The beginning of the end if they're not careful.
Once site users start to be seen as cash cows not members the user experience can take a nosedive.
Now that Facebook is being scrutinised by its new-found shareholders, it really needs people to start clicking on its ads. That's a fact shamelessly highlighted by Mark Zuckerberg's right-hand woman, chief operating officer Sheryl Sandberg, who was speaking to business students at Harvard University this morning. According to …
Is there any time when users of FailBook *haven't* been viewed as cash cows? A lot of the changes that happened as the platform grew were to increase the amount of data you give them and that they can use to sell to aggregators and data brokers.
The difference is now that they'll be held accountable for their revenue stream and I suspect it won't be long before further changes are made to increase the monetisation of their data. Zuck's half-hearted "we screwed up" apology recently (regarding previous privacy failures) didn't strike me as an honest change of direction for the way the company thinks about privacy., especially with the IPO. Shareholders (rather ironically, probably people on the platform) will be demanding a plan to increase revenue per user or decrease costs.
I don't have a failbook account, and I'm not a shareholder. And I don't regret either omission.
As Douglas Rushkoff pointed out quite some time ago,
"Ask yourself who is paying for Facebook. Usually the people who are paying are the customers. Advertisers are the ones who are paying... We are not the customers of Facebook, we are the product."
Good post and spot on.
Like any other Web 2.0 (grr - frikkin´ hate that term) outfit, users are referred to as RGU´s (Revenue Generating Units). Same applies to all of the telcos etc. I have old spreadsheets from my days at some very well known Web and Mobile companies where the RGU moniker is applied, rather than something like Customers, Subscribers or such like. Still, they´re not doing it for the love are they? This is all about making a buck, so no surprise really.
There are other services that only have customers because people like them. Say, for instance, web comics. I've seen more than one web comic author down on his (or her) luck with medical bills or what have you, and his loyal fans actually sent money. no reason other than the fact that they really liked his comic.
On the other hand, there are services that people need, but don't want. If you own a service that everyone wants, fine; people hate facebook, and yet they still have accounts with them, right? To some, it's a necessary evil. They need a facebook account for their job, perhaps. They are locked in to a service that they don't want, but they still need. If facebook died today, there would only be sadness in that everyone would have to learn how to use Google Plus (or whatever), and they lost their scores on MafiaFarm.
The problem is not with thinking of customers as cash cows. The problem is *asking* customers to *be* cash cows. The webcomic author didn't need to ask to get money, because people loved him already. Facebook doing the same? They can expect, at best, a hearty laugh at their expense. People don't love facebook. People use facebook. When the next "best thing" comes along, facebook will be as dead as MySpace.
Can you point a single moment in F***book history (or web 2.0 history for that matter) when users were not perceived as a cash cow and their private life was not perceived as a "monetizable item".
One of the many reasons why I often say that I do not want to even learn what Web 3.0 will be about. My plan to deal with it is to communicate with any Web 3.0 entitiy from a firewalled, fortified and isolated bunker. With machine guns on the physical perimeter and hunter-killer progams on the "logical" one.
"Can you point a single moment in F***book history (or web 2.0 history for that matter) when users were not perceived as a cash cow and their private life was not perceived as a "monetizable item"."
Well, up until now, users have mostly been OFFERED as s monetizable item, i.e. FB has gotten big by the potential others thought they had. Now, with so much investor money flooded in and people expecting to get something in return, FB will be expected to DELIVER on their supposed potential. So yes, people have been the product all along, but now people have handed over money, they may expect that product to be made more use of.
I do not believe the two compare. That was yet another moment for Microsoft to look a bit wobbly. But Microsoft are sufficiently stable to weather the odd wobble because they make numerous products that are certain to be making money in a years time. They have supply contracts and support contracts to ensure it. This gives them a buffer against sudden market changes that Facebook does not have. If I had Microsoft shares, the thing that would be causing me to shit bricks is their having sweaty monkey boy for a CEO.
If the next new hot thing came along tomorrow (I'm obviously not talking Google+ here), Facebooks active user count could drop off a cliff so FBs only product - an advert delivery mechanism - would be seriously devalued. To accept it already needs a bit of help even with 900 million users when the market really doesn't know what to make of your share price... I see comparisons to Ratner but it looks like she got away with it this time.
"Now just configure it to block everything else from Facebook, and you'll really be cooking with fire."
Maybe I'm over the top, but I block those stupid little blue icons that plague all other web sites. I want nothing to do with them.
As for those people who believed that a company that produces and sells nothing is worth billions of dollars, I laugh in their faces. Unfortunately the morons who are in charge of my pension probably invested a bunch in it. And they'll still get their fat bonus.
I don't. I access the site via m.theregister.co.uk
But that is more because with the adverts, it's blatantly obvious to passers-by in the office that I'm reading a website.
The plain layout of the mobile site is perhaps a little less obvious that I'm not doing the work I should be doing. Just need to override the CSS that puts the big splashes of red at the top and bottom and then I can fully pretend I'm busy reading TPS reports....
From home I access the normal site though, so I'm not depriving El Reg of their income too much :)
OK, I'm prepared for the down-votes but...
Hang on, people piss and moan about us taking money away from our favourite sites by blocking the ads with adblock or similar. Fair enough. But I've _never_ ever clicked on an ad on a web site. I don't watch ads on TV. Don't ads make money for the host site via a click-through? If so, what difference does it make whether I've blocked the ads or not? I'm not clicking through. I'll answer my own question: the only difference is I don't get a migraine from all the bloody Flash and animated GIFs.
Yeah thats it in a nutshell.
Facebook, large multinational company, pays there staff alot, large marketing department. WHat do they come up with as a marketing stratergy to push the main selling points of Facebook. Well after much debate of genius minds they come out with: Pleeease!
What next 2013's marketing campaign is what - Pretty Pleeease followed in 2014 by Pretty Pleeease with a cherry ontop and finaly in 2015: You must click on 3 of the 10 adverts to verfiy your identity and login to your Facebook account.
Joke alert, though time may well prove me wrong on this.
There was a report recently that the click-through rate on Failbook ads was significantly lower than from competing ad brokers (e.g. Google). I suspect the conversion rate (people who click through AND buy) is probably also significantly lower, but I can't remember offhand.
ISTR the report commented that he ad relevance on Failbook was lower, despite all their tracking code that is scattered on other websites (that they claim they don't actually track you with). How long until the "like" buttons scattered through the web are secretly used to build better behavioural profiling to increase ad relevance?
I've never seen any data regarding what % of ad clicks actually end up generating revenue, but I suspect it's incredibly low. in my case that would be 0%, I've only ever clicked on ads by accident. I hardly even notice they are there so I'm fairly certain that they have had no influence on my purchasing habits.
Unless I'm rather unusual in my surfing habits then web ads would appear to be greatly over rated.
I am not saying you are wrong, I see about a 0.5% click through rate on my adsense, but how do you suggest a website pay for itself if no one is willing to click on an advert to fund the site?
Most users do not want to pay to access a site, especially a new site trying to establish itself, you might pay for Wall Street Journal Access, but not a new site about cyber security that previously you had not heard off.
If we want "free" content, like the Register, we need to find a way to make sure they can pay for their Journo's and servers and internet bandwidth etc etc
I would be keen to understand what model you would be willing to support, given the fact it is not adverts.
for another credit card. Sorry that's how the world got in to its current economic mess, to much credit.
Perhaps Facebook should do what other sites do and track your interests to provide suitable ads that you might be interested in. Of course I don't click them either so it won't change things but at least I'll be ignoring the things that I might possibly at some point in the future be interested in.
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