Does Facebook Have a Future?

Image: Business Insider

“Zuckerberg: Yeah so if you ever need info about anyone at Harvard

Zuckerberg: Just ask.

Zuckerberg: I have over 4,000 emails, pictures, addresses, SNS

[Redacted Friend’s Name]: What? How’d you manage that one?

Zuckerberg: People just submitted it.

Zuckerberg: I don’t know why.

Zuckerberg: They “trust me”

Zuckerberg: Dumb f — — s”.

The above conversation is one of many emails Mark Zuckerberg sent out when he was starting out his company “the Facebook.

What started off as a university dorm room experiment is now ready for a coveted leap — turning into a self-proclaimed “fifth estate” revolutionizing the social media scene.

Sites like hi5 have seized to exist ever since “Facebook” entered the scene.

However, with its growing popularity, Facebook has in the past and even now been at the receiving end of backlashes several times. Its string of controversies date back years, and involve violations of user privacy, promoting objectionable content along with the occasional misinformation; yet, it continues to grow its massive rolodex of advertisers whose funds continue to power the company’s earnings year-on-year.

The sheer scale and prominence of the recent “boycott Facebook” frenzy which emerged earlier during July this year had forced Facebook to finally reckon with issues and policies that have been scrutinized by both the public and lawmakers for years.

But the damage to the company, while certainly not fatal, may, at last, prove irreparable.

Earlier in July, Facebook was bleeding in terms of revenue as a growing list of companies like Coca-Cola issued warnings about backing out of advertisement and sponsorship campaigns.

They were threatening Facebook about how they would stop advertising on the platform as part of a ‘boycott campaign’ over the social media giant’s handling of political misinformation and hate speech, and its permissive stance on the now-former US President, Donald Trump.

This recent campaign is the most forceful and coordinated repudiation of Facebook to date, borne out of the intersection of two trends: Companies that cater to a younger customer base, most of which are eager to publicly position themselves as supporters of social justice reforms like the LGBT rights and Black Lives Matter.

A week into the boycott campaign, MarketWatch had speculated on the benefits for the corporations, which had taken on the monster entity Facebook at this time.

“There is a perfect storm of corporate responsibility during coronavirus and Black Lives Matter, and a need to contain costs during a recession,” John Marcinuk, head of marketing at Blue Fountain Media, told the site. “Whether you’re spending a dime or $20 million on a platform if you have a stand to take, now is the time to do it.”

Image: Thought Catalog from Pexels

Facebook is not so young anymore

At the same time, Facebook has finally shed its pro-feminist status. As it has aged, newer social media sites have peeled away younger people amid mounting controversies, and its image has reportedly been increasingly tarnished by how people use — and are allowed to use — the platform.

While it continues to be the ‘most-used social media platform’ with around 2 billion users globally, surveys have documented the flattening of Facebook’s growth curve, as it now loses market share, particularly amongst the younger US demographic that has been crucial to its growth thus far.

Newer and more fashionable sites like Instagram (which is now also owned by Facebook) and TikTok are gaining traction.

According to a 2019 study conducted by Edison Research, the platform lost around 15 million users between 2017 and 2019.

“The survey didn’t specifically ask: ‘Why are you using Facebook less?’ or ‘Why have you stopped using Facebook?’ among those who say that they have. There’s tons of other information out there.”

Edison’s President Larry Rosin had shared: “There’s conjecture that Facebook has become more popular among older people, and whether that’s affected younger people.”

Like it or not, making its public image controversial was a result of a series of missteps that were, at least in part, their own making.

The site will forever be connected with the “Russian campaign” to spread misinformation during the 2016 U.S presidential elections, which prompted a larger cultural examination of the power of social media.

Although its initial dismissal of the scheme when it was exposed, lead the company into a costly battle with both the public and the judicial system, those who have since called to break up the company amid investigations by the Justice Department and Congress haven’t had much success with breaking up the big four thus far.

Mark Zuckerberg, Facebook’s founder, and CEO, has been hauled in front of lawmakers several times in the last few years and has been questioned during a series of appearances regarding controversies, policies, and privacy threats, including the platform’s involvement in and its effect on elections and voting.

His last appearance addressed anti-trust issues before the US House Judiciary Committee earlier in August, and although most of his replies weren’t deemed to be satisfactory, the company has since rebounded in the recent quarter.

The company’s failure to protect millions of users’ private data from a third-party collection by political consulting firm Cambridge Analytica in 2018 soured many users. The site that same year took high-profile criticism over the presentation of its trending topics section, which at times featured posts from questionable sources and forced it to re-imagine how it was handling the news.

However, underlying that controversy was a neutral stance the company adopted in its approach to political content, in part because leaders reportedly felt that the removal of right-wing messages that accounted for much of the objectionable material would make this appear as if Facebook was disproportionately targeting Republican posts.

The ‘Hands-off’ Approach

Despite employing legions of content moderators, Facebook has taken a largely hands-off approach to moderation, particularly when it comes to political speech.

Its fact-checking on political advertisements and posts are subpar, which caused the regular users to suffer while prominent politicians continue reaping benefits from a suboptimal standpoint. This was also an issue heading into the 2020 elections whereby Democrats believed that Facebook was altering the balance in favor of the Republicans by allowing such “misinformation” to spread like wildfire.

During an appearance last year, Mark Zuckerberg reiterated the company’s commitment to “free expression” and called the platform’s services a “fifth estate” that allows individuals to share their views.

The decision had the effect of heightening an association in the public eye between Facebook and right-wing causes.

Obviously, that had led to attacks initiated last year from the progressive end of the political spectrum that condemned the company for allowing users to traffic widely in conspiracy theories and share fake news at a dizzying speed without moderation.

Hate speech has continued to fester on the platform, in particular amongst private groups that are harder to moderate.

The US former Democratic presidential candidate Elizabeth Warren led a blistering criticism of the company and its leaders, with public appeals last year during her campaign for the Democratic presidential nomination to hold Facebook accountable for its decision not to regulate political speech.

They’ve decided to let political figures lie to you — even about Facebook itself — while their executives and their investors get even richer off the ads containing these lies,” Warren wrote on Twitter.

“Once again, we’re seeing Facebook throw its hands up to battling misinformation in the political discourse, because when profit comes up against protecting democracy, Facebook chooses profit.”

To illustrate her point, Warren ran an ad with intentionally false information, alleging that Zuckerberg and Facebook had endorsed Trump for re-election. It was not flagged by the site’s moderators.

A decline in reputation

The steady inflow regarding public disclosures and accusations has caused public opinion to downgrade the company, with its peak being reached around July as companies like Starbuck and Coca-Cola took an active role in advocating the “boycott movement”.

This caused Facebook to record the biggest decline in its reputation amongst any major corporation in America. According to an annual survey conducted by The Harris Poll, Facebook was the number one contender for the “decline in reputation quotient” in 2019 primarily due to the Cambridge Analytica saga and the boycott movement was perhaps the last nail in the coffin.

But none of that seemed to affect the company’s bottom line with advertisers who recognized that its reach was continuing to extend across the globe and into older demographics.

Without that, the company that generates some 98% of its nearly $71 billion in revenue from ads, has had little incentive to reconsider its behavior.

The boycott campaign had gained widespread attention in mid-June when Patagonia, REI, and North Face — outdoors companies that have made values-based consumerism part of their brands — joined the effort.

Some of the other companies involved — Ben & Jerry’s, Puma, Luluemon, and Vans — have younger, progressive customer bases, or at least, present themselves that way.

It’s been joined by more mainstream marketing giants like Ford Motor Co, Microsoft, Unilever, and Pfizer. Since then, around 250 more companies have signed on, according to a running count gathered by the Anti-Defamation League, with some companies pausing marketing efforts on other social media platforms, like Twitter, joining the league.

Inside the US, the coalition of civil rights groups including the ADL and the NAACP is spearheading the campaign, which has been dubbed “Stop Hate for Profit.” The effort, perhaps ironically, spread across social media with a hashtag, rapidly becoming a cause celebre.

Companies are taking varied approaches to the campaign. Some are pausing advertising for July, while others have announced a suspension through the end of the year.

It’s not about whether the boycott will meaningfully impact the company’s bottom line — more than 8 million entities advertise on Facebook, Chief Operating Officer Sheryl Sandberg said in April — but investors are taking notice.

Facebook stock slid after Unilever, one of the biggest advertisers in the world, said it would stop running ads on Facebook, Instagram, and Twitter through the end of the year, citing a “polarized election period” and noting that “continuing to advertise on these platforms at this time would not add value to people and society.”

Breathless headlines earlier this week had noted that the company had lost $60 billion in market share in just two days as a result of the actions.

Many companies that have pulled ads from the platform have referenced Facebook’s approach to hate speech and misleading or fake content.

The chief marketing officer of Levi Strauss & Co said in a blog post about the company’s decision to stop its Facebook advertising that Facebook’s failure to stem hate speech and misinformation “fuels racism and violence and also has the potential to threaten our democracy and the integrity of our elections.”

The Clorox Co said it was pausing Facebook spending because it feels “compelled to take action against hate speech.” And chocolate manufacturer Hershey’s said it was joining the boycotts after conversations with Facebook earlier in June about its handling of hate speech failed to produce results.

Despite repeated assertions by Facebook to take action, we have not seen meaningful change,” Hershey’s said. Just last month, the company again saw controversy over former U.S President Donald Trump’s posts about mail-in ballots and fraud. While Twitter decided to label the posts as misleading, Facebook determined that they did not violate its policies.

Facebook also declined to take action on a widely-decried post from Trump that said: “When the looting starts, the shooting starts,” referring to the widespread protests over the death of Floyd. Twitter, on the other hand, hid that post for glorifying violence.

The Trump connection

The positions have led to speculation about Trump’s relations with Zuckerberg, whose company has been able to steer itself quite clear of the types of threats of regulation or investigation that the president has levied against tech companies like Amazon.

Reports in recent days hint of a solstice between the two on the handling of Trump’s inflammatory social media messages that has sparked a crisis of confidence among the company’s employees.

Now, Facebook has responded to the boycott defensively. It said it has invested billions of dollars into technology and employees that moderate content and pointed out that it has banned 250 white supremacist organizations from both Facebook and Instagram.

But the company also admitted that work remains to be done, starting with a series of policy tweaks when it took its first tepid steps toward publicly disavowing controversial posts from the president or his supporters.

However, not all of the drama can be labeled as a facade. Zuckerberg had acknowledged that Facebook would delete posts that contained false information about voting and would create a new category for its material content that is “newsworthy” but that otherwise violates its policies.

He explicitly said that no politician would be exempt.

Facebook also decided to ban a broader range of hateful content in ads, and agreed to an outside audit by the Media Rating Council to further clarify its stance as a “social media platform that seeks to adhere to the highest standards”.

And while it seems to yield to those who say it does not do enough to ban hateful content, avoid the spread of disinformation, or fact-check political posts, it is now also coming under fire from those on the right who were initially reluctant to alienate and who are gradually arguing that free speech is censored by the business.

But without further action on hate speech, it is “starting down a long slippery slope to being irrelevant,” said David Jones, a top advertising executive of NYT, and also a founding member of Facebook’s client council, a group of marketing executives who advise the company.

“Their intentions are good, but their judgment is poor,” he told the paper.

In a nutshell, that is the absolute truth. Good judgment always comes from experience. Conversely, experience only emerges out of bad judgment, which requires one to take on more risk, as Zuckerberg himself quoted below.

“The biggest risk is not taking any risk…In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks”

Image: Vector Portal

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