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Facebook's About-Face

Posted on Wednesday, January 31, 2018 at 1:33 PM

It's time to reassess our relationship with the social media behemoth.

By William Dunkerley

Disseminating articles is out. Facilitating social interactions is in. That's the essence of chairman Mark Zuckerberg's recent announcement. In his own words:

"The research shows that when we use social media to connect with people we care about, it can be good for our well-being. We can feel more connected and less lonely, and that correlates with long term measures of happiness and health. On the other hand, passively reading articles or watching videos -- even if they're entertaining or informative -- may not be as good. Based on this, we're making a major change to how we build Facebook. I'm changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions."

That threw some publishers into a tizzy, fretting over what Facebook's repositioning might mean to their businesses. Those who have relied upon Facebook to generate an important amount of online traffic are likely to feel the pinch. Who are they? Stats I've seen mention publications such as Newsweek, PC Magazine, The New Yorker, The Hill, and Chicago Tribune, just to mention a few.

What Facebook's Realignment Means for Publishers

In the news media, phrases like the following are cropping up: "Facebook retreats from publishers" ... "Publishers see the end of Facebook dependence" ... "Publishers on uncertain ground in new Facebook era" ... and "Facebook only cares about Facebook."

Not all publishers rely upon Facebook as a source of readers, however. Many use it as a supplement to a print publication, a platform for building a loyal online community, or a convenient means of getting exposure to potentially new readers.

If your publication's use of Facebook is similar, then you probably won't feel any immediate or significant disadvantage from Facebook's change in course. In the longer term you might, however. Facebook's reorientation is bound to have an untold impact on what users go to Facebook to do. If Zuckerberg is successful, far fewer users will be going to Facebook for a "passive" reading experience.

The looming reinvention of Facebook has prompted many to speculate on how publishers should respond. A plethora of recommendations for how we can mitigate the damage from Facebook's new face is floating around. They include:

--Start an email newsletter.
--Invest in virtual reality.
--Forget about advertising revenue.
--Go for a premium audience.
--Do a better job of collecting email addresses.
--Focus more on metrics.

Some of these ideas have merit, others don't. But before we make decisions about what if anything we should do in response to the Facebook upset, we should take away a couple of lessons from it.

Two Key Lessons

Lesson 1: Be cautious about dependent business relationships.

It should be abundantly clear now that publishers must apply greater scrutiny when contemplating relationships of dependency with outside organizations. That's especially important when ultimate goals and objectives are not closely aligned.

In the print era, publishers certainly had external dependencies on printers, paper manufacturers, fulfillment houses, and delivery services. But these were service providers that depended upon our business. Now in digital publishing we rely upon internet service providers, computer hardware and software suppliers, and search providers. (Unfortunately, their goals are not as closely aligned with ours as in the above print example. Ending net neutrality could exacerbate that problem. But that's a topic for another time.)

I don't think Facebook management has ever thought of itself as a service provider to publishers. Indeed, my reading of the situation is that they have been looking upon publishers as service providers for Facebook. That turns the whole relationship on its head. And the consequence is that when Facebook decides it doesn't need our services as much, it can exploit its dominant position in the relationship. And that can leave publishers out in the cold.

Lesson 2: External entities' needs may not align with your own.

Take a look at Zuckerberg's rationale for his repositioning decision. He pins it on mental health concerns for his audience. He contends that using social media "to connect with people we care about ... can be good for our well-being." In contrast "passively reading articles ... may not be as good." He claims to have come to that realization based on research findings.

I don't know whether or not to take him seriously. It's worth considering that Facebook has taken a lot of political heat for alleged influence it might have had in the widely contested results of the 2016 presidential election.

Is Zuckerberg being bullied out of the business of connecting audiences with articles? Is this mental hygiene explanation just a lot of poppycock for him to save face? I've seen no evidence that's the case. But it's worth considering the possibility.

Nonetheless, it's hard to just take Zuckerberg entirely at his word. Is he really driven by altruistic concern for the long-term happiness and health of his audience? Or is there another explanation? Could it be that people engaging in social interaction are more profitable for Facebook? Are they better receptors for programmatic advertising and thus more instrumental in creating viral buzz for advertisers?

Perhaps my second point is just a variant of the first one: It's risky business when we insert some external entity into the core paradigm of publishing and create a dependency. Often we get so caught up in our issue-to-issue business routine that we give little thought to what that paradigm is.

Focusing on Core Competencies

Indeed, what is the paradigm? I see it as a continuum with advertising revenue at one end and audience revenue at the other. Most publications can be placed somewhere in between. They get revenue from both sources.

The business objective for a purely advertising-driven publication is (1) to develop trustworthy content that (2) will be valued by readers who (3) in turn will become active buyers of products and services that are advertised, and (4) to bring the publication to the attention of those readers on a regular basis.

The business objective of a publication that relies only on readership revenue is (1) to provide scarce but valuable information and/or news and/or strategic advice to readers who (2) are willing to pay a high price, and (3) to do that at a reader acquisition cost that is low enough to enable profitability.

These are our core competencies. Certainly we need outside assistance in performing all the tasks that go into producing those publications. But if we allow ourselves to become dependent upon outsiders whose business objectives are not sufficiently aligned with ours, we are taking a risk.

That's the prime lesson we should learn from Facebook. We'd do better to concentrate on our core competencies.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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