Facebook and the Advertising Bubble

By John Ballard

Doc Searls is to the Internet what Paul McCartney or Paul Simon are to pop music. Because he's not one of those people always tooting their own horns, readers who don't know who he is, especially younger ones, can be forgiven. But make no mistake about it, when Doc Searls speaks many of the right people listen.

I first became aware of him some time ago and have been content to let him do his thing while I do mine. His "thing" if a lot more significant than mine, of course. I only rub shoulders with movers and shakers in my dreams. Here are a couple of early Doc Searls links by way of introduction. After this, you're on your own. And if you don't already know about cluetrain, you really do have a lot of reading ahead of you. (Think Buckminster Fuller -- you don't need to memorize all of Synergetics, but you risk revealing industrial size ignorance if you don't know the reference.)

Anyhow, this morning's commentary by Doc Searls looking at Facebook is a really good read. His observations of advertising in general and Facebook in particular are not only lucid (even obvious) but the wierd part is that so many otherwise smart people don't see them already. Here are a couple of snips to whet the appetite. He opens with a reference to an essay now making the rounds then quotes himself. 

One might think all this personalized advertising must be pretty good, or it wouldn�t be such a hot new business category. But that�s only if one ignores the bubbly nature of the craze, or the negative demand on the receiving end for most of advertising�s goods. In fact, the results of personalized advertising, so far, have been lousy for actual persons�

Tracking and �personalizing��the current frontier of online advertising�probe the limits of tolerance. While harvesting mountains of data about individuals and signaling nothing obvious about their methods, tracking and personalizing together ditch one of the few noble virtues to which advertising at its best aspires: respect for the prospect�s privacy and integrity, which has long included a default assumption of anonymity.

Ask any celebrity about the price of fame and they�ll tell you: it�s anonymity. This wouldn�t be a Faustian bargain (or a bargain at all) if anonymity did not have real worth. Tracking, filtering and personalizing advertising all compromise our anonymity, even if no PII (Personally Identifiable Information) is collected. Even if these systems don�t know us by name, their hands are still in our pants�

The distance between what tracking does and what users want, expect and intend is so extreme that backlash is inevitable. The only question is how much it will damage a business that is vulnerable in the first place.

With the patience of Job he lays out some of the realities of advertising in the same way that climate change people keep pointing to another elephant or naked emperor in the room, concluding with these two wonderful paragraphs.

Here�s the thing, and why now is the time to point this out: most of those developers have a hell of a time getting laid by VCs, which on the whole have their heads stuck in the calf-cow model of the Web, and can�t imagine a way to improve the marketplace that does not require breeding yet another cow, or creating yet another ranch for dependent customers. Maybe now that the bloom is off Facebook�s rose, and the Filter Bubble is ready to burst, they can start looking at possibilities over here on the demand side.

So this post is an appeal to investors. Start thinking outside the cow, and outside the ranch. If you truly believe in free markets, then start believing in free customers, and in the development projects that make them not only free, but able to drive sales and form relationships that are worthy of the word.

A word of advice: don't scan Doc Searls carelessly. His writing style is very relaxed and it's easy to imagine his conversational tone means he's not saying much of importance. Nothing could be further from the facts. If he goes to the trouble to put up a blogpost you can be certain that what's in there is worth reading.