If it looks like a duck, swims like a duck and quacks like a duck, it probably is a duck. In the past couple of weeks Facebook has been quacking like it’s a media company. It’s not ducking its responsibility for controlling lies masquerading as news, and it’s snuggling up to traditional news media that distribute content on the massive Facebook platform.
Facebook has hired Campbell Brown, former CNN and NBC anchor, as head of news partnerships. In announcing that she was joining Facebook, Brown wrote: “I will be working directly with our partners to help them understand how Facebook can expand the reach of their journalism, and contribute value to their businesses. That also means making sure there is ongoing feedback from publishers as Facebook develops new products and tools for news organizations.”
The week following hiring Brown, Facebook announced that it was going to begin serving ads in the middle of videos (mid-roll) and “giving publishers 55% of all sales, which is the same split that YouTube offers” according to Digiday.
However, all of of this well-intentioned and welcome sense of journalistic responsibility does not make Facebook a media company. It is much more than that. Facebook is a platform like Microsoft’s Windows, Amazon and the biggest platform of them all, Google. Even though Facebook and Google are supported by advertising like media companies such as Comcast, the Walt Disney Company, Time Warner, Twenty-First Century Fox, Google alone is worth more (market cap) than all of the media companies mentioned.
As of Jan. 12, 2017, Google’s market cap is $560.4 billion and Facebook’s market cap is $358.4 billion. The only company that is more valuable than Google is Apple ($635.9 billion). For comparison’s sake, the largest traditional media company is Comcast, which has market cap of $171.10 billion, about 48% of Google’s. Disney’s $170.5 billion market cap is just 47.5% of Google’s and 21st Century Fox’s market cap ($54.86 billion) is more than twice CBS’s market cap ($26.93 billion), which means that Google is more than 20 times more valuable than CBS and Facebook is more than 13 times more valuable than CBS.
And the size of the audiences that marketers can reach via Google and Facebook dwarf the audiences available on the traditional media to a similar degree as the difference in their market caps indicate.
Why have marketers and advertisers switched much of their advertising investment from the traditional media to Google and Facebook? Because of the precise targeting capabilities of online advertising. When advertisers (including political candidates) invested in advertising on traditional media such as TV, they bought content that they assumed reached the audiences they wanted to reach — they bought news for older, better educated people, for example.
With digital ads, advertisers don’t buy content; they buy individual impressions and they buy these impressions programmatically in real time. Thus, Campbell Brown doesn’t have to handle individual buys from news publishers or advertisers. Instead, she educates them on the advantages and benefits of publishing or advertising on Facebook and then they do the work of placing the orders and managing their accounts programmatically, computer to computer on the Facebook Audience Network.
In addition to automating the ad buying and selling process, Facebook and Google, as platforms and not content producers (media or news companies), don’t have to take the heat, insults and rants from an media-bashing president elect and his press thugs.
In the current anti-media climate coming from Trump Tower and soon from the White House, what organization would want to be labeled as a media company? Bring on the platforms.