internet delivery to mobile devices will erode networks ability to make money.
This problem is already occurring this time around as traditional media outlets struggle to cover the costs of broadcast rights with advertising. In future expect to view the Olympics through a combination of an Olympic pay wall, and non-exclusive media coverage, quite possibly hosted by your phone and Internet provider. This development will see top athletes become media outlets in their own right, and able to sell their experiences to fans on-line, complete with sponsors branding.
But the biggest change to the games are still a few decades away. In the meantime drugs and doping will become more and more difficult to detect. But by 2020 advances in gene technologies and changes to the rules regulating assisted reproduction, will see drugs and doping obsolete. Extra copies of growth hormone genes added in vitro or genetic trait promoters will produce athletes to order, physically perfect specimens for the sport pre-selected by their parents.
So good luck to all the competitors at London 2012, and for those of us spectating, let’s make the most of the 30th Olympiad. While the excitement of the Olympic Games will continue well into the future, whatever happens we can be sure that they will never quite be the same again.
Watch FiST Chat 79: The Twitter Olympics for more on this topic.
Last week’s Facebook IPO is a milestone for the social media industry and its meteoric rise over the last decade. It signals the coming of age for social media, recognizes ‘information’ as a commodity and establishes a commercial value for any other business in the same sector.
When you really think about it, Facebook is a marvellous idea. In its original form it was little more than a personalised webpage, which could be regularly updated. It was a simple format, with an easy layout that allowed you to share your personal activities with friends. All Facebook provided was the standard template and a web-based network, you provided the ‘friends’ and the content. That was what the site was designed to do, it was free with no strings attached; people ‘liked’ Facebook.
Fast forward to the present, and Facebook is the premiere social media site, boasting 900million users, thousands of shareholders, offering mobile access, video calling, advertising and sales, informatics, apps, social/media impact campaigns, the list goes on and on. The enterprise is now valued by the markets at around $100billion- very impressive, especially considering you still provide the ‘friends’ and content. Facebook still provides the user with a template and network for free, but creates monetary value from controlling the network and accumulating data about its users which it can then on-sell.
What is truly remarkable is the nature of this social media business. Facebook grew with the evolution of the online community, in an amazing and dynamic symbiosis. Mark Zuckerberg has been both inspirational and at times visionary in his approach, but it would be misguided to suggest he could have planned this, no one could have. Rather his brilliance has been to sense and harness the mood and the needs of the Facebook users and in essence create two intimately connected businesses, one for the users and one for the advertisers.
With the listing of Facebook on the bourse he has now added a new business situation to the equation that may start to complicate matters. Shareholders want returns, company value is pegged to share price and profits. In this case, profits depend on happy advertisers, which depend on happy Facebook users and the information and networks they generate around themselves. Such is the nature of the social medium, should this balance is upset for some reason, then the entire enterprise could be left behind as quickly as we’ve seen Blackberry and Nokia lose their markets.
At the moment there are no competitors to Facebook, and any potential competition has been bought out quickly. While this can be done easily as a private company, it might be more difficult for a public company to do so without the approval of shareholders. Some of this could even be considered anti-competitive, although its hard to see how current laws could be applied in this situation. A significant privacy scandal could also cause an exodus that would see Facebook’s popularity wane. With a focus on profit maximisation working against the needs of users, a scenario such as this becomes all the more likely.
But social media is business built around human behaviour, and our species is a strange one. We can be convinced to follow all manner of fashions until our interest fades. On Facebook it only takes a single click to ‘unlike’.
Watch FiST Chat 69: Facebook Goes Public for more on this topic.
In recent times the on-line presence of corporate behemoths Microsoft, Apple, Google and Facebook have given rise to a number of controversies over internet privacy policies. At the heart of these issues are the current business models that necessitate corporations to record your identity, track the sites you visit, store that data in their systems and then target you with personalized advertising.
Google’s new policy allows them to collate your data across the 60 or so Google services provided to online and mobile users. However, this only applies to those that have, and use these services within a Google account.
Under the new policy, once you log into a Google account, the way you use services such as Google search, Google maps, Gmail, YouTube and even your mobile phone (Android) can be tracked, stored and accessed by Google. The result is your on-line experience will now include targeted ads popping up that relate to the websites you visit, the keywords you search for and your location. Google does not offer an opt out on this policy.
So what’s the big deal? Google have flagged these changes openly. What’s more, if you avoid using a Google account and being careful with your history, then its possible to keep much of your web use data generic. By now all users should be aware that no matter what searches or sites they explore (Google or otherwise), someone has a record somewhere. The days of online anonymity and privacy have been gone for almost a decade.
So the emotive descriptions of internet, big brother, privacy and Google make great headlines, but in doing so they disguise the real truth about the erosion of our privacy rights. Data mining is as rampant in the real world if not more so than on the internet. Shopper and service based loyalty programs typically have your personal details (credit card, email, mobile phone), the times you like to shop, what you like to buy and where and how you like to spend your money. These organisations can then target you with a whole array of direct marketing that extends well beyond pop-up ads on the internet. Worse still, you pay them for this privilege. At least Google services come for free.
For those that want to be aware of where their on-line data is headed, there is a new Mozilla plug-in called Collusion. https://addons.mozilla.org/en-US/firefox/addon/collusion/ This app allows you to see which organizations are tracking you in real time. Several minutes use demonstrated that visiting even a reputable news site might result in your data being distributed to as many as 10 tracking sites. This is a particularly sobering exercise as it demonstrates that Google’s policy is no worse than any other commercial on-line operation. Its just more visible, because it’s the service provider most of us use.
If we’ve learnt nothing else from the phone hacking scandal it is that private data held with third parties is always accessible to others. Social media might seem like harmless fun, but too often we allow it to reveal our identities: names, birthdates and locations. This is all somebody else needs to become you.
No person or organization can guarantee the safety or security of our personal information, not Google, not any corporation, not even governments. So its certainly not science fiction to suggest that somewhere in the not too distant future lurks another high profile scandal involving privacy that will shake public trust in the on-line environment, and change the way people use the internet forever.
Watch FiST Chat 62: Big Bad Google for more on this topic.