How Users Will Benefit From Facebook’s Problems

The world's most influential corporation has kept critics at bay with a policy of silence and stone-walling, but now it has found a group it must answer to - namely its advertisers.

Facebook CEO Mark Zuckerberg.
Bloomberg

Something interesting has been happening to Facebook this past year: On the on the one hand, it is growing by leaps and bounds, spreading in all directions – in terms of both the number of users worldwide and the areas in which it is involved. On the other hand, the more it develops and strengthens its hold, the more vulnerable it becomes and the more dependent on a large number of entities.

In 2016 Facebook was on the receiving end of beatings and criticism from all directions, private and business users as well as governments and political groups. Within less than a year the criticism was based on a large variety of complaints, from the bias in favor of the political left on the feed of American surfers, to the platform’s inability to deal with the problems of incitement, departmental decisions surrounding inappropriate live video broadcasts and issues related to harming users’ privacy and cross-referencing information about them with other platforms that it owns, such as Instagram and WhatsApp – not mention the international public protest against its global tax maneuvers.

Until now Facebook has managed to evade most of the complaints using the same tools and methods: silence, denial, refusal to respond seriously to complaints or directing the complainants to its complex legal policy papers. “Facebook operates according to the law in the countries where it operates,” or “Facebook operates a system of universal community standards” are the automatic responses issued by company spokespeople regarding the various complaints.

The company’s executives prefer to solve the more fundamental issues behind closed doors, whose content doesn’t leak to the media, and through an aggressive lobby in administration corridors. At such meetings specific methods of operation are drawn up with government leaders in the various countries, issues are decided and operative decisions are made.

Outwardly, Facebook has not retreated by even a millimeter from its tough policy, but in negotiations it manages to give the other party the feeling that it is making concessions. They establish an examining committee, draw conclusions and operate accordingly. In most cases (as in the complaints of political bias in the “news feed” component, or the removal of controversial video clips and content), they can wave off complainants with the excuse of a “technical mishap” and keep going.

But as the platform increases its hold on the everyday life of global society, users are no longer willing to accept these automatic answers and Facebook has begun to change direction. An apology has become a useful tool in the war for public opinion, and a tool for dealing with criticism on all fronts: an apology for removing the “napalm girl” photo that included the Norwegian prime minister, an apology for distributing a false article about a senior Fox News reporter, an apology for freezing the bank account of an activist working for Kashmiris, and of course, the biggest apology of all over the weekend, surrounding the scandal of the inflated data sent by Facebook to advertisers about the average viewing time of video commercials.

Here it’s no longer possible to hide behind legal policy papers, here it’s no longer a matter of isolated and helpless users or even governments to which Facebook is not bound by taxes. This time it’s about the most important group for the company – the advertisers, those without whom there’s no right to exist. Without the advertisers and their willingness to channel increasingly large budgets to the social platform, the share wouldn’t continue to soar and its value wouldn’t continue to reach such huge sums.

Suddenly Facebook is hastening to keep the advertising agencies and large advertisers informed, to share the details of incidents with them, to promise them compensation. And when the details leak to the media as a Wall Street Journal report, and Facebook’s share value dives by 5% within seconds, the company once again deviates from its custom.

On Friday, immediately after the opening of trade, Facebook released an official announcement, signed by one of its leading executives: “This isn’t just about this error. This is about how seriously we take our partners’ commitment to our platform, and how their investments with us wholly depend on the transparency with which we communicate,” said David Fischer, Facebook’s Vice President of Business and Marketing Partnerships (and son of former Bank of Israel Governor Stanley Fischer) in a post on the social network.

“We know we can’t have true partnerships with our clients unless we are upfront and honest with them, including when we make mistakes like this one. Our clients’ trust and belief in our metrics is essential to us and we have to earn that trust. That is why we also give marketers choice by offering third-party video verification options with companies like Nielsen and Moat,” according to the apology sent on Friday.

At the rate at which Facebook is developing, it’s not going to be the company’s last apology, and there’s no question that it symbolizes the process it is undergoing. Only four years ago, when it was issued on the stock market, there were about 1 billion registered members, whose posts included mainly pictures of cats, check-ins at vacation sites and links to interesting articles. Since then the number of users has jumped to about 1.7 billion, feeds have become filled with violent and biting content, the use of video has been pushed forward strongly and the number of advertising tools and their integration into the feed has soared by tens of percentage points.

Policy of vagueness

The company’s image of itself has also changed since then. Founder Mark Zuckerberg no longer treats Facebook as a social network, but rather as a platform that provides a wide range of commercial services: marketing, advertising, a pipeline to disseminate content, a means of mass communication, a commercial platform, and recently even a body that will try to eliminate all the diseases known to humankind by the end of the century. A revolutionary change in the organization’s image of itself – within four years from the day when it became a public corporation.

And precisely here lies Facebook’s main problem: It is no longer a young startup with some tens of millions of users and cool features, but a huge corporation that controls a variety of apps that concentrate information on about 2 billion users, whose goal is to change the living habits of all of Earth’s inhabitants.

This is a corporation that has the ability to bring down governments, elevate leaders, divert billions of dollars in any direction and influence the mood of hundreds of millions of people worldwide. Such an organization cannot hide behind incomprehensible legal policy papers, cannot dismiss investigative journalists with vague and sophisticated answers, cannot say that technical mishaps are to blame for failures and injustices caused to platform users, or make do with providing limited and deficient data to those who advertise on it.

At a time when users are willing to waive their privacy in order to be a part of the digital world, the organization that provides them with this policy is run with a lack of transparency bordering on an absence of good faith vis-à-vis both its users and its business partners. Facebook is run today in a condescending and even childish manner – management that is inappropriate in a public corporation that serves billions of users, with revenues of almost $20 billion annually and a valuation of over $265 billion.

Facebook cannot continue for long to maintain the policy of vagueness and lack of transparency that characterized its first years of operation as a mature company. The more it continues to expand, the more demands there will be for greater transparency, creating confidence and opening better channels of communication with users and business partners. The sequence of crises of confidence in recent months may yield positive results for the other two sides of the triangle constructed by the company, which turned it into the most influential and important platform in the present decade.