Facebook too has leveraged the tension between information’s
ever-lower costs and its persistently high value. Its jujitsu move is even
more dramatic than Google’s. Facebook gets its users to create the
content, then it sells that content to advertisers so they can advertise
to the users who made it. It’s not “stealing” our baby pictures and
political rants, but it is extracting billions of dollars from them using
technology and innovation unavailable to us as individuals. That’s
world-class “borrowing.”
Facebook built its foundation on a second lie, repeated thousands
of times in early meetings between Facebook’s army of sales reps and
the world’s largest consumer brands: “Build big communities and you
will own them.” Hundreds of brands invested hundreds of millions on
Facebook to aggregate enormous branded communities hosted by
Facebook. And by urging consumers to “like” their brands, they gave
Facebook an inordinate amount of free advertising. After brands built
this expensive house, and were ready to move in, Facebook barked,
“Just kidding, those fans aren’t really yours; you need to rent them.”
The organic reach of a brand’s content—percentage of posts from a
brand received in a fan’s feed—fell from 100 percent to single digits.
Now, if a brand wants to reach its community, it must advertise on—
that is, pay—Facebook. This is similar to building a house and having
the county inspector show up as you’re putting on the finishing
touches. As she changes the locks she informs you, “You have to rent
this from us.”
A mess of big companies thought they were going to be Facebook
owners and ended up Facebook renters. Nike paid Facebook to build
its community, but now less than 2 percent of Nike’s posts reach that
community—unless, that is, they advertise on Facebook.^11 If Nike
doesn’t like it, tough shit, they can go cry to the community on the
world’s other two-billion-member social network... oh wait. Similar
to someone dating a person much hotter than them, brands
complained and took the abuse.