Just a month ago, Meta, the company owning Facebook, announced a massive lay-off of 11,000 employees. Major inflection points cause tectonic shifts in institutions and the environment, and the consequences can be swift.
Facebook’s current troubles illustrate this principle.
In my 2018 book, Seeing Around Corners, I had predicted that Facebook was overdue for a reckoning. “The business model underlying this vast revenue source is completely opaque to many who, the data brokers argue, willingly give up their information to obtain the benefits of using these platforms for free. Most of us, however, are oblivious to the specifics of how our most personal data is being used in ways that never were economically or physically feasible before the digital revolution.”
Just logging on to the internet creates a digital footprint that tells interested parties about your online behaviour. While users are dimly aware that websites track them using cookies, what many are not aware of is what are called third-party cookies.
For instance, if you logged onto a news site and that site has a Facebook ‘like’ button on it, a cookie is placed on your computer that Facebook can access. Even if you have never visited Facebook or don’t have an account, the social network still receives information about what you’ve been doing on the web.
So much for all those folks who say, “I don’t have a Facebook account, why should I worry about the network having my data.”
From its founding in 2004, Meta’s growth has been exponential. Its attitude toward its use of personal data, however, has not changed much since its founding. Its blind spot was failing to recognize that eventually the public, regulators, competitors and others could catch on to what the social network was doing.
Always late in catch up
The business practices of data mongers far exceeded regulators’ ability to understand and deal with the implications. For a while, all the social media companies that use targeting to derive profits from ads benefitted from the fact that the general public had no idea how pervasive the tracking was.
Others too had expressed dismay at how large tech firms manipulate factors such as choice architecture to mislead us into giving them permission to use information about us any way they choose.
Ex-Meta associates have also taken issue with the societal effects of the platform, bemoaning the addictive nature of what Facebook created. The documentary ‘The Social Dilemma’ provides a behind-the-scenes look at how social networks are programmed to hijack human emotions and get them to pay attention to what they are offering, to the exclusion of all else.
Apple spoils the data party
Some ex-techies have gone beyond issuing verbal critiques. The Center for Humane Technology, was founded by former employees of Google and Facebook, is trying to create a unified institutional response to what they see as the consequences of social media addiction.
Despite all the calls for the pervasive and unwelcome tracking to stop, nothing really changed. That is, until Apple decided to get involved. Since Apple doesn’t make its money with ad-supported revenue, it has no reason to allow others to benefit by tracking its users.
In one fell swoop, in 2021, Apple introduced App Tracking Transparency (ATT), a non-optional code that any developer who wants to sell in iOS is required to use.
As it turned out, iOS users didn’t much like being monitored – Only 16 per cent gave Meta’s apps permission to track them. Consequently, Facebook and Instagram ads had a harder time finding receptive eyes, and for businesses, the ad spend needed to find new customers on the platform shot way up. Meta’s ad revenue growth began declining the very quarter Apple implemented ATT.
It appears that the Metaverse concept that Zuckerberg has invested heavily in shows no sign of maturing any time soon. And no amount of wishing will make it so, unless the trust is back in customers’ minds for addressing their real pain-points.
The Metaverse in many forms already exists. There are lots of applications in which digital technologies and humans interact to do things that were never done before. Like in education, surgery, emergency medicine, solar tower maintenance, etc.
What happens next?
The research on companies that experience a growth stall is not encouraging. What’s often needed is a change in senior leadership, a change in business model, or some other kind of major transformation. Here’s the problem with Meta.
As Jeff Pfeffer shows, powerful people can act to consolidate their power. Zuckerberg can’t be fired. Not by anyone. He’s unlikely to be giving a lot of time to those who challenge his Metaverse optimism. People trying to advise him to shift direction are not being welcomed.
We would put Facebook somewhere around where Blackberry was in 2011 – still relevant, still powerful, still incredibly rich, but absent some significant strategic shift, likely to evolve to be a shadow of its former self. Time, of course, will tell.