(Opinion) The gossip sphere has recently been brimming over with premature obituaries for social media.
Now that Elon Musk, reputedly the world’s richest man, owns Twitter, he has wasted no time in brutally firing half the overflowing ranks of Twitter executives worldwide.
It doesn’t seem like he had much time to aim before firing.
Fortunately, he only wounded some and is trying to lure them back while mandating that those still employed spend the 40-hour week in the office, not home working.
At the same time, he has been seen on bended knee – not his usual posture – imploring advertisers to return to his social media platform.
Why are they heading for the door? He blames ‘activists’ for turning advertisers’ attention toward greener pastures.
That is somewhat less than half true, and he is not alone.
Platforms that depend on revenue from advertisers’ intent on using their sophisticated algorithms to sort through the awesome data banks to discover your likes and dislikes and then selectively pitch targeted promotions at you are all in trouble.
Part of the problem may be the very ‘free’ speech Musk promises more of in the virtual town square he envisions.
The reason is much simpler than activists.
Free speech has a price, and as we know, like lunches, there is no such thing as free speech. You can do the math on one of those early pocket calculators or just as easily with a pencil and paper.
It’s one thing to be one of the six members of the ‘B’ club, platforms with monthly active users (MAU) counted in the ‘billions’.
But if you can’t economically lead these MAUs into purchase mode for the advertiser’s products, those billions of followers are dead weight on the company’s balance sheet: the more you have, the deader the weight.
The pioneer of data-driven marketing, Lester Wunderman famously observed, “Data is an expense. Knowledge is a bargain”.
If the algorithmic-driven knowledge isn’t ringing the bells of the digital cash registers, the advertisers will disappear like snowflakes in springtime.
Look at it this way: if the platform charges the advertiser X to reach 100,000 selected followers with an advertising message and that message generates sales from 2% or 2,000 of them, each sale costs X divided by 2,000. But if only 1% buy, each sale costs twice as much, X divided by 1,000. It’s easy to blame the media for the shortfall.
Social media presents a puzzling paradox that is likely to worsen its difficulties as time passes.
If there are two things advertisers always want, they are highly visible and cost/effective marketing programs and the lack of any controversy that can drive potential customers away.
In today’s polarized world, that’s a delicate balance. Research has shown conclusively that hate speech, controversy, and outrageous behavior engages followers in the town square.
The recent Kanye West episode of aggressive antisemitism garnered him a lot of visibility but lost him some of his biggest sponsors.
Writing in the NYTimes, the perceptive critic Zeynep Tufekci weighed into the argument, pointing out that; “With advertiser-financed digital media, advertisers are the true customers.”
Since the increased engagement of followers is the gold standard and business objective, which is “often generated with false, inflammatory or tribalizing content proven to travel much more easily on social media,” we are stuck between the proverbial rock and the economic hard place.
It is sure to take all the nonce of our digital zillionaires to stop pushing this water uphill.
One thing is certain. Until the current economic model for social media changes dramatically, Musk and his fellow ‘B’ club buddies will have to aim their weapons carefully at the real problem before firing at random and hoping they hit something.
Unless they do, they’ll have their hands full and their pockets increasingly emptied.
“The idea that advertisers alone will save us from hate speech and the further degradation of digital social media is wishful thinking,” wrote Ms. Tufekci.
“A primarily advertiser-financed site is neither free nor healthy. The reliance on advertising by so much of our digital public sphere — Facebook, YouTube, TikTok, Instagram, and Twitter — has perniciously fueled tribalization, hate speech, and surveillance.”
As an officer of Editora Abril many years ago, I remember with horror, watching as 80% of our magazines’ advertising revenue, which left us, went straight to Google.
While Google had hardly graduated from being a noun to a verb, it was neither, just a nasty and invasive expletive around Abril.
We didn’t blame it on activists. We blamed it fairly on the real thing, the newest, sexiest, and most cost/effective medium, the internet.
Mark Twain commented famously when reading his own obituary in the newspaper, ‘the news of my death has been greatly exaggerated’.
Perhaps that might be applicable to social media.
Elon Musk is unlikely to be caught penniless as a mourner at Twitter’s funeral. But he and other platform entrepreneurs would do well to change their game before facing some new, sexy, and more cost/effective media.
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