If you have read my posts over the years, you can find plenty of evidence that Facebook has never had a particularly strong understanding of the public sphere. Mark Zuckerberg in particular does not understand communication, from the vitamix theory of the public sphere, inability to understand affect in decision making, intends to stop trying to get people to like the company (is that what they were doing?). At least in the last weeks they seem to be understanding that if their platform is extremely unpleasant you won’t like it.
Facebook is the hero in all this, according to them opposing privacy is all about helping small businesses. So Mark is now going to “inflict pain” on Apple because he is a rough, tough hero stopping that evil Apple from doing what the users want. Melodrama provides surprising conceptual leverage for understanding Facebook: it explains how they dismiss their naivete and how they affirm their hubris. Now the question with Mark Z: does he think he is the hero, the villain, or is he some kind of anti-hero? After all, Facebook is the social network you use because you have to, not because you want to, surely our tech anti-hero would want to make himself clear about what he is going to do to your public sphere.
Why is Facebook Worried?
The reason why Mark is worried is pretty clear: Facebook depends on snooping on you to sell advertisements that would seem to magically find you at the exact moment you are going to buy and thus would solicit your click, Apple is going to stop them. Android will follow shortly. If it follows that highly targeted ads work at all, it would make sense that losing this feature would be a problem.
But here is the tricky thing: I don’t think it matters, and that is even worse.
The dream of the targeted ad is that with enough information, a brand would be able to buy a very narrow slate of advertising intended to nearly target an individual at exactly the right moment. No more big money buys, no more branding, no more paying for some Don Draper character to dream up something magical.
Increasingly the consensus is that these ads are ineffective and that they enable a host of practices that are racist, sexist, and generally make democracy not work. Publics distrust your hyper-targeted ads too, no one is fooled, it is 2021. They can’t even work in the European Union due to the GDPR. So many accounts of the ads lead with: they seem to follow you for months after a major event or purchase. All that time spending all that money advertising at you, for nothing, as they come after you have made the buy.
Defenders of the practice invoke common sense and “real world” claims to massive returns on highly targeted campaigns. This starts to get to the heart of the issue, when folks write these case studies, where are their baselines? At this point, why would you trust a business case study (and you should usually take these with a grain of salt) when there has only been one affinity network firm in this market for nearly a decade?
Why is Facebook so Big?
You can’t test your ad paradigms on multiple sites because they aren’t multiple sites, there is just Facebook. But why? Because we didn’t enforce a suite of important laws of course. At one point there was a procession of affinity based social networks (Friendster, Myspace, Facebook, and a few years later Instagram). The procession was ended by dominance by one firm, after all the value of these networks follows Metcalfe’s law to some degree — a bigger network for the people you want to see is more valuable. A critical mass of family and friends on one platform makes it a lot less likely that you will leave. Once you know the scope of the network around you, such as the presence of family, your behavior changes. To attenuate this, Facebook would intentionally violate your boundary norms with a variety of invasive products. They want you here and engaged if possible, or at least not somewhere else.
Affinity networks are hard to grow. You need users who are central enough to their social networks that other people chose to follow them onto a platform. The tight progression of Friendster, Myspace, and Facebook would suggest that there are real payoffs for the sort of affective work of these platforms. So what would the government do when real competition appeared? Simple, let Facebook buy them, in this case Instagram. IN later years, Snapchat has entered the fray too, but never in a way that would challenge Facebook.
Why would Facebook be allowed to do such a thing? Because it is a brutal and fast moving industry of course. Not so fast, argue Mark Lemley and Andrew McCreary of Stanford University: what Facebook employs is called the Schumpeterian narrative, where dominant tech firms tell the story of competition to justify their anti-competitive behaviors. This is an industry wide discourse. Purchasing many companies long before they can mount a powerful challenge to Facebook, Google, or whatever other company is in play is the scorched earth anti-competitive strategy that is literally the opposite of the Schumpeterian story. The problem is that there is no competition, that whole deal to not compete as these two mega firms concentrated the entire ad market is the ultimate example.
Over the last few months SPACs (special purpose acquisition companies), shell companies with a pile of cash intended to buy a number of other companies to make a new mega company have entered Silicon Valley. After all, Facebook must be buying these companies because they are valuable, right? In truth, Facebook has been walking the aisles of a hardware store with a magnet on a broomstick to pick up loose washers and nuts, these won’t make a wonderful new robot, much to investors chagrin.
So why would it be worse for Facebook if Apple’s change didn’t hurt them?
Because it would prove the anti-trust case. Beyond their agreement, which is illegal per se, it is about as much of a smoking gun as you can get. Facebook is so successful not because they offer a great ad product, but because they offer the only ad product for a large segment of the market. With search being controlled by Google, only temporal networks (Twitter), and what is left of locative (Foursquare is a cool API) remain. Even if the product was substantially de-targeted, they would still be the only game in town. Could it be that buyers might opt to pay less for FB products and do more regular brand building, buying shirts for soccer teams, doing good deeds, putting up billboards and bus ads, and running regular old commercials? Sure. But the online dynamics are locked in.
What is their big plan then? We know that Facebook is helping law enforcement organizations. Advertising has always been a fairly small part of the economy, subtlety influencing you is one thing, much more profitable is surveilling you and helping the authorities manage your freedom. Think of all the other uses of hyper-personal data from monitoring your health history, making insurance judgements, all the way through a custom credit rating product that could finally allow Facebook to become a bank. Not to be too dystopian about this, but the ad market has gone as far as it possibly can. Zuck needs to “inflict pain” because this is the game of the future, a game of power related to the next wave of products that are not nearly so customer friendly. Foursquare is the best example here: they may be a joke in terms of what happens when you get the relationship between your monetization model and user interface backwards, but they are smashing success as an invisible infrastructural backbone firm.
Facebook has a monopoly on ads in the affinity space. Apple’s changes will have little effect on their primary business in ads, it might tarnish some of their mythos, and confirm their monopoly. The real question today: what about all of the non-advertising uses of our data?
Just a little follow-up: Facebook has decided to “inflict some pain” in Australia. Blocking me from sharing some relevant news. Of course, the question of pain is important here, it’s all of us, on a planetary basis who are unable to share Australian news, but is somehow easily folds against pressure when it comes to democracy. If you had any doubts about Zuckerberg’s role in the melodrama, you have your answer.