How Facebook Profits Like a News Organization, and a Research Tool

I just discovered this article about how the author thinks that Facebook is the biggest news organization. He argues that Facebook is a platform for “hyper-local” news. You and your friends’ status updates are the primary “news articles”in that platform. His idea resonates with Daniel Miller’s discovery that Facebook reinforces the users’ connection to his/her private network. While news such as “my kid caught a cold” may not have much value to everyone, it can mean a lot when your friends see this and offers help or comforts.

Therefore the profit model of Facebook resembles what it is in traditional news organization, but even better.

Because of its hyper-local characteristic, Facebook attracts advertisers with precise target audience. At the same time, Facebook’s advertisement has “another novelty — only a small amount of space devoted to ads, …but magnetic news content and a limited supply of highly desirable space is a recipe for printing money.”

Another emerging trend of all social media leverage is their potential in marketing research. At the recent Advertising Research Foundation's Re:Think 2011 conference in New York, P&G’s global consumer and market knowledge officer Joan Lewis gives a direct attack on the traditional survey research, saying “We need to be methodology agnostic.” This comment rises because of their increasing attention paid to marketing researches devoting to social media. The buzzes there, though lack of “representation” compared to traditional survey research, may give the company more insight then the survey research. At the same time, less people are willing to take surveys now that they can speak out loud about what they think of a product on social media sites. No wonder that Coca-Cola has cut its ad spend by 6.6% and invest more in social media.