Paul Johnson, head of development at Livelink, discusses recent changes at Facebook and Twitter that have been made to prioritise advertisers and revenue over the interests of users
There was always going to be a danger that social media would eat itself, but nobody would have guessed it would start at the heart. Since Facebook’s record IPO in May, one of the biggest in technology, its share price has dropped. Pre-IPO valued at more than $100 billion, the business has since lost more than half of its capitalisation as investors have become less certain of its advertising model against a backdrop of users moving from PCs to smartphones and tablets. So, facing post-IPO monetisation challenges, Facebook has been forced to bring the money in through other means to appease its stakeholders and attempt to restore value for the shareholder.
Having pushed the sheer volume of their users to get IPO, the social networking giant changed its interface in May. The transparency of the platform has been reduced and artificial barriers have been put in place between brands and consumers as a form of revenue generation. The company has launched a scheme whereby brands can pay to promote their posts, ensuring that they will be bumped up and seen by users who Like them. These brands are basically paying for what used to be a given, while Facebook users are no longer getting access to information without bias. The posts that they are getting easy and immediate access to are the ones created by those who have paid for that privilege. There are brands now reporting a reduction in click-throughs by as much as 50 per cent even though their Likes remain plentiful.
Now, Facebook is planning on taking it one step further – and, arguably, a step too far! – as it launches paid posts for ordinary users, as well as business users, in the US. What happens in the US is pretty much guaranteed to be rolled out worldwide, so rest assured these grubby plans for users to practice self-promotion are on their way to our shores. The current price for promoting a post on Facebook has, according to a Facebook spokesman, been set at $7 (£4.30) per post. I can imagine users being tempted to pay this to announce the arrival of a new baby, or an engagement or to show off wedding photos, but not to share their great night out last Saturday or a perfect batch of cakes, fresh from the oven … please, Facebook users, please. I am begging not to be proved wrong!
But then, the whole thing is wrong – and it raises the question, what’s the point of it all? Surely, we have now overshot the original mark and are in danger of leaving what made everything good about this pioneering social networking site behind. Remember, what made Facebook gold dust was that it quite simply put friends in regular or constant contact with friends and friends of friends, enabling them to swap a mix of big stories and everyday life details, share information, gossip and, well, communicate with no outside influence except each other. Now Facebook will control whose posts we get to see and it all comes down to who is prepared to pay for it. Everything has its price, it seems, and Facebook’s day has come.
And then there is Twitter. The turning tides and the big changes afoot in social media are most evident in Twitter: a majority of people consume Twitter via mobile, and that is commonly through a third party app. This has prevented Twitter from presenting paid advertising so, in order to address this, Twitter has changed the rules surrounding its API and has introduced limits restricting third party clients to 100,000 tokens (users). This is bad news for developers and people who have founded their businesses on the Twitter API and now find their business models totally ineffective. The ramification for brands is that they will have fewer tools to use to make use of social media. Add to this promoted tweets and advertising your Twitter stream on the official site and Twitter app and it is most apparent that Twitter is building features for advertisers rather than its users.
There is an alternative out there. Currently in its infancy, so just the domain of tech people like me and other typical early adopters, App.net is a real-time social media feed without the ads. In fact, it has promised upfront never to be advertising-driven. It is paid for by its subscribers, and so it’s built to benefit those subscribers rather than share-holders or advertisers, providing a model at the opposite end of the spectrum to Twitter or Facebook. Whether it will catch on with the masses remains to be seen. Until it attracts a larger user base, it poses no threat to the current social media mainstays.
The routes that Facebook and Twitter have taken are not without their dangers, and the social media giants are risking biting the hands that feed them by pursuing this form of reverse engineering. I mean, it’s not as if they don’t need us anymore. The viral aspect of social media and the constant growth in numbers of its users is what gives it oxygen. They need those numbers not to drop off. The reason there is such an arrogance in the approach to the introduction of the commercial probably lies in the vastness of this very success. Social media users, in the main, are addicts. They can’t get enough of these networks. Use one and, chances are, you also use another.
But what happens when the user catches on to the fact that it’s not about him or her any more? Ultimately, if information from brands that you like is restricted according to whether or not those brands agree a budget to grease the path then it is no longer about the user and giving him or her what she wants to know about nor is it in the original spirit of the social network: easy access to information without restraint. The trailblazers of social media may be giants – but they need to remember one thing, the bigger you are the harder you fall. And as the users came in their droves, so can they depart.