How Ads Will Inevitably Destroy Your Social Network
Just about everyone agrees that social networks would be better without ads.
They pop-up awkwardly in the middle of intimate conversations with friends, and impose themselves aggressively when we’re browsing images, music, and videos. It’s especially creepy when the same ad follows us from one page to another.
But it turns out that the negative effect of advertisements on social networks goes much deeper than this.
In fact, any network that relies on ads to make money must always get worse over time. By worse, I mean less interesting, less inspiring, and less entertaining.
1. Ads kill the incentive to post interesting stuff.
A long time ago (three years ago — which is virtually forever in Internet time), most big marketing agencies in New York City still preached that the worst way to use a social network was to advertise on it.
Their advice to corporate clients was that it was better to build a huge organic following, rather than having to pay to reach their customers. Once someone is following you, you could talk to them through the network, forever, virtually for free.
So brands got into the content-making game. BMW and Prada built huge followings by sponsoring high-quality original films made by cutting edge and famous directors. Red Bull did threw people out of airplanes. Converse offered free recording studio time to emerging musicians, and Nike housed graffiti artists in a bungalow on the beach in LA. Five years ago, the list of companies doing stuff like this was endless.
But it didn’t take long for most large brands to realize that it’s difficult (and expensive) to consistently make engaging content — especially if you have to compete with all the other stuff on the Internet on a level playing field. Plus, it’s hard to make awesome art about tortilla chips and viral films about car insurance.
So when Facebook, Tumblr, Twitter, Instagram, and many others began to sell ads, the big brands rejoiced! You could practically hear them singing in marketing departments, from New York to Chicago to Seattle.
Suddenly, big brands didn’t have to bother making stuff interesting at all. Marketing departments just had make banner ads (“Try new sausage flavored Doritos!”) and pay for us to see them. Thanks to ads, the playing field was no longer level — money could trump quality.
Buying ads was much cheaper and more effective for big brands, but by removing any incentive to make interesting content at all, ad-based social networks inevitably got more boring. And the more effective and targeted those ads become, the more boring the networks get. It’s an inevitable cycle.
2. Ads bury stuff made by creative people — who make most of the things worth looking at to begin with.
In the beginning (before ads), everyone who followed anyone on Facebook saw all of their friends’ posts — and vice versa. The same was true on Twitter, Instagram, Pinterest, Tumblr, and most other big social networks. Feeds were chronological.
This created a fairly level playing field where small creators like photographers, artists, writers, designers, car customizers, fashion designers, small businesses — you name it — competed with large corporations for user eyeballs’ screen time.
This lead to a creative renaissance, since people could use social networks to promote anything that was truly remarkable — photo, video, animated GIF, music, event, essay, whatever — which, on its own merits, could be posted and reblogged thousands of times. The best (or at least the catchiest) stuff went to the top.
When social networks started selling ads, all that began to change.
First came boosted and sponsored posts, which appeared in our streams in place of stuff we’d chosen to see.
But the real kicker was when networks adopted algorithms that control what we see — and what we don’t. Pretty soon artists, musicians, photographers, writers, performers, celebrities, hobbyists, small businesses — pretty much anyone with a fan page — were being forced to pay to avoid having the algorithms hide their posts from their fans completely.
This pay-to-play policy, which is now the norm on Facebook and in various stags of emerging on most other networks, means that even if you have a many thousands of followers, you still have to pay for virtually any of them to see your posts. My friend Ryan Miller, lead singer of the band Guster, recently pointed out that even though he has close to 250,000 followers on Facebook, only a few hundred see his posts unless he pays — which makes it difficult or expensive to reach all his fans.
The upshot of this is that if creative people like Ryan don’t have substantial marketing budgets (and most don’t) we rarely get to see their posts. This is especially true for individual artists, designers, musicians, filmmakers, photographers, storytellers and small businesses who have great ideas but no money to compete for eyeballs.
Ironically, these are the very people who make most of the interesting stuff we actually want to see.
The net effect is that the things we actually see on the big social networks are growing less and less interesting (I follow bands I love for a reason!) as more what big companies with marketing budgets pay for us to see ads (Geico! Pampers! Doritos!).
Algorithms assure that in order for the network to make money, the crap rises to the top — and small creators have less and less incentive to post their truly awesome creations on the network at all.
3. Algorithms always make social networks just barely not completely horrible to use.
An ad-based social network makes money every time they show you an ad.
If they had their way they’d show you nothing but ads all day long, but that would probably piss you off and you’d find something better to do with your time. So what they’ve done is develop ever more sophisticated algorithms that determine the exact number, frequency, and size of ads that you are willing see.
That’s why if you use networks like Facebook, Tumblr, Twitter, or Instagram a lot, you’ll see a lot of ads — since the network figures they’ve got you hooked and you’ll keep coming back no matter what. Reduce the time you spend on the network, and you’ll see less ads the next time you return. New users, who aren’t hooked yet, see hardly any ads at all.
This leads to one inevitable result: the network always seems just barely good enough to keep you coming back, but not so terrible that it drives you away permanently.
And that’s why, if you ask just about anybody who uses a social network regularly, they’ll admit that they don’t really love it.
Its mediocrity is enforced by algorithms which are there to make the network money, and to keep you from getting so frustrated that you choose to never come back.
4. It’s all about the money.
Big, publicly traded companies like Facebook (which owns Instagram), Yahoo (which owns Tumblr) and Google (which owns just about everything else) exist for just one reason: to make money for their investors.
In fact, in the U.S. and most Western Countries, the only legal obligation that corporations have is to make money for their investors. If they do anything else — even if those things for arethe public benefit — they need to justify their as something that will help their business, or else their investors can sue them. That’s why almost no soft drink makers in the U.S. recycle their bottles and cans themselves.
It’s also why Google’s “don’t be evil” motto is just that — a motto that is used to guide marketing. And why Facebook’s Internet.org initiative, which sounds so great (put satellites up and get the world’s poorest countries online!) has been criticized so heavily in the countries it is targeting (because it creates a virtual ghetto where Internet access for the poor is an advertising platform that may not always have a neutral point of view).
It’s also why, over time, these big public companies must continue develop more sophisticated algorithms, collect more data about all of us, and ultimately sell that data to show more ads.
Which, as we’ve laready seen, inevitably drives them to become just barely good enough, but never great.
5. There is a better way.
About ten months ago a half dozen friends and I launched an ad-free network for creators called Ello.
We got a lot of hype in the media right away, mainly because we stood up to the “ads are the only way to make money on the Internet” meme that everyone has been living by for so long.
All posts on Ello are in chronological order and there are no manipulative algorithms controlling what you see. There is no pay-to-play policy. Everyone can see everything that the everyone posts. And there are no paid ads — ever.
This forces big brands to compete with small creators on a level playing field. Not surprisingly, most of the best stuff on Ello is being created by individuals (and not corporations), and it rises to the top. Ello continues attracting the cream of the world’s creative community, who find themselves at a massive disadvantage on big ad-based social networks.
We’ve also discovered that without ads, we’re free to do things that other networks cannot. We don’t need to divide screen space to make money. We can focus on keeping Ello beautiful, because let’s face it, artwork, photography, video, GIFs, music, and writing look terrible next to an advertisements for car insurance.
In October last year Ello converted to a Public Benefit Corporation, with a legal mission that requires it to never sell ads or user data to third parties. We also have a Manifesto and Bill of Rights which define not only our principals, but our business model and that supports them.
The structure of our network only gets better over time (and not just-barely-not-horrible) because it rewards creativity (instead of the biggest ad budget), and engenders trust (because we don’t have financial motivations to manipulate anybody).
Ello is still relatively small, especially next to the publicly-traded behemoths we’re often compared to. We’ve remained focused on growing right, not just fast. Todd Berger, one of my co-founders, often says that we’d rather throw the best party on the Internet than the biggest one. This policy continues to serve us, because as the big social networks are driven to serve more ads, they continue to drive more people to Ello.
For me, big ad-based social networks are already looking a bit like network television in the 1970’s, whose power seemed inevitable but slowly diminished with the rise of ad-free alternatives video, cable, and eventually the early Internet.
The discontent that surrounds ad-based social networks is a precursor to their decline — as more interesting, entertaining, and less compromised options continue to arise, and will inevitably take their place.
There is a better way.
Co-founder & CEO