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By Thomas Baekdal - January 2018

Facebook may not be the Right Market for Publishers, but it is for Facebook

It has been almost a week since Facebook told publishers that they were no longer a key element of its future strategy, and the outburst of articles about this has been ... eh... interesting to read.

There have been some good observations, like when Wolfgang Blau, President of Condé Nast International, wrote about the importance of China for Facebook. That was a great observation.

There was also the very important observation made by Joshua Benton (and others) that people, generally, don't actually use Facebook for news ... and when they do, it's mostly accidental.

About 75 percent of users reporting seeing either just 1 news story in their top 10 News Feed posts or none at all.

But, we have also seen quite a large number of very frustrated people in the media industry, which is understandable. This has led to some very strange articles where the journalists don't seem to be actually looking at any of the trends.

For instance, The Verge wrote that 'Facebook's startling new ambition is to shrink' ... uh... nope. There is absolutely nothing about Facebook's new plans that are about shrinking. It's quite the opposite.

A number of journalists are claiming that Facebook's new plan to favor friends' interactions will increase the problem with fake news. But while this might have been true in the past, this new change is different.

And there have also been journalists/editors saying that Facebook should be required to include news because of their position in the market ... which doesn't really make any sense once you realize what Facebook is about.

So let me offer three different aspects to this story that will encourage you to think about what's happening on Facebook in a different way.

And we will start with this:

The problem is not Facebook, it's consumption

One of the biggest frustrations I have as a media analyst, about how publishers talk about Facebook, is that we focus on the traffic but not the audience.

I'm reminded here of a tweet that Casey Newton posted last week saying this:

He is exactly right about this. Facebook has been pretty big in terms of driving traffic, but it's not very good at driving an audience.

But the problem here isn't really about Facebook, it's about the market that Facebook is in.

Facebook is a channel that people turn to when they have a quick break and just want to see something random. In other words (as I have talked about for about five years), Facebook is in the market for low-intent micro-moments.

We see this very clearly when we compare how people use YouTube with how they use Facebook. On YouTube, you go to your 'subscription page' where you look at what the people you follow have posted ... and then you pick the specific videos that you want to see, which you then watch for maybe 20 minutes at a time.

That's a deep relationship.

On Facebook, because they have filled our NewsFeed with so much extra content, you are forced into a consumption model where you have no way to pick anything... so you just stop doing it.

And because of this, Facebook is extremely 'niche' when it comes to what works and what doesn't work on Facebook.

For instance, business publications learned a long time ago that Facebook is not the platform for them. Because low-intent is the opposite of what a business reader is looking for.

Facebook is also terrible for building up valuable momentum. For instance, you can't use Facebook to teach people anything.

You can do that on YouTube with no problem, in fact, many young people define YouTube as a 'learning channel'. According to Ofcom's 'Children and Parents: Media Use and Attitudes Report', about 40% of all young people use YouTube for watching tutorials, DIYs, walkthroughs and other 'learning' content.

Nobody talks about Facebook that way.

And this is where we come to news, because think about what type of impact this has on news coverage. What type of news consumption do you get when you mix a low-intent micro-moment, with an emphasis on just reacting, and where you can't go deep?

The answer is obvious.

You get exactly the type of outrage-fueled snackable news consumption that we have seen on Facebook for years ... and we get fake news, because there is nothing better for fake news than an environment where people don't have to think and are just reacting emotionally.

This, of course, is not a good thing, and creates a problem for everyone involved. It creates a problem for the media because we have basically created the worst form of news consumption possible. It creates a problem for Facebook's users, because watching all this negative and fake news makes people angry and depressed. And it creates a big problem for Facebook, because it massively changes the mood (as well as a ton of other factors like the problem with expansion in China, regulations in Europe, and constant negative press from the media).

So, how can Facebook fix this?

Well... it could change its entire market and stop being a platform for low-intent micro-moments. But Facebook is way too big to change its market like that, nor would that be very profitable.

Or... it can focus on optimizing its existing market, by making the good parts better and then get rid of the bad parts.

Facebook has chosen option 2 (obviously).

It will now focus on exactly the signals that make micro-moments even better, by adjusting the newsfeed so that it gives a higher rank to friends' interactions, while keeping the focus on giving people a ton of different things to see each day.

At the same time, all those things that don't work, like news (including fake news), business publications, or brands who post things without creating interactions between friends, these things will be ranked lower.

And it's a brilliant decision on Facebook's part. It won't completely solve their problems, but from a business perspective, this will help Facebook make even more money in the future.

As publishers we don't like this, because suddenly this massive distribution channel has shut the door on us... but just stop and think about this.

If you are a news publisher, why would you focus on publishing on a platform that is in the market of low-intent micro-moments?

The problem here isn't really Facebook... it's the market. And you don't want to be in that market anyway.

Sure, it gave us a lot of traffic, but it wasn't valuable traffic. Facebook is, at best, a marketing channel for publishers. But it's not a valuable distribution platform ... and it never was.

This leads us to the second thing that explains why Facebook is doing what it is doing. It's about how it makes money.

Purchase intent is everything for Facebook

One of the things I have noticed that many people in the media industry are not really getting is how important 'purchase intent' has become for Facebook (and every other channel online), and to explain why, we need to talk about brands.

What is it that brands want when they advertise?

The answer is obvious. They want to sell more products. And the way you do this is to combine two critical elements: Exposure and purchase intent.

In the early days of the internet, most tech companies believed that with just enough scale, exposure was all they needed. So Google and Facebook and every other channel optimized for creating massive platforms, by enticing people to use their channels in the simplest way possible.

And for many years this worked. Why advertise in a print magazine where you can reach 100,000 people, when you can advertise on Facebook and reach 10 million ... for basically the same price?

But what has happened over the past several years is that the value of a view has dropped to almost zero. Today we see examples of brands running campaigns online reaching millions of views ... and yet they see no growth in sales.

For instance, last year we heard stories like this: 'P&G Cuts More Than $100 Million in 'Largely Ineffective' Digital Ads'

So, exposure alone doesn't work anymore, and Facebook knows this. So, what it has been doing for a long time now is to optimize more and more for purchase intent.

The first really big change happened a number of years ago when they first started ranking friends and family higher. They did this in part to get brands to buy more advertising because their organic reach was deemphasized, but also to create a more positive advertising environment.

The reason is that purchase intent is made up of two critical factors. One is to reach the right people at the right time, aka ad targeting, which is something they are optimizing for all the time. Here is just one of many examples of things they have done.

But the second part of purchase intent is about optimizing the environment that the audience is in. Essentially, you want to create an environment that is beneficial to brands, a place where people feel positive.

Think about it like this graph:

You have things that help create a positive purchase intent, and you have things that create a negative intent.

So let's put something on this graph.

For instance, fake political news is very good at making people outraged (which drives engagement), but it's not a positive outrage. It's antagonistic, negative, confrontational, it creates problems with harassment and many other issues.

Meanwhile, having friends and family recommend things to each other often has a positive effect.

In other words, we get this:

What you see here is something that social channels are starting to realize. Fake news, viral posts, and other pointless traffic, are very good at driving exposure, but create a terrible environment for positive purchase intent.

And the trend that we are seeing now is that Facebook is starting to focus much more on creating the right environment, rather than just focusing on exposure alone.

So, that's good... right?

Well, yes... kind of. The problem is with news.

Take an article from the Guardian like this one:

Where would you put this on the above graph? Does this article create positive purchase intent, in which people suddenly start to think 'Yes, I should really buy this new snowboard jacket' ...or does it create negative purchase intent in which people just end up getting angry and start to shout at each other?

You see the problem now?

We can all agree that fake news and real news are two very different things, and that fake news should be banned from Facebook. But from an advertising perspective, both fake and real news exist in the same space.

Both are creating an environment that creates negative purchase intent.

This is something I have been talking about for many years now. When we look at the trends and the demands that brands have, purchase intent is becoming an absolutely critical element of the exposure that brands buy... and negative news stories about racist politicians do not create that.

And this is a problem not just on Facebook but everywhere.

What Facebook has now done is essentially to say: 'You know what... news is important, but we don't have the right platform for it and it conflicts with the market Facebook is in... so let's focus on the things that do work. We are not going to remove news from the platform. But we are going to change what type of news and other content people will see the most.'

So news that encourages friends to discuss it positively among themselves will still be ranked higher, while news where you are just reacting to, or yelling at strangers, will be ranked much lower.

From a purely journalistic perspective, we might say that this is bad, but we are completely alone in thinking that, because every person on Facebook will love seeing less news about Trump and other negative things in their NewsFeed.

And for Facebook, doing this is critical to their continued growth. This will help Facebook to earn more money and to grow even faster.

This leads us to the third point...

What will this do to fake news?

Over the past week, I have noticed quite a large number of media people say that Facebook's changes will increase the problem with fake news, because fake news is exactly the kind of thing that ordinary people share.

In other words, the more Facebook focused on 'friends and family' the more fake news will be exposed.

For instance, in a recent article in the The New York Times, they wrote that 'In Some Countries, Facebook's Fiddling Has Magnified Fake News'.

First of all, this is not exactly true.

Every single study we look at about fake news tells us that most people don't actually see it, and that even if they do, their engagement with it is mostly just a reaction.

And in the past where Facebook optimized on engagement alone this was indeed a problem. The more people reacted to something, the more others would see it (even if they weren't following that specific page), and the more it would spread.

Hence, we got more fake news to a point where it got really bad.

So, in the past, this was true. Optimizing for the engagement of friends and family created a number of other problems... one of which was the spread of more fake news.

But this is not what Facebook is saying they will do. Now they will do more than just focus on reactions from friends.

As Campbell Brown, Facebook's head of news partnerships wrote to some of the largest publishers in an email:

Moving forward, we will prioritize posts in News Feed that spark conversations and inspiremeaningful interactions. We will predict which posts people will want to interact with their friends about, and give these posts more weight in ranking. Interactions between people like comments, shares, and messages will be valued more than reactions and likes

Think about what this means.

Facebook will now do three things:

  1. They will focus even more on posts between friends and family (which drives positive purchase intent).
  2. They will look at the depth of those interactions rather than just how people react (which will dramatically reduce exposure to 'outrage-type' fake news articles).
  3. They will also look at the sentiment of those interactions and check whether they inspire meaningful engagement (in other words, when you discuss something negatively, it will rank lower).

I agree that it would be bad if Facebook was only focusing on ranking the NewsFeed based on friends and family. But this is not what Facebook is doing.

By adding these two extra layers, Facebook has the potential to very effectively reduce the problem with fake news by quite a significant amount.

For instance, last year when we heard about how some guys in Macedonia were able to create massive 'fake news factories', the reason this was possible was because Facebook was optimizing solely on people's volume of reactions.

But now this is no longer possible (in theory).

This will, of course, have a potential impact on many other things than just fake news. Take something like harassment or hate speech. As I wrote on Twitter the other day:

The problem generally with fake news, hate speech and harassment is that it's often directed toward people that one is not connected with, so by looking at the comments in relation to connections, Facebook might be able to filter out a lot of it just by doing that.

It won't stop targeted harassment, of course, but it would potentially reduce the effect such an attack has on additional exposure.

The same is true for a lot of viral content. If having a meaningful connection between friends is the key, almost all of those quick 'slide-show type videos' will no longer work (yay!).

This won't solve Facebook's problems completely ... and scammers and bigots will always find other ways to do what they do, but, on the whole, this added layer of complexity in the Facebook algorithm seems like a very good thing.

It's pretty clear that past attempts of preventing fake news didn't work. When Facebook started adding 'fact-checking' to the feed, it had pretty much zero effect (and there were even signs that it made things worse).

This is because you can't fix fake news with fact-checking, and this is true not just on Facebook, but everywhere.

It's also true on newspaper sites. If you post a story that turns out to be wrong, the correction that you post the next day won't have the same effect.

So, the only way to really fix fake news is to stop it from happening, and since Facebook doesn't know whether it is fake or not at the time something is published, they are 'fixing' this by looking at the patterns, checking for outraged engagement often between strangers.

This is what Facebook is now fixing, by looking at friends and family, the depth of the interactions within this group, and the sentiment of what those interactions are about. They are eliminating outrage as a way to drive massive engagement.

Will it work? Eh... I have no idea. But, in theory, it's a very good attempt.

The problem, of course, is that this doesn't just stop fake news, it also stops all the real news that people react to negatively and mostly between strangers. So, news articles that people aren't discussing positively between friends are affected as well.

For instance, if I got to a British newspaper, The Telegraph, one of the top featured stories is this one:

How many friends do you think will be discussing this in a way that is inspiring and meaningful?

Yep... None!

And, yes, this is a problem for publishers.

But Facebook is well aware of this, and they have now made this decision. Which is why they are so strongly telling everyone that our reach and effect on Facebook is going to drop.

A lot of publishers are angry about this, but I'm reminded of something I wrote two years ago when we had a similar discussion about why Facebook was removing some hard-news content that violated its community guidelines.

Back then publishers also demanded that Facebook acted more like a media company ... which is exactly what they did.

As I wrote:

This is the new Facebook.

But... now what?

The question everyone is asking is: What happens now?

Well, first of all, Facebook is not deleting news from Facebook, but they have made it very clear that the 'reach' will drop ... and likely quite substantially.

Even before this change, we saw how Facebook has been moving in this direction for a long time. Here is the latest graph of referral traffic from Parse.ly's network of publishers. And this drop is likely going to get much worse.

I have no idea how much it will drop, but I wouldn't be surprised if it drops to half of where it is today.

But the biggest realization for publishers is that this also means that Facebook is no longer a business and distribution platform, which is specifically going to hurt those publishers who have been 'pivoting to video' in order to define their business around Facebook.

As a media analyst, though, I'm kind of happy about this, because those pivoting to video were chasing the wrong strategy to begin with.

From a trend perspective, Facebook has been trending downwards for the past five years in terms of being a reliable revenue platform for news. Every single thing Facebook has tried with news has failed, so it's surprising that it took this long for many publishers to stop chasing Facebook.

Facebook is still a platform where you can create awareness, as a marketing channel for news. But it's not a revenue model.

And what we need to do now is to start focusing on fixing the real problem, which is how can we create a platform and a form of distribution that fits the market for real news?

Remember what I wrote in the beginning? Facebook is in the market for low-intent micro-moments that encourage people to interact with as many different things as possible without really thinking about each one.

This is not our market.

So, let's build a market that is!

We have already started with subscriptions, newsletters, podcasts, more meaningful advertising models (like ecommerce linked to high-intent sites), and those are going great. But we need more.

We need a place that people turn to when they want to think about and connect with news.

A place that we can 'own'.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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