04. The invisible third party – the business model

We are not a company that is designed to make money. We are a company that is designed to create communities and let those communities make a difference in this world.

Kyle McGinn, produkt manager at Facebook UK

Today, social media operators are the largest and most successful companies in the world. Facebook, for example, has a current market value of US$512 billion (as of May 2018) – an obviously ingenious business model that gives its users free access but generates its revenue from third-party advertising.

A fatal misconception here is that platform users see themselves as customers. The customer is the one who pays – and that is only the advertisers who pay a lot of money to place ads on social media. They are very active there because nowhere else can they find more potential customers: Facebook currently has over 2.7 billion users worldwide – that is almost a third of the entire world population.

Why are social media platforms so popular?

Because apart from free access, they primarily satisfy basic human needs for recognition and belonging. These go far beyond the social component. In fact, they are “first aid” for insidiously negative feelings such as boredom, indecision, frustration and loneliness. Since these platforms are always available, they seem to satisfy any kind of need in an easy and fun way.

The attention of social media platform users thus becomes a valuable product around which all the efforts of platform operators and their customers revolve.

From a marketing perspective, it is therefore understandable when companies such as Facebook do everything they can to develop tools that capture the user’s attention for as long as possible and entice them to return to Facebook again and again.

An all-round feel-good package is put together for him with ever newer features and gimmicks, such as messenger services, news tickers, etc., so that he doesn’t really need anything else to be happy. And while he spends his valuable time there, he is unconsciously enveloped in a filter bubble that no longer has anything to do with actual reality.

The illusion of choice

To achieve this, algorithms analyse users’ preferences and provide content specifically tailored to their interest. One resulting tool is, for example, the auto-play button on Youtube, which automatically plays any other video with similar content after a video ends, or the pull-to-refresh function, which constantly loads new content when scrolling down, thus making it impossible to see the end of the page.

The “Like” button is another such tool that has a magical effect on self-esteem and has far-reaching consequences.

The social media operators’ assertion that they are on the side of the users sounds cynical and contrived in view of the business model explained. After all, social media users are nothing more than test objects of the “greatest anthropological experiment of the 21st century”, and indirectly contribute to the fact that algorithms are getting better and better at understanding what makes us “tick” through Deep Learning.

As explained in the previous chapter, personalising content is also beneficial. However, it becomes critical when it comes to changing the opinion and thus the behaviour of the user in a targeted way.

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It is very common, […] for humans to develop things with the best of intentions and for them to have unintended, negative consequences.

Justin Rosenstein, former employee at Facebook and inventor of the “Like” button

Recommendations:

Wie Sie Produkte erschaffen, die süchtig machen von Nir Eyal (Buch)

How the Apps You Use Impact Your Daily Life and Emotions von Ariana Battle und Khalil Grell (Artikel)

Inside the Social Network (BBC-Dokumentation)


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