{"id":1030,"date":"2017-05-30T08:40:41","date_gmt":"2017-05-29T19:40:41","guid":{"rendered":"http:\/\/www.rogerdennis.com\/ideaport\/?p=1030"},"modified":"2017-06-16T08:41:02","modified_gmt":"2017-06-15T19:41:02","slug":"nbr-column-why-you-need-to-understand-facebook","status":"publish","type":"post","link":"http:\/\/www.rogerdennis.com\/ideaport\/?p=1030","title":{"rendered":"NBR Column – Why you need to understand Facebook"},"content":{"rendered":"
\n
\n
\n

Here’s the full text of my latest NBR column<\/a>:<\/p>\n

You might have seen the movie, you might already pay the company for advertising or you might simply be a user.\u00a0No matter how you interact with Facebook, it\u2019s arguably the one piece of software that everyone online today should understand in detail.<\/p>\n

The company was started by Mark Zuckerberg in 2004 as a small business in a university dorm room in the US.\u00a0The premise was simple \u2013 it was a method for people to update their social life on the internet so their friends could see what they were doing.<\/p>\n

From this humble beginning the business has now grown to the point where it is regularly used by\u00a0<\/a>1.8 billion people<\/a>, including almost\u00a080% of all American adults<\/a>.<\/p>\n

The company now offers a range of compelling ways of keeping in touch with people including the capability to upload live video, send instant messages, and call friends free around the world (no-cost international phone calls).\u00a0This last point is particularly relevant, as it raises the question of how it can offer these services to billions of people without the need to charge a subscription.<\/p>\n

Facebook can offer these services free because it also shows advertisements \u2013 a lot of advertisements.\u00a0 Last year the company made $US10.2\u00a0billion, primarily from advertising revenue.<\/p>\n

Advertisers are attracted to Facebook because the average user spends almost an hour a day<\/a> on the site, and the more time people spend on the site, the more advertisements Facebook can sneak in front of people.\u00a0The company is showing more advertisements<\/a> to users than it used to.<\/p>\n

Checking for updates<\/strong>
\nTo ensure people keep looking at Facebook, the company spends a lot of money<\/a> working out how to make sure users constantly check the site for updates. The updates they\u2019re viewing are not simply about their friends\u00a0but also advertisements and information from commercial organisations including news outlets. Facebook offers people the opportunity to give their feedback on this information by clicking an icon titled \u2018like.\u2019\u00a0It\u2019s important to note that there is no icon to \u2018unlike\u2019 something.<\/p>\n

The updates are viewed in a user’s \u2018news feed.\u2019\u00a0 Bear in mind that the news feed may contain what used to be known as news\u00a0but is more likely to contain a mix of content, some of which might be from reputable media outlets. Almost any organisation can pay for updates that then appear in users’ news feeds.\u00a0These updates may or may not look like advertisements.<\/p>\n

Once users start to \u2018like\u2019 information in their news feed, detailed personal data starts to be created.\u00a0Research has found that after a Facebook user clicks \u2018like\u2019 on 70 updates, the company knows more about that person<\/a> than their friends. Once they get past 170 likes, Facebook knows a user better than their parents.<\/p>\n

Knowing users at this level allows Facebook to tailor the information it delivers to each user so they spend more time on the site.\u00a0\u00a0The company runs massive social experiments<\/a> involving hundreds of thousands of users\u00a0to understand how to manipulate information to boost time on the site and, in turn, boost advertising revenue.<\/p>\n

One of the results of this strategy is Facebook users only see information that reflects what they like, because to view information that conflicts with their world view would run the risk that they spend less time on the site.<\/p>\n

Shaping public opinion<\/strong>
\nAnother result is that Facebook is now such a compelling way to spend \u2018free\u2019 time that over\u00a060% of millennials<\/a> get their political news from their Facebook news feed. At first glance this might not seem important\u00a0but it\u2019s critical to understand the role of technology in shaping public opinion in today\u2019s world.<\/p>\n

To illustrate this, consider the curious example of the UK technology entrepreneur and commentator Tom Steinberg. He\u00a0was against the UK leaving the EU, and his Facebook information feeds reflected his preference for this. What this meant was that the day after the result of the referendum, he could not find a single person<\/a> celebrating the Brexit victory on the site.<\/p>\n

Bear in mind that Steinberg is very internet literate<\/a>, and should have been able to find at least one person in his Facebook network from the 33 million people who voted to leave the EU.\u00a0 However, as he supported the other side of the vote, Facebook filtered his information feed so it only reflected his own world view.<\/p>\n

The implications of this start to get complex, so to recap:<\/p>\n

    \n
  1. Facebook needs people to spend time using its software, so it can sell more advertising and generate larger profits.<\/li>\n
  2. To achieve this, it uses psychological research to encourage people to return to the site many times a day.<\/li>\n
  3. It also manipulates the information you see so it reflects your world views, which in turn makes you more likely to \u2013 you guessed it \u2013 spend more time on Facebook.<\/li>\n
  4. The more time you spend on Facebook, the more likely you are to \u2018like\u2019 information updates, which then gives the company feedback that allows it to legitimately say that it knows billions of users better than their parents know them.<\/li>\n<\/ol>\n

    Political business model<\/strong>
    \nAt this point you may think that this isn\u2019t really a significant issue\u00a0because, after all, it\u2019s only Facebook.\u00a0 However, the influence of the company now extends well beyond influencing the virtual world\u00a0and is having a real impact on the physical world.<\/p>\n

    Facebook recognises the influence it now can exert\u00a0and this translates into new business models.\u00a0 One of these models is focused on politics, as it points out on its own website where it gives the example of how Facebook was a crucial tool<\/a> in the election of a senator in the US.<\/p>\n

    On its site, there is a quote from one of the leaders of this campaign which states: \u201cFacebook really helped us cut through the clutter and reach the right voters with the message that matters most to them. In a close race, this was crucially important.\u201d<\/p>\n

    The key phrase here is \u201cthe message that matters the most to them.\u201d Now recall the point that over 60% of millennials get their political view of the world via Facebook. When you combine these two points, Facebook makes it possible to target voters with the \u2018right message\u2019 in a way that simply hasn\u2019t been possible in history.<\/p>\n

    Granted that there\u2019s a rich history of politicians manipulating the media\u00a0but the reach of Facebook makes the power of the software unprecedented.\u00a0 To put this in a local\u00a0perspective, research in 2015 revealed more than two million New Zealanders<\/a> use the software every day.<\/p>\n

    Suppressing the news<\/strong>
    \nConsider a scenario where     Facebook itself wants to influence an election<\/a> \u2013 perhaps opposing a candidate who favours regulation that limits the influence of the company.\u00a0 It would be remarkably easy for the company to suppress news and support for that candidate, without people even knowing it was doing so.<\/p>\n

    So what does this mean for the average Facebook user?<\/p>\n

    Next time you check your Facebook feed, consider what information you\u2019re giving to Facebook, and how it might be used.\u00a0 People freely give the company deeply personal information, and the power of that data gives the company both enormous profit and enormous influence. Most of the media headlines about Facebook focus on the former.<\/p>\n

    For most active Facebook users, the closest real-world analogy to the software would be a casino where it\u2019s free to play and your payout isn\u2019t cash\u00a0but information that makes you feel good about yourself.\u00a0 For Facebook, the result is the same as a casino \u2013 a license to print money.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

    \n
    \n
    \n

    \u00a0<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Here’s the full text of my latest NBR column: You might have seen the movie, you might already pay the company for advertising or you might simply be a user.\u00a0No matter how you interact with Facebook, it\u2019s arguably the one piece of software that everyone online today should understand in detail. The company was started […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-1030","post","type-post","status-publish","format-standard","hentry","category-emerging-technology"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/posts\/1030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1030"}],"version-history":[{"count":1,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/posts\/1030\/revisions"}],"predecessor-version":[{"id":1031,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=\/wp\/v2\/posts\/1030\/revisions\/1031"}],"wp:attachment":[{"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1030"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.rogerdennis.com\/ideaport\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}