Solving the facebook problem

Facebook are in the firing line yet again. Several large advertisers are boycotting them for publishing hate speech – these are big names like Unilever, Diageo, Pepsi, Starbucks. It will concern facebook, they will probably dial up their investment still further in an effort to stamp this out and their spokespeople will double down on on their well crafted defence based on that. “We are making every effort we can, it’s a tiny minority but while there is hate in the world there will be hate on facebook” I heard one say today. After all ‘we’re just a platform not a publisher per se’. There is one obvious solution which is to declare them to be a platform that publishes and impose the same kind of legal restrictions that apply to other media platforms/publishers/broadcasters. Admittedly these restrictions are not perfect. They differ from country to country, some are exercised through government watchdogs and others through a licensing system. If we go down this route the licensing option is the most effective – break the rules and you lose your license to trade, it is awarded to someone else. Can this be operated for the web – of course it can. Not every country or territory would sign up but if enough did it would flush out very quickly whether facebook were “doing everything we can”. But I think there is a better solution which takes the advertiser boycott to its logical conclusion. Reduce facebook ad revenue to zero by making it redundant as an advertising platform and forcing it to charge for its service. Facebook generates $70 billion in revenues from advertising and its costs are roughly $46 billion. But of course a great deal of its costs are incurred to generate the ad revenue. How much would they be if they focused purely on running a really good social media platform? Let’s take a stab – half? So how much would they have to generate from user subscriptions? About $7.50 per user per year. At $10 p.a. they’d be making a very decent $7 billion operating profit. It’s not quite as simple as that but the point is valid – there is a different business model available to facebook or other competing social media platforms. The challenge is how to force them to look for it. Well that is simple – take away their data advantage by creating platforms that allow people to transact their own data.

It has been estimated that your personal data – what you like, where you go, what you buy, what you watch/read/listen to etc – just as much as you want to share is worth $7,600 p.a. on average to you. Much more for high nett worth people, less for the less well-off but arguably more important. If you only earn $25,000 a year then an extra $2,500 for your data is very attractive (this has been proved – people in emerging markets and students are far more willing to sell their data or attention or opinions). Facebook’s model is based on them taking the commercial advantage for having thousands upon thousands of data points on you. The technology exists to allow you to cut them out the loop and transact your own data with whosoever you choose for your own gain.

With no – or at least much lower – ad revenue facebook and their ilk would have to find a better business model, one where people only hand over their money if they appreciate both the service and the ethics of the business. Would you renew your subscription for a business that allows hate speech or pushes content to you in irresponsible ways? No need for government intervention or business boycott’s – problem solved by giving people the rights to their own data and the means to transact it however they choose.

Brand Newsrooms

A really interesting read from Taulbee Jackson about the pointlessness of Brand Newsrooms. It caught my eye (in the very excellent Digiday) because I had been taken with this idea ever since Chris Satterthwaite told me about it, which was probably 10 years ago. This was of course well before the Social Media phenomenon. Chris’ idea was that every week stuff happens that brands should react to, latch on to, spin off, in order to keep a consistent brand message fresh and relevant. He used the analogy of the Newsroom, a place where all the brand people and their communications partners should meet to review what they had done, what was going on and what they should do.

Although I have spoken about this to lots of people over the years, as I’m sure has Chris, I wasn’t aware that anybody had actually tried it. So now here is Taulbee’s blog post which implies several people have and that it doesn’t work. You can read the piece but in summary he cites several reasons why it doesn’t work, the first of which is quite controversial – brands are not in the content business and should leave it to the professionals. His other reasons for the foolishness of this model strike me as “been there, tried that” realism. The approval process for brand creative is too cumbersome and consensual (compare that to a hard-assed editor), brands are lousy judges of good content (he thinks these days only the audience is), and overall it implies an agility and speed that brands simply don’t have.

Interestingly he does not mention, at least not explicitly, the main concern that I always had, namely the rigidity of the brand budget and planning cycle. This kind of “fast on your feet, learn quick, fail cheap” culture requires you to be very vague not only about where you will spend your brand budget but when and how much. I reckon you’d need to keep about a quarter unallocated with the flexibility to overspend if you were getting the results. If a story is getting traction and pulling an audience a Newsroom will very rapidly divert a lot of their resource to it. I presume they keep a number of outside broadcast units and journalists on stand-by ready to fly to Korea, Syria or “wherever the story takes us” as CNN boast. Brands are not able to react that way unless they are owner-managed like, say, Virgin (or is the brand Branson?). I suppose that might be what Taulbee means when he says corporate-owned brands have all the flexibility of a three-legged elephant.

Nevertheless, I am left feeling that while he may be right, brands are not good at behaving like a content generating newsroom, they bloody well should be, especially in a social media world. They should be good at earning media through interesting, on-message, content and stunts. They should react to what is happening and what is breaking and, where possible, latch their brand on to this. Brands should be able to keep a big chunk of their budget unallocated – perhaps not unallocated in terms of the brand objectives, which can be set in advance, but to the activity that might best achieve those objectives. There should be consistency of purpose and message but not delivery. And in order to achieve all this they must meet often, grab the insights and learnings and apply them quickly, with a fast and decisive approval process.

Other brands do this – celebrities, sports franchises, news channels, political parties – why not the brands that are supposed to be the epicenter of great marketing? Is not the realization that they can’t the fundamental proof we needed that the traditional brand management model invented by P&G nearly 50 years ago is well and truly buggered?

I think Taulbee Jackson may be right, he speaks with authority, but it is wrong that the idea of a focused but fast-reacting brand newsroom doesn’t work. It should do and I would argue in this digital, technology, rolling global news stories, social media age it has to.