Regulating Social Media
A marketer’s perspective on Facebook and Twitter
Image Credit www.thoughtcatalog.com
Transparency Notice: This perspective was written by the social media manager of Midwest Truth, who also runs several other social media accounts. The manager is in no way affiliated or employed by Facebook or Twitter, but does purchase advertising from these companies.
Everyone and their mother have called for action against social media giants. Facebook in particular had a co-founder go to the New York Times and explain in detail why Facebook should be broken up. The public’s negative opinion of social media is unsurprising, giving the numerous controversies companies like Facebook have had. However, the outcry to do something is leading to a dangerous direction. Many businesses and non-profits rely on social media companies. Regulating, breaking up, or God forbid, using the government to shut down social media companies would be a death blow to small businesses.
Businesses of all sizes including non-profits need to advertise. Any product or service is worthless if no one knows of it. Marketing is the method of alerting the market to the product’s existence. In example, a coffee shop everyone knows about is significantly more likely to stay in business compared to one nobody has heard of. Marketing is a requirement of business. So how do you market your business product and services?
First people used signs and word of mouth to advertise their business. The reach to possible patrons was small, but options were limited. As technology improved newspapers, radios, and even television became easy ways to advertise. They had large audiences, and by purchasing space they could be your audience too. Then came the big dog sauntering down the street, social media networks.
Social media networks are the greatest gift to marketer’s ever. Social media allows advertisers to have more tools at their disposal than ever before. It also lowered cost substantially. Instead of paying thousands of dollars to get into the paper in an all or nothing campaign, you could spend just a few dollars on small tests to find what works. It was advertising made easy for small companies. Additionally, the value of social media is compounded by the fact that the network can share your advertisement with others. For the first time ever, viral marketing became a measurable and possible marketing strategy.
When searching for a social media platform to advertise on, one important factor to understand is not users itself, but Metcalfe’s law. The law measures the effect of a telecommunications network, and can be measured by the mathematical expression n(n-1)/2. This is important to understand for a marketer, as the higher the value, the higher the possibility for the network to share an advertisement. You can observe the effect of the law below with a network of telephones sourced from Wikipedia.
It may be difficult to understand, but all you need to take away from this is the larger the number calculated form Metcalfe’s law, the more valuable the network is. For reference, there are over 2.38 billion monthly active Facebook users worldwide as of March 31, 2019. Plug in that user base into the equation and see what you get. (Remember: PEMDAS!)
So when media pundits say it is time to “break up social media,” it is not like breaking up standard oil or AT&T. It is impossible to breakup Facebook by region, it is a network on a globally connected network called the internet. Furthermore, a breakup of Facebook or Twitter would not be creating full sized pieces of the original companies. Instead, it would leave significantly reduced and anemic remnants of the original companies. Outright shutting down these companies would be destroying difficultly assembled networks of extreme value.
The effect of either breaking up or dissolving social media would be immediate. Advertising reach would diminish not just by the user base, but also the network value itself. It would make it very difficult for new and small business to succeed, as their ability to reach consumers would be crippled. Outright destroying social media companies would decapitate the ability for many business to market, with some likely never recovering.
Regulation would be interesting, but if implemented it would have to move forward carefully. The last thing social media needs to become is a government-granted monopoly. Such a monopoly would limit user options or could easily kill other social networks with better ways to and market to consumers. It could also make it harder for smaller business advertisers to compete.
Heavy handed regulation, chopping up, or abolishing social media companies in itself is not the answer. Too many are reliant on social media for their business and their livelihood to emotionally stomp on these companies. However, it is also true that social media companies are causing problems. One such problem is the inconsistent banning of users. Banning users decreases network value, and is not in the best interest of marketers to see them go. A different approach could be to treat companies such as Facebook like they are: a business. Joining social media should be like entering into contract with a company, with clear rules and guidelines. If banned, a user should be given an appropriate reason for a ban, and should be allowed to take a company to court for punitive damage if the company is found lacking. This may not be enough perhaps, but anything is better than the alternatives.