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Why Facebook Remains an MVP Despite Scandals

Written by: Erik Mansur, VP, Product and Engineering

This is neither a “Facebook is killing modern society” screed nor a full-throated defense of a company that misjudged its power. This is an honest assessment of an ecosystem, a marketplace, a network, and a community. One that I firmly believe will never meet the same fate as its social predecessors, Friendster and MySpace.

Facebook may not be perfect, but Facebook is forever. Here’s why.

How #DeleteFacebook was born

Whether you work within Facebook’s corporate sphere, or you’re an everyday Internet user, you’re probably aware of the recent scandals that have befallen the wizards of Menlo Park. Normally when a large tech company has a public relations explosion, only industry watchers take notice. But as the hits to Facebook kept coming — from Cambridge Analytica to Definers Public Affairs to farcical testimony before Congress —  the general public became intrigued.

Fueled by a mainstream media weary of unrelenting and divisive political coverage, Facebook’s vocal opposition was given an outlet. Republicans and Democrats could find common ground in the desire for privacy and freedom from corporate ownership of personal information. And the much-maligned media could report on Facebook with no need to cover “both sides.” The “#DeleteFacebook” movement was born.

But despite the hashtags, blog posts and socially conscious exposés, Facebook remains nearly indispensable for its users and advertisers. It’s quite literally the “most valuable platform” on the internet — and there’s no real indication this will change.

Free and unique: The Facebook advantage

The average user views Facebook as part of an everyday routine. Facebook check-ins have become as ubiquitous as the morning newspaper to the Baby Boomer generation. And like the local broadsheets of yore, the Facebook news feed allows readers to take the pulse of the outside world.

But unlike their black-inked predecessors, Facebook’s worldview is unique to users: a customized snapshot of what’s happening in one’s life, 24 hours a day, 7 days a week. What Facebook allows its users to do today with a few taps or clicks — maintain contact with hundreds of people, view relevant news stories, sell items via Marketplace — would have been too expensive if not impossible 15 years ago.

Related post: Performance Advertisers Crank Up Spending on Stories Ads

The growth of the internet has allowed the Facebook idea to be a reality. But in terms of the “expense” of this technology, the only way a user “pays” for Facebook is by providing personal data that can be used to tailor advertising. That’s the trade-off that offends the vocal minority. But based on Facebook’s 2.3 billion global monthly active users, a great majority don’t see it as a problem.

Like newspapers, radio, and television, Facebook makes its money through advertising. But Facebook users see ads aligned with their own interests, in contrast with broadcast media’s “spray and pray” method. So not only are the ads more useful and less distracting on Facebook, they’re contained within a content stream that comes at a far lower cost than, say, $120 per year for a newspaper subscription or $120 per month for basic cable TV. Facebook is, and will remain, free.

Online advertising’s ‘creepy’ factor

For the Facebook detractors, the means to that advertising end is the problem: the user-tracking and data collection that the average person is unaware of. Millions of sites on the open web use Facebook’s unified pixel, which identifies the user from being signed in to his or her Facebook account within the same browser. This allows Facebook to create a detailed profile of a person’s behavior that advertisers use to prospect for new business and to retarget website visitors.

The only way a user “pays” for Facebook is by providing personal data that can be used to tailor advertising. That’s the trade-off that offends the vocal minority. But based on Facebook’s 2.3 billion global monthly active users, a great majority don’t see it as a problem.

This isn’t a perfect system. The profile that Facebook creates — and the ability for advertisers to use it for targeting — may cause online users to feel like a brand is following them. Worse, this profile is not updated for all events in a person’s life (only those that occur online), which can lead to some cringe-worthy stories of advertising gone wrong.

But for better or worse, this is how advertising works now. Facebook is far from the only company that uses anonymized online behavioral data to advertise products. Yet there are very few users joining the #DeleteGoogle, #DeleteAmazon or #DeleteTwitter movements. The absence of true internet “unpluggers” indicates that the majority of people are comfortable with the symbiotic consumer/advertising arrangement of Web 2.0.

So, rather than pine for the demise of “intrusive” advertising, users should hold out hope that smart people, machine learning technology, and a renewed focus on customer experience will make the web more palatable, and less “creepy”.

The advertising middle ground

For those still creeped out by the way online advertising works, yet are unwilling to delete social networks, there’s a middle ground. Facebook provides its users with downloadable reports of what data is used by advertisers. It also has easily accessible privacy settings to refine tracking and profile-building. Another option is to simply use Facebook within a private browsing window, or log off Facebook when done with a session. This will help limit the “always on” aspect of the unified pixel tracking users across the internet.

Related post: Facebook Video Ads on a Budget: From Planning to Final Edit

People seem to think that “total freedom from advertising attention” is the default setting for all networks, even though common sense dictates profitability always trumps privacy.

Facebook’s troubles over the past two years prove that, no matter how large a company may be, companies make mistakes. Regardless of whether those transgressions hurt shareholders, the company’s brand, or even the planet Earth, the public will decide if the value a company provides counterbalances its blunders. The fact that Facebook is literally a modern-day American success story — like Ford, Sears, and Amazon — and still maintains the goal of bringing humans closer together, tips the scales in its favor.

A rough year, but revenue still strong

Finally, it’s becoming clear that Facebook has the annual revenue and user loyalty to help weather the storm. Facebook’s third quarter revenue was up 33% year-over-year. The fourth quarter outlook is expected to be similarly rosy.

While the number of daily active users in the U.S. and Canada may have stagnated, 2.3 billion people around the world still believe that Facebook is a valuable place to connect with friends and family, express their opinions, promote a business, and sell items.

It’s important not to trivialize FB’s recent transgressions, but let’s be realistic: one tough year is no match for billions of active users and an army of happy advertisers.

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