Once Again: Facebook is Evil

thumb_32friendsworthI mean this.  If you want to make free contributions to market totalitarianism’s Big Brother, keep your Facebook account.

Here’s the real purpose of that account, as reported by Business Week for June 1, 2009:

Advertisers are…interested in understanding individuals. Decoding friendship, many believe, could be the key to getting consumers’ attention. Historically, this wasn’t so hard. Information was in short supply, and by comparison, time was cheap. Not long ago millions waited through entire newscasts just to learn who won a game or what tomorrow’s weather would be. This was ideal for advertisers: They had a captive audience.

For all its popularity, Facebook has yet to prove itself as an advertising platform. Visitors, it seems, focus on their friends and pay scant attention to ads. Few click on them, and advertisers pay pennies for page views. Consequently, Facebook, with its estimated revenue of $300 million this year, brings in scarcely a dime a month per member.

Now we’re swimming in information. We can call up nearly every bit of news, music, and entertainment we want on demand. In fact, there’s so much of it that we need filters to block the boring or irrelevant stuff and help us find the bits we need or desire. This has created what many call the “Attention Economy.” Says Bernardo A. Huberman, director of the Information Dynamics Laboratory at Hewlett-Packard: “The value of most information has collapsed to zero. The only scarce resource is attention.” So how do we figure out where to direct it?

The easiest way is to get tips from friends. They’re our trusted sources. At least a few of them know us better than any algorithm ever could. Little surprise, then, that the companies most eager to command our attention are studying which friends we listen to. Online friendship is a hot focus for Facebook, Google, and Yahoo. They joust to hire leading sociologists, anthropologists, and microeconomists from MIT, Harvard, and Berkeley. Microsoft just established a research division focused on social sciences in Cambridge, Mass.

Statistically, friends tend to behave alike. A couple of years ago researchers at Yahoo found that if someone clicked on an online ad, the people on his or her instant chat buddy list, when served the same ad, were three to four times more likely than average to click on it. It makes sense. Friends share interests.

But it raised lots of questions. Which types of friends have the most meaningful correlations with each other? People have always confided in a small circle of intimates, often only two or three. They’ve also had wider circles of experts for specific advice, whether on cars or cooking. Then there’s a broader circle of acquaintances whose opinions count far less but who can still generate buzz about a new restaurant or senatorial candidate. By studying patterns of interactions on networks—often scrutinizing us only as anonymous bits of data—researchers are working to predict which friends we trust and which we pay attention to in each area of our lives.

In an office above Palo Alto’s University Avenue, a lean 32-year-old PhD from MIT’s Media Lab pores over the data connecting millions of dots. Cameron A. Marlow, a research scientist at Facebook, has perhaps the greatest lab in history for studying [how to exploit] friendship. He can study social media communications including wall posts, shared photos, pokes, and friend requests among 200 million people.

The hope is that if Marlow and his team manage to track the paths of influence among its communities, the company [Facebook] might be able to offer more effective and lucrative advertisements and promotions.

An early step is to separate each user’s friends into clusters. Marlow pulls out a chart illustrating the social network of one of his colleagues, Alex Smith. It shows different groups of dots and their connecting links. One big and busy group represents fellow workers at Facebook. Others are high school friends, family, in-laws, frat brothers. Understanding these types of relationships could provide valuable context.

Marlow’s team recently carried out a study to determine how close we are to our friends online. They looked at how often people clicked on their friends’ news or photos, how often they communicated, and if the communications traveled in both directions. Studying this data, they determined that an average Facebook user with 500 friends actively follows the news on only 40 of them, communicates with 20, and keeps in close touch with about 10. Those with smaller networks follow even fewer. What can this teach advertisers? People don’t pay much attention to most of their online friends. By focusing campaigns on people who interact with each other, they’ll likely get better results.

Remember when capitalism’s apologists used to dismiss the very idea of socialism because of its alleged inherent reliance on social engineering?

Ordering Pizza Hut From Your Facebook Page

You know how I’ve been warning you that “social networking” sites like MySpace anf Facebook are Trojan Horses for new and improved marketing campaigns?

I won’t say I told you so…but I told you so.

This just in from Advertising Age:

CHICAGO (AdAge.com) — A number of fast-food chains are reaching across the digital divide to get young consumers to order via Facebook or their iPhones. And they’re building valuable databases of their customers in the process.

Pizza Hut, which recently crossed the $1 billion benchmark in online sales, is launching a Facebook application that allows fans to place orders without leaving their profiles. Although online ordering isn’t new — the chain has offered it in some form since 2001 — Bob Kraut, VP-marketing communications at Pizza Hut, said the bulk of that $1 billion in sales has come in the past 18 months. The chain is also launching text-ordering capabilities and e-gift cards, which can be purchased, exchanged and redeemed online.

Pizza Hut’s not alone: A number of the nation’s biggest fast-food chains are beginning to embrace text and iPhone ordering capabilities, at least as tests. Already for the three months ending in August, food marketers sent almost 1.4 million text-message ads, up 37% from the same period last year, according to ComScore’s M:Metrics data. Consumers seem to want the offers: of all the ad categories using SMS marketing, restaurants had the highest response rates, with 15.5% of consumers responding to the ads.

Subway spokesman Les Winograd said some of the chain’s franchisees have begun to offer ordering via text and iPhone apps. The chain has an unusually open policy that lets individual franchisees experiment with their businesses.

“Some of that is stuff that they’re doing on their own, but they share information,” Mr. Winograd said. “We’re constantly encouraging franchisees to think out of the box and try something new. You never know, it might take off.” (He said adding turkey to the menu was a franchisee experiment in the chain’s early days.)

Lessons learned

McDonald’s experimented with text-message ordering in Chicago last summer, with signs encouraging consumers to text in their late-night orders. Spokeswoman Danya Proud said there were “some very good learnings from this campaign about how to execute future viral campaigns.”

Chipotle is developing an iPhone-ordering application to complement its existing web- and fax-ordering platforms. The chain also lets consumers pay online, place group orders and save ordering information for return visits.

While shifting consumer behavior may be behind the move toward mobile ordering, it’s also lucrative. According to Mr. Kraut, online buyers spend more. “It’s a little more upscale demographic, and a lot of people use credit,” he said.

To attract those customers, Pizza Hut is launching a promotion with eMusic.com that gives customers 75 free downloads in exchange for buying a pizza online. The chain is hoping to boost awareness of its online ordering, up its cool factor and build its customer database.

Younger consumers

Mr. Kraut said the chain uses its database for targeted, sometimes monthly promotions, as well as market research. He declined to disclose the size of the database or how much it’s grown this year.

“We’re seeing that our customers are getting younger and younger,” said Mr. Kraut, adding that the eMusic promotion is a way to bring “people in from other source and offering them something extra.” Pizza Hut has done a variety of online promotions this year, including a partnership with Rockstar Games and its Midnight Club Los Angeles driving game.

Package-food companies aren’t sitting on the sidelines either. Kraft chief marketer Mary Beth West said the company has created an iPhone application for consumers to download recipes and shopping lists in the grocery store.

“Even in the current economy, people don’t have any more time than they had before,” Ms. West said. “They’re trying to get dinner on the table, and this is going to help them do that.”

Things like walking, daydreaming, and cooking, you see, are profit-killers. The ideal is the living-room conveyor belt-served “media chair,” in which people sit all day using and being sold corporate capitalism’s wares.

Big Brother would have 100 wet dreams if he’d ever been able to conceive of such an arrangement.