Facebook and Twitter are public companies hungry for ad dollars. In order to capture a chunk of the $66.4 billion spent on TV ads, they will continue to editorialize their (our?) news feeds. They take different approaches to curating their feed. This plays a role in the types of content we consumer and share, and the attractiveness of their platform to the advertisers spending billions on TV ads.
Fortune recently published a interview with Jonah Peretti, founder of BuzzFeed. Peretti and BuzzFeed grok what drives people to share and consume people in today’s much changed media landscape. Peretti’s comments around the difference in the types of content shared on Twitter and Facebook made me think of TV, especially the difference in broadcast and cable TV content. There are analogies to make in how people consume content, how the content is filtered, and where advertisers fit in the picture.
Interest-based vs. mass appeal
Says Peretti -
…Twitter is also much better for interest-based content. So people on Twitter can follow tech if they’re interested in tech, or business if they’re interested in business, or they can follow celebrities that they’re fans of.
This is like cable TV. Interest-based, targeted channels designed with a specific consumer segment in mind. Ads can be sold to advertisers looking to target these segments. With cable TV we have a relatively small world of content compared to Twitter. Barriers to entry keep “amateur” content of cats playing piano off the airwaves.
On Twitter there is no editorial layer – once you’ve selected people to follow, tweets are simply displayed in chronological order. The implicit assumption being that, in the likely case that the user doesn’t have time to read every tweet, the most recent is the most relevant. Fair enough.
…Facebook is much more tied to broad human emotion and things that everyone can relate to, and things that connect people with the people in their lives. It’s not so much about the information in the content; it’s about how that content allows you to connect with other people in your life.
This is like broadcast TV and the mass appeal that it goes for. The content filter is Facebook’s news feed algorithm. Facebook knows that users don’t have time to read every post and in 2006 decided to curate their feed (when News Feed launched).
Facebook the Media Company
This recent piece from AllThingsD provides insight into the two news feed “philosophies” within Facebook -
The overall goal here: Cox and Zuckerberg, the two most vocal proponents of this philosophy, want visiting the site to be a “useful” experience, delivering a well-rounded assortment of content for people across the world, in a tight, well-crafted package.
Comparing Twitter and Facebook, we have two very different approaches to the content consumption experience. Twitter takes a more hands-off approach and says the latest tweet wins, whereas Facebook curates the news feed. Facebook wants to improve experience for their users by making it more “useful”. This could mean favoring content from someone like a NYTimes.com or a Rolling Stone over a BuzzFeed. It depends on what Facebook and their algorithm deems useful. (I expect that there are other, more financially-driven, reasons that Facebook wants to package the news feed differently. More on that later.)
This is a significant shift for Facebook, who prides itself on being a technology company. Being a media company and deciding what content is”useful” will take a culture shift. Is Facebook becoming a media company? (not this again…)
Applying an Editorial Layer
In their heyday, TV executives played a big role in deciding what’s useful. I’m betting ratings were one data point among many. Given that creating the type of content that would see the light of day on TV was expensive, there probably weren’t too many shows to choose from.
Today Facebook and Twitter are our content filters – once they learn more about us, they present us with a personalized stream of content. The change from the TV model is that the experience is customer-driven. Compare this to TV, where a customer subscribes through their local cable provider and accept the bundle of channels that are made available to them.
Facebook and Twitter allow people to define their own “bundles” (maybe Apple TV will let us do that for TV someday). We choose our friends and who to follow, and expect the platform to provide us with a personalized feed whenever we decide to check. There’s no 30 or 60 minute intervals and programs don’t end at sensible times; it’s always on and we tune in when we feel like it.
Over the long term Facebook and Twitter will succeed to the extent they can filter (or curate) content for their users. And not just for their users sake…
What’s Stopping the Free Flow of TV Ad Dollars to Digital?
Advertisers are the ones that pay Facebook and Twitter so they can provide a free service for their users. Then consider that Facebook and Twitter are both reasonably new public companies. Advertiser revenue, and capturing as much of that revenue as possible, is a key strategy for both companies. Both companies are aggressively pursuing the estimated $66.4 billion that will be spent on TV ads in 2013 (eMarketer). Just this morning Facebook announced they’d start showing video ads that will display in users’ news feed. This is a clear attempt at providing a medium similar to TV.
What are the implications of Facebook and Twitter’s content filter strategies on the flow for ad dollars?
One of the obstacles preventing the uninhibited flow of ad dollars from TV is the lack of control today’s platform companies exercise over the content that people consume. Buying an ad on TV comes with a guarantee around the quality of the content the ad will run during. There is truly some horrible TV…but if it got on TV it can’t be that insulting, right? At least it’s easy for an advertisers to tell themselves and their bosses that.
A Facebook feed today is an unknown environment for advertisers. Same with a Twitter feed.
You can expect this to be reflected in their product development and any changes they make to their news feed. This is a key part of the conversation behind the re-packaging of the Facebook News Feed to become more “useful”.
The Uncertain Future
No matter how many targeting options, reports, insights, or page views Facebook and Twitter give advertisers, they don’t control the content their ads will be shown in. My bet is that we’ll see Twitter gradually add an editorial layer to their news feed, just like Facebook did. This is a question both companies will grapple with in the future. It’s the old conundrum in Silicon Valley – are we a media company or a tech company? We built this great product and a strong network of millions of a users who share TONS of content we can sell ads against!
But advertisers have needs, too. The big brands with the REAL ad budgets want to advertise in places where they feel safe knowing that the content their ads will run against meets a certain standard. That’s why they spend so much on TV advertising and will not change. And some people don’t get the lag in the migration of TV ad dollars to digital…
Perhaps Apple TV, with the curated selection of apps, could strike the right balance. Apple is great at understanding the different needs of consumers and content creators – by far the best in the business. But isn’t it ironic that the company creating the best environment for TV advertisers to spend BIG bucks on digital doesn’t make money selling ads? If they do decide to go after TV ad dollars, they’re in a better position than most since they have more control over the content medium.