Writing in the New York Observer, Trust Me, I'm Lying author Ryan Holiday says that Facebook has deliberately broken its fan-page service so that only a small number of registered fans see status-updates. If "brands, agencies and artists" want to reach all the people who've signed up for status-updates, they have to pay for "sponsored posts." As Holiday notes, this is a large conflict of interest for the service: the worse it works, the more they can charge to fix it.
It’s no conspiracy. Facebook acknowledged it as recently as last week: messages now reach, on average, just 15 percent of an account’s fans. In a wonderful coincidence, Facebook has rolled out a solution for this problem: Pay them for better access.
As their advertising head, Gokul Rajaram, explained, if you want to speak to the other 80 to 85 percent of people who signed up to hear from you, “sponsoring posts is important.”
In other words, through “Sponsored Stories,” brands, agencies and artists are now charged to reach their own fans—the whole reason for having a page—because those pages have suddenly stopped working.
This is a clear conflict of interest. The worse the platform performs, the more advertisers need to use Sponsored Stories. In a way, it means that Facebook is broken, on purpose, in order to extract more money from users. In the case of Sponsored Stories, it has meant raking in nearly $1M a day.
Holiday goes on to point out problems with other services, including Twitter and Craisglist. His focus is on the cost to advertisers, but there's also the cost to users, who believe that they are getting the news they signed up for, and instead are getting the news that a deep-pocketed firm can afford to put before them. For further reading, see Eli Pariser's Filter Bubble.
Broken on Purpose: Why Getting It Wrong Pays More Than Getting It Right
(Image: C&T Program Fan Club Insert, a Creative Commons Attribution (2.0) image from dcmatt's photostream)
Lax enforcement from the SEC has allowed the biggest companies in America — 90 percent of the companies in the S&P 500, led by the faltering energy sector — to ignore the “Generally Accepted Accounting Principles” (GAAP) in presenting their financial information to investors, manufacturing nonexistent profits in quarters where they suffer punishing losses.
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