The Facebook conundrum
Old media covets FB’s IPO billions and social media envies the old’s content. Michael Wolff writes.india Updated: May 16, 2012 22:26 IST
What is social media — I mean, as opposed to plain old media?
That’s the unexamined question that will only become more pressing — and less clear — when Facebook shortly completes its IPO, with more and more people in plain old media feeling they ought to be in social media. And with more and more people in social media feeling it is the future of media.
As it happens, the dual media have nothing in common except that they both occupy people’s time and are supported by advertising. On the other hand, both try to pretend they can be like the other.
Right now, the indisputable point is that old media, even as it loses its claim on people’s time, continues to attract a larger, and increasingly disproportionate share, of advertising money, just as social media becomes increasingly dependent on them. Facebook’s 82% revenues come from advertising — a much higher percentage even than that of old media.
The television upfront season, wherein advertisers bid for space in the upcoming television year, is expected once again to make the point that when it comes to paying real money, advertisers pay it to TV. At the same time, this is confusing because brands and advertising agencies talk about their commitment to, and hopes for, social media.
But it is curious that of the many loquacious, self-dramatising, and overly social people at Harvard who were destined for the media business, Mark Zuckerberg was not one of them. He was their opposite, not only in terms of personality, but in terms of worldview. They wanted to hold power over their audience; Zuckerberg wanted to empower an audience. But awkwardly, social media still depends on advertising which, fundamentally, depends on a set of top-down manipulations that control what audience thinks and feels at a given moment.
Still, advertising is a supple, price-related form. One of the most successful forms of advertising ever is the yellow pages: its costs are low enough to make its relative lack of effectiveness still worthwhile to the advertiser, and there are enough advertisers, and yellow pages are profitable for the publisher, too. That’s the Google model.
And that’s the current Facebook model. It has so many eyeballs that it can sell them for next to nothing and because it doesn’t pay anything for creating the content that the eyeballs are seeing, it’s been able to generate some nice numbers. But its $100 billion-plus valuation vastly exceeds the value of its relatively low value ads, meaning it really has to become much more like television than like Google.
Except that it isn’t TV. It doesn’t really have an audience — that is, people thinking and feeling something similar. And it isn’t run by people who even care about media — or doing what media does: that is, holding people’s attention by means of pain, or charm, or jokes.
Of course, the future is coming and we have somehow convinced ourselves that forward-thinking technology companies, by learning so much more about people’s behaviour and habits and knowing more about them than they do themselves, will somehow, with undreamed-of efficiency, sell them something. And these social media savants will be able to do this without having to rely on the much more mysterious and hit-and-miss process of producing good stories.
Perhaps. Just don’t call it media.