Why advertising doesn’t work as the business model for discussion sites

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Alex Hern’s interview with Roger McNamee on The Guardian: ‘It’s bigger than Facebook. This is a problem with the entire industry’ prompted me to buy McNamee’s book  Zucked: Waking Up to the Facebook Catastrophe.! I highly recommend the book for anyone wanting to understand why the DNA of social networks – their baked-in model of advertising – is antithetical to the needs of their users.

Here’s the problem in a nutshell according to MacNamee:

It never occurred to me that there would be an asymmetry in the way that advertising works. That in order to command attention, you want to appeal to what [Tristan Harris] calls “the lizard brain”, the things that provoke outrage and fear. Things that essentially create a perception of reward. Those things, when you put them into advertising, can really be bad for democracy. Suddenly a neutral centrist idea gets very little traction on Facebook, where really extreme, emotionally charged ideas are viral.

The issue with Facebook and other ad-supported social media sites, is that their goal is very simple: attract as many users as possible then garner as much attention as possible – which they call engagement – from these users as possible, early and often. Then gather as much private data as possible about these users. This data is then used to target advertising. This works amazingly well, as anyone familiar with the financial success of Facebook can recognize. But while it works well for Facebook, it doesn’t work very well for users, especially those users who want to enter into a thoughtful discussion with their peers.

… the business model that Facebook and Google have created is something we’ve never seen before.
They were very much in the business of manipulating attention in order to get you to spend more time on [their services]. And that is a very dangerous business model for society. It’s bad for the mental health of the people who use it.
The problems are not isolated. They are systemic. They’re related to a business model that has worked extraordinarily well for investors and horrifically for everyone else. The failure to recognise that moderation would’ve been a better long-term strategy for the company is ultimately going to be very costly, because they are leaving governments around the world no choice but to bring the hammer down.
Simply put moderation does not scale to the enormous user base of Facebook – 2 billion users. Facebook never built moderation into their platform and never will. Here are some of the problems you get when you forego moderation on a discussion site:
  • Fake accounts – yes in theory Facebook requires your real identity and in fact I applauded their insistence on a .edu email address when they launched in the college market, as I had seen the problems anonymity can cause on message boards. But today Facebook is rife with fake accounts. For all you know you may be commenting on a post by a bot!
  • Disinformation – as we’ve seen in the Russians’ attempt to sway the 2016 election to Trump, it is far eaiser to spread disinformation than truth. There is only one true fact, but there are an infinite number of false ones when it comes to any issue. This asymmetry dooms any site that relies on algorithms to moderate their discussions, as facts are easily overwhelmed by falsehoods or “fake news.”
  • Trolls – angry young men with access to computers have existed for decades, and yes it’s mainly angry young men who post provocative and worse content in order feed on attention. Unfortunately few people realize that the best way to kill off trolls is to ignore them, they die of starvation. Facebook and its advertisers benefit from trolling, however, as it generates page views and engagement and concomitantly advertising opportunities.
  • Lack of helpful profiles – on the heavily moderated discussion site I frequent, Steve Hoffman’s Forums, every user is given the opportunity to post a profile and most do. The subject matter of the Forums is mainly music and music technology, so knowing what equipment a poster owns and if they are a professional musician or engineer, really helps understand their potential biases.
  • Violent and pornographic content – YouTube, which has thousands of very useful, informative and entertaining videos also plagued by content that fit for neither work nor home.
  • Fake ads – this is a great way for bad actors to make money and it cheats honest advertisers and worse yet can even damage their reputations.

I’m sure there are even more problems baked into the advertising model than I’ve listed above. But the answer to all of these problems is two-fold: verified identity and moderation. In 10 years of frequenting Steve’s forums I’ve yet to run into spam, trolling, disinformation or any other of the problems of advertiser-based social networks. Steve’s volunteer team of moderators does a great job and he makes very clear to newbies what the rules of the road are – if they are frequently flouted the user is banned.

But as I wrote above, moderation doesn’t scale well – the number of users on Steve Hoffman’s Forums is a rounding error on Twitter or SnapChat, let alone Facebook. Heard the expression, “Small is beautiful”? That applies to any discussion-based site, I’m afraid. Until AI gets a lot smarter, and far more important, until social sites move away from the advertising model, Facebook and others like them will  fight a losing battle against fake accounts, disinformation, trolls and all the other ills they fight with.

So if you are planning an online business that is going to rely on UGC – User Generated Content – and advertising based on that content, you are going to have to either keep your site small or succeed where Facebook and Twitter have failed – presenting a clean, well lit room for thoughtful discussions to take place to vast numbers of users.

 

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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