Wednesday, May 2, 2012

The Ad Bubble Has Popped

Just some thinking and brain dumping. This will be thin on supporting data.

Facebook is over. And this has serious implications for musicians trying to get noticed.

Facebook (and you may as well assume Google, too) is supported almost entirely by advertising income.

Ask yourself: What was the last Facebook/Google advert you clicked on much less actually bought something?

I already know the answer: Zero.

This is Facebook's dirtiest secret: For all the immense mining of our most intimate data, Facebook *cannot* place a relevant or meaningful advert in our faces, if we see it at all.

Despite "knowing" almost everything, Facebook knows nothing. 

This is not entirely Facebook's fault, as the majority of ad buyers are actually criminal organizations (seeking to sell illegal pharmaceuticals, or using the adverts themselves as a hack method (see: Flash exploits.)) But it is the reality we both inhabit: ads are useless and criminal. This is unsound footing upon which to build the world's premiere social networking site.

The Ad Bubble has popped.

What's Facebook to do? Start charging? Would you pay $49 a year for Facebook? Would you pay *anything* for Facebook?

WHY?

Answer: To manage social capital.

Here's the challenge: Social capital is connected to the scale of the userbase. If FB's users leave (as they already are), there's less opportunity to build/manage social capital (read: people knowing AND giving a shit about you/what you're selling.) Get a job via LinkedIn lately? (Answer: No.)

I don't think there will be "another Facebook." Social capital has been scaled out and it's tangible utility has been realized as near-futile. Cohesive social groups (tribes!) have thousands of options for online services already - they don't need another one. The appeal of Facebook for social capitalists was the huge userbase, but as the number of active users dwindles, there's less capital to go around.

That is a classic bubble pop.

The good news is musicians can stop wasting time on Facebook and start wasting more time practicing.  The bad news is people are saturated with requests for their time. This can be a blessing or a curse: it means they only trust their closest friends (blessing) but it takes forever to get credibility (curse.) Can you hold out long enough?

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