My teenage son routinely rejects all his father’s friend requests on Facebook.
He’s quite right to defend his privacy. But he’s worrying about the wrong family member. It’s not his Dad he should worry about getting a poke from, but Big Brother.
In this playground popularity game, many “Bruvvas” big and small are now vying for his friendship – or yours and mine. Ranged against Facebook is Google Plus, the fast-growing muscle boy in the school-yard who also wants a piece of our lives.
This social media “beauty contest” may look like innocent playground stuff. But it has unleashed Darwinian forces reminiscent of a war between superpowers. Claims and counter-claims and being bandied about, reinforced by public relations skulduggery akin to daily life at Murdoch’s British newspapers.
Little by little the battle-lines are becoming clear. On one side stands the IT-industrial complex of Microsoft, Facebook and Skype. On the other are Google, youTube and Apple (notice how they sound alike)?
Meanwhile the rest of us are stuck out there in no-man’s land, clutching our family photos, our holiday news, tittle-tattle and our cousin’s baby’s first scribble.
No wonder, then, that a fast-rising tide of anxiety is infecting the community of global social media users. Fear is rapidly forming into a single question: “what are they going to do with all my stuff?”
The grand “monetization moment” is drawing ever nearer, when Facebook will transform itself from a cuddly free social service into a gloves-off marketing database where everyone’s dreams and semi-secrets are up for sale.
Right now the Facebook business model can’t show more than US$800 million in revenues and positive cashflow – a pathetic financial ratio for a business with 750 million customers.
There’s no way they can justify the hyped $100 billion valuation being floated ahead of next year’s stock market IPO on this revenue model. After all, Microsoft’s investment valued the business at $15 billion in 2007. Now, it’s as though some teenage brokers’ analysts broke into Morgan Stanley at night, ransacked former Wall Street diva Mary Meeker‘s old desk and in back of a drawer found a battered tobacco tin with a label marked: “Tech Bubble 2000: strong shit! Not to be tried for another decade.” They snuck off with it for a giggle on the fire escape before coming back to press the big red button in the trading room marked “official market rumour.”
Even if the IPO comes off at a dull 10X earnings multiple, Facebook would still need to extract $13 in revenue from every man, woman and child in the system. Were Mark Zuckerberg to match Google’s current 15X multiple, that still means jacking revenues eightfold to over $8 a head from a system free to users. No banner ads can ever deliver that amount of genuinely US-GAAP audited, SEC-verifiable click-through revenue. (By the way, a now-rehabilitated “Meeker 2.0” predicts global internet ad revenues of $50 billion – and Facebook is hardly getting 20% of that).
So, to avoid the fate of MySpace (bought by Rupert Murdoch for $580 million: just sold for $35 million) Facebook needs your data to grind into vastly increased revenue. No wonder the company is cavalier with privacy settings. Like it or not, your retail behaviour will be monetized as surely as any supermarket loyalty cardholder. With the new Facebook, your memories will be scanned for behaviour patterns, just like a wire basket filled with Bio yoghurt, a six-pack of Diet Coke and a box of cat litter.
Already, salesmen at enterprise resource management software giants Oracle and Salesforce.com are proudly showing their social media trend-tracking systems, now embedded directly into the CRM kernels they sell to multinationals.
This means your individual tweets or postings will be fed straight to marketing staff whose mission is to engage you in their “spheres of influence” by becoming your Facebook friend or getting you to follow them on Twitter. That counts directly towards their bonus.
The algorithms driving such sales-tactics are based on lean maths – one hotel company admitted to me they’d scored just “a handful” of real customers from a 25,000–strong interest group. They need hundreds of millions of users to look Madison Avenue straight in the eye and say “social media sells”.
No wonder then, that Facebook sees Google Plus and its growth pattern as a prima facie threat. If Google is really making these numbers after two weeks with the promise of true user-managed privacy, then the Facebook IPO is walking wounded.
At first blush, Google Plus seems more like life – where social groups live in separate compartments, rather than all the same communal soup (where my son doesn’t want a father meeting his girlfriends. I should point out here that I’m really not like other snooping parents exposed in a survey). In fact Google’s model is all about regaining the old-world search engine primacy it feared to lose with the rise of social media.
So Facebook is fighting back against the Google Plus model. Already it has banned migration from one service to the other.
Facebook also hired heavy-duty PR advisors Burson Marsteller to join battle even before Google Plus launched early July. Mission: spread the word that Google’s privacy settings and its terms and conditions are even more draconian that Facebook’s.
MSNBC (notice how they stick together) posted – and then withdrew – a story alleging that Google’s privacy settings would create a privacy nightmare and potential for massive lawsuits. The blogosphere screamed back:
- “This article screams of PR scaremongering”
- “Wouldn’t be surprised is this was FB’s smear campaign”
Some wag even likened Facebook’s dilemma with Google Plus to the old Hitler movie scene in the Fuhrerbunker.
For the record, Facebook’s user contract says:
For content that is covered by intellectual property rights, like photos and videos (“IP content”), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (“IP License”).
And the Google Plus user contract says:
You give Google a perpetual, irrevocable, worldwide, royalty-free, and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through, the Services.
In plain English that means: “Suckers: your personal lives are now our intellectual property to sell to our marketing customers as we please.”
But are we such suckers? I think not. Yes, celebrities may need to sell their weddings, their divorces, their children and their plastic surgery to Hello! Magazine. But the rest of us don’t.
Once social media channels become marketing channels with daily pestering from “false friends”, how many people will simply say “unfriend”? Social media relies on a binary world of “like/unlike” and users will vote with their feet, whatever the marketers think.
For instance, the CRM systems simply can’t get inside private LinkedIn groups unless a moderator gives them permission. And Google’s segmentation into spheres of friendship provides additional barriers for the web marketers’ crawlers and search bots.
For last century’s technology – phone calls – we screened calls with answering machines. For last decade’s technology – email – we had spam filters cutting out the Nigerian investment opportunities and Russian penis-enlargement invites.
Social media marketing screen-out technologies will soon be here. Just as we avoid acquaintances at weddings who try to borrow money, chat up our wives or do relationship marketing for mobile phone companies, we’ll know who to steer away from.
Money-makers like Farmville? Goes to show how wrong I can be as I’d always considered there really isn’t much to do on Facebook — unless you are a truly sad, friendless person playing Zynga stuff. But once your few friends have zapped you because of this habit, you might wake up and get a life. Yet the new Zynga IPO filing values the business at $15 billion (that’s more than Adobe), with $235 million in quarterly revenue and 88 million active users. So maybe I’m the sad one for not joining. Perhaps the real future of all this will be a low-calorie version of dating sites, as Badoo has cleverly worked out.
If we regular Joes are dazed and confused by the shenanigans in social media-land, then professional communicators must know exactly what’s going on there, right?
Wrong. Communications professionals are even more messed up. So says European Communication Monitor 2011, a new survey of 2,209 corporate professionals from 43 countries sponsored by the European Association of Communications Directors.
The survey found that fully 50.8% of those polled have NO training programmes for social media at their companies, and 48.3% have NO key performance indicators for measuring social web activities.
In terms of social media skills and knowledge, managers reported “moderate” capabilities with no respondent claiming a high score. In fact 5.6% of communications managers NEVER make private use of social media. The only thing they ARE agreed on is that it’s important: 41% say so.
In fact, business is already taking care of itself with a new category called Enterprise Social Networking. For internal communications, corporate communications and the choicer types of networking, business doesn’t want Facebook — and probably not even LinkedIn, which is not quite as business driven as it looks. If, like me, you’ve been pestered by calls to join business networking groups on Facebook like Branch Out, you’ll be wondering what these can do for your EBITDA.
So private networks like Yammer, SocialCast, SocialText and Jive are expanding rapidly. Yammer has just opened a European HQ in London. Santander, IBM, Pepsi all have enterprise social networks operating outside the Facebook-Google axis. As I posted recently in Crowdsourcing the Authentic Story, business is using these tools for mass corporate storytelling.
Anyway, what are the communications professionals – let’s call them the school seniors – gossiping about in the public social media schoolyard where my son and others also play?
In late June, I went to the European Association of Communications Directors conference in Brussels to find out.
Keynote speaker Geert Lovink of the University of Amsterdam believes “the days of Facebook and Twitter are slowly going to be over.”
His academic narrative points to an Atlantic split over social media. While American evangelists naively accept the consolidation of this new prairie under the rule of Silicon Valley’s cattle barons, Europeans are fighting back. Certainly, almost all critical writers and thinkers publishing in this field are not American: Bernard Stiegler, Nicholas G Carr, Sherry Turkle, Franco Beardi, Jaron Lanier, Eli Pariser and Siva Vaidhyanathan.
Perhaps he’s an idealist, but Lovink told representatives of the largest corporations in Europe he believes in the ‘little guy fights back’ scenario. “Before long distributed alternatives to Facebook will incorporate all your networks,” he says. The mantra is “software YOU can control.” But the alternative services Lovink lauds are still not much more than beta-tests and Facebook/Google have a marathon-sized headstart.
For over a decade, news organisations have been famously wrong-footed by social media. Only now are they accepting that reporters must use these channels for crowd-sourcing. So Sophie Brendel, head of digital engagement at the BBC, told the Brussels conference “journalists now take their stories and their steer from social media.” But, warned Brendel: “anyone claiming to be a guru on social media is not telling you the truth.”
The Economist takes a more historic view. In a special survey on the news industry, it presents that case that things have gone full circle. Newspapers originally emerged from the pamphlets and the gossip that circulated in early coffee houses where news as market intelligence circulated as a primeval form of social media. Now we’re back where things started.
Objectivity is now out and strong opinions are back in. The age of monopoly of newspapers and advertising is giving way to the “digital coffee house” where the pamphleteers of yesterday such as John Locke, Tom Paine and Benjamin Franklin, have become the bloggers and tweeters of today.
But The Economist might have finished the job properly and told us what we all need to know. Social media in a corporate context is an excellent tool for reputation management, but marketing will kill it. Social media can help enhance brands, interact with potential customers, pass word of mouth and create ‘net promoters’ by the million. It will tell the story, but it won’t close the sale.
If newspapers have gone back to pamphlets, then maybe the internet is heading right back to Web 1.0. Perhaps its time to wake up and see that monetizing Web 2.0 through social media was just another fantasy of the “2000 tech bubble” variety.
In fact the social media barons could be beating their heads against the very same rock that’s confounded newspaper owners for a decade: you can’t make lasting money out of social media by continuously milking happy customers who stay willingly inside the pen. One-time ripoffs yes, but sustainability?
All of which goes to show: retail or wholesale, personal or business, it’s clear there’s no real clarity on social media. Is it a huge commercial battleground, or a will o’ the wisp devouring untold amounts of time, energy and enthusiasm?
So let’s use the language of today’s purely binary world:
- Like social media for brand positioning, reputation management and image presentation: above all for developing the corporate story day by day, tweet after tweet.
- Unlike social media for marketing and commercial exploitation.
- Friend social enterprise networking. Corpcomms outreach, brand equity projects, storytelling, experiences.
- Unfriend hardcore marketeers, monetizers, CRM geeks, optimizers.
So back off please “Bruvvas” — one poke too many from you and I’m off to web 2.0 suicide machine, the digital equivalent of the Dignitas clinic in Switzerland.