Can an ad-free, subscription-based social network exist?
Maybe the idea of an ad-free social media platform isn't pie in the sky. Columnist Patrick Armitage believes customers would be willing to pay for a better online experience.
Is this a crazy idea? Well, I’m just going to get right to it. Why isn’t there an ad-free, subscription-based social media platform out there yet?
Imagine an ad-free experience where your data is private and you’re free to engage with friends, family and co-workers without feeling like every keystroke is being repackaged in a media kit to sell ad space.
This revelation hit me while listening to Freakonomics’ excellent podcast episode: “Is the Internet being ruined?”
Why major news stories appear on Twitter and disappear on Facebook
One of the pivotal moments in the episode revolves around an interview with Zeynep Tufekci, a professor at the University of North Carolina-Chapel Hill. She noted the stark difference between how Facebook and Twitter treated the events in Ferguson, Mo.:
[blockquote]There was all this talk on Twitter about what looked like real police overreaction. Millions of tweets were apparently sent during this day where people were concentrating on what’s going on, and I switched to Facebook in the middle of all of this. And on Facebook, this whole event that had consumed my Twitter feed didn’t exist. Nothing. And then I’d switch back to Twitter and it was the topic. There were so many people talking about it. And I’d go to Facebook and I’d see nothing. [/blockquote]
Algorithms’ influence on advertising
Tufekci concludes that the reason for the different experiences stems from Facebook’s algorithm. The Facebook algorithm’s main purpose is to keep people on Facebook, deliver an ad-friendly experience and presumably, filter any content that would hamper user engagement.
For all Twitter’s problems, it’s perhaps the purest form of social media that currently exists (ads notwithstanding, of course). But Twitter’s inability to generate advertising revenue at a rate satisfactory to Wall Street investors will continue to hurt its PR and stock price.
Consider that 88 percent of Twitter’s revenue and 96 percent of Facebook’s revenue comes from advertising. It doesn’t take a business major to understand where these networks’ priorities lie. Users are merely a means to a profitable end.
Facebook knows that keeping users on its site helps ad revenue, hence the constant changes to its algorithm. In fact, it’s willing to curtail the amount of news and branded content if it means keeping user engagement high.
Users engage with family and friends and post baby pics more than they engage with hard-hitting Ferguson news. If you like baby pics, more baby pics you shall get — or at least that’s how Facebook’s algorithm sees it.
Social network or ad network?
Facebook walks a fine line between acting like a media company making editorial decisions and disavowing its role as a media company. Whatever side of the editorial fence Facebook falls on, its true north will always be ad revenue.
I believe Twitter’s value will always be its ability to deliver news and information faster and more efficiently than any other social network. But how Twitter sees value and how advertisers and Wall Street see Twitter’s value will always be at odds. And that will continue to hurt its success.
Wall Street’s influence on user experience
I’m going to let Tufekci explain (again, on the Freakonomics’ podcast) how these competing priorities hurt our online experience:
[blockquote]Now you have things like Twitter, that create an environment that is not shaped by an algorithm, but they’re under great pressure by Wall Street to turn to a kind of Facebook-algorithmic feed that is designed to make it more advertiser-friendly. Advertisement is a teeny, tiny tiny [sic] slice of human experience, but it’s dominating our online experience. This seems ridiculous to me. And that, I think, has been the internet’s major turning point. Because the dilemma that internet companies faced as they were scaling up was which financing model to choose. And they could either try to charge the user some amount, or you could go with advertisers. They chose the ad financing, which means you have to please Wall Street and advertisers, which means you have to have a certain kind of experience online. So we, as Facebook’s users, may have a moral claim, because it’s our content that makes the place run, but Facebook is responsive, significantly, to its advertisers. Think of all the things that can’t be adequately addressed by a medium that is geared towards advertiser-friendliness.[/blockquote]
Translation: When your first priority is Wall Street, the user suffers. And this has never been more evident than with Twitter and its inability to get its arms around trolls. Right before its IPO, Twitter’s focus strayed from the customer. This excerpt from “A Honeypot for Assholes” quotes a former Twitter employee:
[blockquote]“Leading up to IPO, it was all about revenue growth, from CEO on down,” a former member of Twitter’s product team told BuzzFeed News. “All investments went into revenue, and I know definitely that the consumer product suffered. Forget abuse — I don’t think we did anything with core consumer at that time, and I think that’s somewhat justified if the goal is going public,” the source said.[/blockquote]
Customers, not users
Let’s turn this model on its head. When paying customers take priority over Wall Street, the paradigm shifts. Tufekci again:
[blockquote]At the moment, if I’m using a new service, I’m always looking for ones that have a small fee of some sort. I want to be their customer. I don’t want to be advertised to or my data sold. So I’m trying to find things like that. And we need a new kind of innovation that allows a small amount of payment to be dispersed over the internet, so that they’re not all dependent on the advertising. I know a lot of people want to use sites that are free. And I just want to say, that comes with real costs.[/blockquote]
I believe people are ready to pay for a better online experience. If the product is worth paying for, people will pay for it. I think it’s that simple. Consider Netflix and Spotify: These are but two examples of companies that have proven the exception to the rule that people want everything for free.
I don’t want my clicks and behavior to be used for advertisers anymore. I want to be a customer again.
Creating a marketer/customer relationship instead of an advertiser/user relationship
Remember the good ‘ol days of permission-based marketing? As a customer, you asked for more information from a company and they dutifully sent it. But now, the doors have been completely blown off. Permissions? Pfft.
I’ve already bemoaned the trend of cold lead generation. Marketers have stopped asking for permission and have opted to hit you with a fire hose of unsolicited emails and ads instead.
Online advertising isn’t about who has the best, most useful and relevant content for its customers; it’s about who has the deepest pockets. You want to pay $30/click for PPC and jump to the front of the line? Step right this way.
In an subscription-based ecosystem, the customer can opt-in to receive content from the brands they want. No longer is the system rigged for the advertiser. The customer has control over the brands they follow. A subscription-based network would reward the brands that grow their fans organically. The good news is, when brands create content customers like, customers aren’t shy about following them.
If you’re a brand that’s grown your fan base slowly but surely with great content, but lose mindshare to a company that has deeper pockets and more venture money, that plain sucks. In a subscription-based social network, users become customers, advertisers become marketers, and we all live happily ever after, right?
Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.