Facebook Post

Here’s my first post about Facebook. I’ll do one about Google eventually, too. I want to say up front that this isn’t actually why I’m leaving Facebook, although it is a factor, and I don’t think it’s enough of a reason for other people to leave Facebook, at least for the moment. But I think there is something here to consider when using it.

Facebook is wonderful for a lot of reasons. It’s great for keeping in touch with old friends, which is awesome for me because I really suck at maintaining connections with people. It’s great for sharing photos and events and comments with new friends as well, although it’s got some competition with other services in that realm. And I imagine it would be good for meeting people, although I’m too shy to use it for that much.

However, Facebook isn’t just a neutral platform through which to connect with friends. It’s a for-profit company, owned by people, and (most importantly) supported by advertising revenue. The business model bears some consideration, actually. It’s founded by Harvard College students, famously, who don’t care if they turn a profit or not – they just want to “build something great”. And good for them, since they still haven’t figured out exactly how to make a profit; they instead keep expanding based on investments from venture capital. Such a business model isn’t unheard of, but it should at least set off some warning flags for people who invest in Facebook or use its services.

Crucially, Facebook has decided to make its services free to ordinary people and to raise money from advertising (instead of charging people to join the network, say). It’s obvious why they did this: I don’t think most people, including me, would have joined back in 2004 if we had been forced to pay for it. But now that decision means that Facebook has to make its money from other avenues, and for Internet companies today that means advertising. The business model here is for Facebook to offer marketers the chance to advertise their products to Facebook users; in return the marketers pay Facebook enough fees to keep it in business.

The same system sustains network television, commercial radio, and Google. In each field, the company offers unique access to an audience of interest to marketers: it could be a narrow audience with particular interests (as you’ll see on the Golf Channel or listening to Christian radio) or just a gigantic number of people (such as during the Super Bowl). Right now, Facebook offers primarily just the eyeballs of a huge number of people, but of course the reason it’s so attractive to marketers is that Facebook is a social network.

And this is where my discomfort really begins, at the intersection of marketing and social technology. Before I get to that though, I’ll have to take a brief digression into the field of advertising. Advertising has existed since the first economies at the dawn of civilization, and it definitely isn’t going anywhere. It has become much more successful in recent times, however, and much more scientific. I’ll open the discussion with a quotation from Al Gore’s The Assault on Reason:

When I first ran for Congress in 1976, I never took a poll during the entire campaign. Eight years later, however, when I ran statewide for the U.S. Senate, I did take polls and like most statewide candidates relied more heavily on electronic advertising to deliver my message. I vividly remember a turning point in that Senate campaign when my opponent, a fine public servant named Victor Ashe who has since become a close friend, was narrowing the lead I had in the polls. After a detailed review of all the polling information and careful testing of potential TV commercials, the anticipated response from my opponent’s campaign and the planned response to the response, my advisers made a recommendation and prediction that surprised me with its specificity: “If you run this ad at this many ‘points’ [a measure of the size of the advertising buy], and if Ashe responds as we anticipate, and then we purchase this many points to air our response to his response, the net result after three weeks will be an increase of 8.5% in your lead in the polls.”

I authorized the plan and was astonished when three weeks later my lead had increased by exactly 8.5%. Though pleased, of course, for my own campaign, I had a sense of foreboding for what this revealed about our democracy. Clearly, at least to some degree, the “consent of the governed” was becoming a commodity to be purchased by the highest bidder. To the extent that money and the clever use of electronic mass media could be used to manipulate the outcome of elections, the role of reason began to diminish….

The potential for manipulating mass opinions and feelings initially discovered by commercial advertisers is now being even more aggressively exploited by a new generation of media Machiavellis. The combination of ever more sophisticated public opinion sampling techniques and the increasing use of powerful computers to parse and subdivide the American people according to “psychographic” categories that identify their susceptibility to individually tailored appeals has further magnified the power of propagandistic electronic messaging that has created a harsh new reality for the functioning of our democracy.

The basic complaint is pretty familiar: that as advertising becomes more effective, it crosses a very important line, going from simply informing people of the benefits of a product to psychologically persuading people to do something they ordinarily wouldn’t. Now, dear reader, I’m not saying you (or I) are necessarily persuadable that easily, but studies show that lots of other people certainly are. And the effects of psychological (as opposed to rational) advertising can be incredibly damaging to society.

Mass propaganda examples notwithstanding, the three summaries of studies linked above suggest a key ingredient for truly effective psychological marketing is detailed information about your audience. This should make perfect sense: if you want to exploit a random person’s psychology, the more you know about them, the easier this becomes. There are other ways to do it, such as being incredibly charismatic or having a really powerful message, but if you had those you wouldn’t need to rely on this type of advertising.

Hopefully I have explained everything clearly enough that you can see how this is connecting back to Facebook. We have an Internet company that is running out of money. It makes its living off of advertising to its users. And, the only competitive edge it offers to advertisers is its incredible array of personal data about its users. This set of incentives is a recipe for disaster.

I don’t know exactly what form the disaster will take, but I have some ideas. In the short term, the targeted advertising will become much more prevalent (i.e. if you put “Arrested Development” in your favorite TV shows, you’ll get more ads related to Arrested Development). More alternative ways of delivering advertising to you will emerge, through ill-advised partnering with third-parties, for example. And, as the economy continues to decline and Facebook’s financial situation becomes more dire, they’ll do something really creative and desperate. As I see it, the best-case is that they’ll adopt a fee-based system instead of an advertising model, in which case I’ll shut up and pay. The worst case is something more like this. And if they ever get hacked, all bets are off.

So what’s exactly the problem here? Right now Facebook hasn’t done anything wrong yet, I’m just arguing that they have the motive (financial need), means (personal data), and opportunity (archives of and access to all your personal data) to do something bad (or to allow a hacker to do something really bad). And, unlike Google, their company motto says nothing about not being evil.

Bad joking aside, my basic problem is with giving any entity too much power over people without any checks on that power. Facebook has access not only to your demographic information, favorite movies and books, and list of friends and photos, but also to how often and from which computer you log on to Facebook, what links you follow around the site, and whose profiles you view and for how long. And this information is all linked directly to your specific account; there’s no practical way around this. Right now they use probably less than 1% of this information for their advertising, but they still collect it all (see their privacy policy under The Information We Collect. There’s also that infamous line there about collecting information about you from other sources if they want to as well). This information is a lot of power (and a lot of potential profit). And the only incentive for them not to use it is fear of alienating customers. In the next year or two, as the financial situation worsens, we will see whether Facebook gives into this temptation or not. In the meantime, I guess I would advise people to be very careful about their personal information. Not just the standard media warning to worry about identity theft or employers seeing you drunk, but instead worry about giving it to Facebook. If people are willing to pay hundreds of millions, or even billions, of dollars to get control of this stuff, it’s gotta be worth something, right?