Good riddance! What he and others are complaining about is that Facebook has started to use pricing to stop them from spamming users. This is a good thing!
We're free-marketeers, right? Prices allow scarce resources (eyeballs, users are the product, remember?) to be rationed in an efficient manner. Would he prefer some nameless, faceless bureaucracy determine who gets to see his messages?
This is a commons problem on some level. Very similar to the issue with push notifications written about elsewhere. Too many companies used Facebook as a way to get around email spam filters, and now everyone (good actors included) is suffering.
If you are constantly getting spammed by a fan page that you explicitly liked or followed, then the appropriate answer is to unlike or unfollow it. There's no reason to curate information that you wanted to get to begin with.
What if Twitter implemented something like this where certain tweets from a person you are following do not appear? How would that feel?
This strikes me totally as a money play and not for the user.
Typical HN Top-poster - up in arms about one point they care about, misses entire point of article. The issue is not that there is pricing, the issue is with how the pricing is presented and handled verses how most business people view the concept of likes/follows/subscribers.
> The right price is to charge an upfront fee for brands. In the current system there is complete uncertainty on the cost. And even worse, at least for our size brands, you have to deal with the pricing for each posting, which is a time waster."
> "I'm just suggesting that a single upfront fee or a monthly fee where there is certainty of cost would allow brands to focus on bringing in consumers to like the brands knowing that they can always reach everyone that likes them. I don't know what that number should be."
He's voting with his feet - like any of us would tell others to do - and saying without more sane pricing, he's looking elsewhere. Good riddance is a bad strategy for long term customer growth, methinks... but I'm not a business person.
You've created a straw-man so big it's trying for the basketball team.
As arron said, the relation between you and the brand can and should be moderated by you. Furthermore, just because a monetary transaction is involved doesn't mean it's a free market at all. Facebook is the faceless bureaucracy you rant against when it's trying to gate brand communications like this.
You're just falling into Facebook's ostensible justification for aggressive monetization tactics. This is content that users voluntarily signed up to receive. Facebook is already setup for users to curate what content they receive. They chose who to friend, what personalities to follow, and what fan pages to like. They have the additional option to limit certain types of posts from certain people. They also have the ultimate means to limit content by blocking, un-friending, un-following, and un-liking pages.
This is simply a weak excuse given by Facebook to charge brands, which they have every right to do. But to say their motivation is to stop spam is simply dubious.
Dude, if I follow a page, I want to get updates on it.
Now he's having to pay extra to make sure I get updates?
There are other systems out there that we can use to maintain the "interested party" connection, e.g., twitter, email, rss feeds, g+, $your_system_here.
What on earth are you on about? Facebook doesn't just put stuff in your feed for no reason. Brands I like appear in my feed because I like them. If you consider this spam, why on earth would you follow the brand? This argument is just so so so bad and it is used over and over whenever people talk about facebook advertising. Its basically like signing up for a mailing list and then freaking out when you get an email. You got it because you opted in to seeing updates. If you don't want those, there is a simple way to opt out. You don't need to defend facebook no matter how wrong they are to do that...
There are other ways to limit the onslaught of spam: user-defined filters. Facebook could have gone that way, but then, giving users control isn't lucrative.
What about the organizations that can't afford this pricing model? There are quite a bit of non-profits and small businesses I follow that simply can't afford to sustain this. They're not spamming me if I voluntarily chose to Like their page. I did that so I can get updates, coupons and specials. Costs will force them back to email marketing, and if that's the case we all lose.
+1 he's being a crybaby billionaire. He cries about paying $3000 to reach 1M users when I have to pay $1 in transaction fee to withdraw money from my bank.
It seems there are two different "Facebooks" - one for people, a real "scoial' network, the other for commercial entities and their customers. And this unacknowledged duality seems to be slowly coming apart.
There might be a huge opening here for a "companies only" facebook clone, where you can only get updates from your favorite brands and service providers, not socialize with friends.
"There might be a huge opening here for a "companies only" facebook clone, where you can only get updates from your favorite brands and service providers, not socialize with friends."
The reason it works for companies right now too is because everyone and their mom already on Facebook. I doubt a new "companies only" Facebook would really do well.
What would be more likely is a "people only" Facebook clone.
The more a particular company or service (or musician for that matter) deviates from the original product that attracted its user base in the first place, the greater its susceptibility to clones becomes.
I think all people want is simple and private social networking among their friends.
Facebook no longer offers this. Google+ certainly never did. There is a strong case that Myspace fell because at the time, Facebook offered more simplicity and more privacy.
Myspace was being deluged by spam during the summer of 2008 and that marked the beginning of the end for them ( http://www.google.com/trends/explore#q=facebook%2C%20myspace... ) Facebook is becoming equally noisy, except they are getting paid for the "spam."
As Facebook continues to aggressively attempt to increase its monetization, both on desktop and mobile, I think its going to get worse.
There is clearly an opening for a competitor coming along. I'd like to think of them as the Dropbox of social networking.
I don't understand. You can only have a Facebook for brands platform if the audience is there first(ie the social network). Who are the brands going to promote to without the social network there to consume and spread the brand's content. The audience is an integral part of it. That's how it was for Facebook, Twitter, and even MySpace.
Without meaning to be unnecessarily negative; what I find most interesting about this post is that neither the article, nor any comments in this thread so far, even mention Google Plus. Cuban seems to write it off as a contender, even a revived MySpace seems more likely to him as an alternative. Why?
Because outside of Silicon Valley, Google+ is perceived as a ghost town.
Every time someone says this in a HN thread, dozens of people respond with cute anecdotes about how great their experience is, but this place is like an echo chamber. If you actually go out and get the public _perception_ of G+ it's quite negative.
I mean Vic got his big G+ talk at I/O completely cut off for the sake of another product. That should show you the shift in Larry and Sergey's priorities
while g+ haven't yet (like the linux desktop year yet) reached the average joe crowd, and I really like this guy, mentioning myspace sound bonkers. another possibility is some of his businesses just go well with the myspace crowd.
Is it just me or does $3000 seem like a really cheap price for the Dallas Mavericks to reach 1M+ fans? Would it make any significant difference to their marketing budget if the price were cut to $1000 or doubled to $6000?
Think of when you go to an NBA game and they give out some sort of "freebie". I would imagine those game "freebies" cost much more than $3000, and regardless of that, with Facebook you are potentially reaching the 1M+ fans where as those game "freebies" might only be handed out to a measly 5K. It seems like a no-brainer to use Facebook to reach 1M+ fans at that price, vs what they traditionally pay for other forms of marketing.
Also, you could easily be selective on what sort of post validates for a $3K (post) promotion. Not all posts are worth promoting to every one of your fans, doing so would just weaken the brand image (in my eyes).
What was the "acquisition cost" of those 1M+ Facebook fans (likes)? Ostensibly, this is "double dipping" on the part of Facebook from the perspective of businesses and brands who've been marketing their FB presence in aims of adding subscribers they can reach.
One of the complaints in the article is that it's billed per message. $3000 is a bit much for some low level employee in the social media department to sign off while pushing ads.
I guess any kind of prepaid arrangement (with some reasonable quotas, or upfront costs + small price per post) would be more manageable.
I don't get it. Facebook isn't working out so they are considering a change to MySpace or Tumblr? How about changing your focus to oh I dunno ... your website!? Moving from one free, closed-garden system to another isn't progress.
His vision of Facebook makes no sense. There is no chance in hell Facebook will allow every "Liked" product, service and company to spam the users' newsfeed as much as they want, considering the primary purpose of it is to keep up to date with what friends and family are doing.
With regard to online advertising - companies follow people, people don't follow companies. Facebook gets this.
Let's play worst case scenario here - Cuban convinces all companies to leave Facebook. Then what? Do you honestly think there would be a mass diaspora of users because all the companies left? Hell no. Sure, Facebook's stock would plummet, but they'd still have options, because as long as Facebook has users, it has a future.
Now, let's reverse the scenario. All your friends leave Facebook. Then what? You leave too and so do all the companies, because after all, Pepsi doesn't hang out on Facebook to advertise to Coke. If the people leave, Facebook dies.
Facebook isn't a charity, nor a utopia, it's a company that is required by law to maximize value for shareholders. Facebook is already a master of providing value, they've built an empire by doing so. Now they have to learn how to extract value, and it's very smart of them to begin by extracting value from companies in a way that doesn't significantly impact user experience.
But this is just the beginning. Soon, Facebook will begin extracting value from people in more obvious ways. And I'd bet the #1 question on Zuckerberg's mind right now is, "How much shit will people take?" How many ads until everyone leaves?
I don't know the answer to that, but judging by how much shit is forced down the throat of an average American during a 30-minute episode of MTV cribs, I'd bet we'll take a lot more than we realize.
This is kind of amusing, in a way. It always seemed weird to me that large corporations were willing to invest so much in promoting Facebook - From CNN promoting it on every commercial to big brands creating departments to manage 'Social Media' - e.g. Facebook and Twitter.
Did they all think this was free advertising, forever? FB is (at least now) a publicly traded, 'walled garden' after all, and Twitter isn't much different.
Looks like the social media revenue model is becoming clear: All your customer are belong to us, pay up.
You can run around in circles moaning about how it isn't "fair", but it isn't the Mark Cuban who built the infrastructure or attracted the users with a core product on Facebook. Secondly, Facebook never guaranteed 100% reach, I'm not sure why Mark Cuban expects it (and for free!).
He's not pretending to be a tech trendsetter, he's being an investor, and hedging his bets, as all good investors do
This is a hedge against the unlimited patent exposure all the companies I have investments in face. Patent risk is impossible to quantify. It's unrealistic for most small to medium businesses to have any clue which patents they are at risk over. Vringo's IP from the merger is the flip side of that risk and offers an imperfect hedge. So, I made the investment.
> "The big negative for Facebook is that we will no longer push for likes or subscribers because we can't reach them all. Why would we invest in extending our Facebook audience size if we have to pay to reach them? That's crazy.
I think this mindset is the poisons venom in Facebook's revenue strategy. Facebook is seen as just a social network and not a legitimate communication or advertising platform like TV, radio, or mobile phones. Cuban has no problem paying for Ad's on Radio and TV, but is appalled when Facebook charges for a similar (And arguably more accurate) service. Facebook's response also makes little logical sense--On one hand they say the fees are to fight spam, but the screen clearly shows that the fees are to communicate with more people.
It makes sense for him to want to leave considering Facebook is really just providing a newsletter service, and it was the marketing that the companies have done to drive them to their Facebook pages. It should be a mutually beneficial relationship, not one where Facebook is trying to milk both companies and consumers. The problem is they aren't making 'enough' off of consumers, and therefore are trying to go after companies too. It's chicken and egg problem, and now that Facebook has 'everyone' on it they are trying to milk it. Yes, there is value of guaranteeing that X number of followers will see a post in their feed - which true fans would want to see anyway (and based on algorithms likely would or would be an active visitor to their Facebook page), however Facebook is trying to prove their $100 billion valuation by essentially trying to extort companies, whereas it should be a slightly above cost of reaching (as the minimum). Facebook is trying to charge Advertising prices for something that is at its foundation a service being provided; Facebook has no monopoly on containing fans. If Facebook doesn't change this quickly it has no chance of ever becoming a $100 billion company, because by that time Facebook won't be freely marketed by big companies linking to their 'Facebook pages.' Facebook's abusing the relationship, and like anyone in an abusive relationship - it won't end well for the abuser, they won't get what they want. - at least not once more people realize it's abuse and they don't need to be in that relationship.
Agreed. It sounds whiny coming from Cuban, but imagine you're a small business owner who relies on your Facebook page to communicate with your fans. You put a lot of time and money into gaining those fans organically, and now Facebook is essentially holding them hostage. What was that little blurb that Facebook used to have on their sign-on page? "It's free and it always will be." Hmmm. Don't promise a free service and then reneg. Perhaps businesses wouldn't have been so eager to get on Facebook if they knew that access to their fans would come at a steep price.
One could interpret this as Facebook being a "victim" of their own success - they have so much demand for advertising that they have to limit access to their userbase in order to ensure that the advertising retains its value. Perhaps, as Cuban says, uninformed business owners think they're paying for something other than what they're getting and demand will dry up once advertisers get wise. Or perhaps Facebook's conversion rate is just that good.
FB has a massive supply of impressions which has bottomed-out remnant/auction CPM rates industry wide.
I see this as a move to try and introduce a (somewhat) premium ad product. Users have already indicated interest in the brand -- now they will have to pay to reach these intenders.
When I subscribe to a page, I expect to get updates on new postings.
Because Facebook is using their EdgeRank to filter out those postings, I'm no longer get updates on all the postings. As such I've to go to the subscribed page manually.
No wonder I'm getting so few updates lately. Because Facebook is filtering out everything. How backwards is that?
Why do brands keep pushing traffic to the Facebook/Twitter pages instead of their own pages? They should create dynamic interesting content on their main pages and use social media to push traffic towards it instead of using social media as a goal.
Ownership of your following is really important and at the end of the day the only way to do that is to have a proper standalone website.
He has a great point. It takes resources to build up an audience anywhere, and then the assumption is generally that once you have that audience you've gained the right to speak to it. Facebook expects you to pay to build your audience (via ads) and then again to speak to it (via "reach"). This makes it a pretty bad idea to spend resources on building an audience there.
Will Twitter do something like this? I don't think so. But it's also a crapshoot whether your tweet will actually be seen or too far down your tweet stream for someone to actually see it. I still believe that email marketing is The. Best. place to build an audience because you have permission to send a message to someone that is almost guaranteed to at least have its headline read.
Of course the rules of the road apply wherever you build an audience, meaning you can't spam or abuse the privilege to talk to them. But all things being equal, owning the channel has some HUGE advantages.
As with all new ad platforms you have to test the ROI. Apparently in his businesses he didn't see the benefit and did what all good marketers would do, pull your inventory. As Facebook tweaks it's EdgeRank Algo I am sure they will figure out how to get the most "bang for the buck". If not their stock price will continue it's slide.
I don't know the FB advertising system inside & out either but like Cuban, I'm miffed by this. The implication here is that companies essentially don't own their own "likes." What value do they have outside of being a vanity metric if you can't reach them aside from coughing up thousands of extra dollars?
They don't own their "Likes"! Has that ever, even for one single moment, really been in doubt? Facebook owns the platform. You play in their sandbox, you follow their rules. They own all the toys.
Look at Twitter locking down their API or Apple inconsistently enforcing arcane app store rules. When someone else owns the platform, they effectively own anything you create with it.
Why not use all social networking avenues? I use Instragram, Tumblr, and Twitter alongside Facebook, but even without paying anything on Facebook, I get views and interaction from users that I wouldn't get if I said "fuck it" about Facebook.
My impression from the article is that's what he's doing. He's still going to use FB, just de-emphasize it as the main source for fans to follow the Mavs.
[+] [-] glesica|13 years ago|reply
We're free-marketeers, right? Prices allow scarce resources (eyeballs, users are the product, remember?) to be rationed in an efficient manner. Would he prefer some nameless, faceless bureaucracy determine who gets to see his messages?
This is a commons problem on some level. Very similar to the issue with push notifications written about elsewhere. Too many companies used Facebook as a way to get around email spam filters, and now everyone (good actors included) is suffering.
Cry me a river.
[+] [-] arron61|13 years ago|reply
What if Twitter implemented something like this where certain tweets from a person you are following do not appear? How would that feel?
This strikes me totally as a money play and not for the user.
[+] [-] merlincorey|13 years ago|reply
> The right price is to charge an upfront fee for brands. In the current system there is complete uncertainty on the cost. And even worse, at least for our size brands, you have to deal with the pricing for each posting, which is a time waster."
> "I'm just suggesting that a single upfront fee or a monthly fee where there is certainty of cost would allow brands to focus on bringing in consumers to like the brands knowing that they can always reach everyone that likes them. I don't know what that number should be."
He's voting with his feet - like any of us would tell others to do - and saying without more sane pricing, he's looking elsewhere. Good riddance is a bad strategy for long term customer growth, methinks... but I'm not a business person.
[+] [-] ovi256|13 years ago|reply
As arron said, the relation between you and the brand can and should be moderated by you. Furthermore, just because a monetary transaction is involved doesn't mean it's a free market at all. Facebook is the faceless bureaucracy you rant against when it's trying to gate brand communications like this.
[+] [-] imjk|13 years ago|reply
This is simply a weak excuse given by Facebook to charge brands, which they have every right to do. But to say their motivation is to stop spam is simply dubious.
[+] [-] pnathan|13 years ago|reply
Now he's having to pay extra to make sure I get updates? There are other systems out there that we can use to maintain the "interested party" connection, e.g., twitter, email, rss feeds, g+, $your_system_here.
[+] [-] ryguytilidie|13 years ago|reply
[+] [-] fkdjs|13 years ago|reply
[+] [-] edgesrazor|13 years ago|reply
[+] [-] mitchi|13 years ago|reply
[+] [-] nsns|13 years ago|reply
There might be a huge opening here for a "companies only" facebook clone, where you can only get updates from your favorite brands and service providers, not socialize with friends.
[+] [-] jopt|13 years ago|reply
[+] [-] jonursenbach|13 years ago|reply
Isn't this just Twitter?
[+] [-] ryangilbert|13 years ago|reply
[+] [-] AJ007|13 years ago|reply
The more a particular company or service (or musician for that matter) deviates from the original product that attracted its user base in the first place, the greater its susceptibility to clones becomes.
I think all people want is simple and private social networking among their friends.
Facebook no longer offers this. Google+ certainly never did. There is a strong case that Myspace fell because at the time, Facebook offered more simplicity and more privacy.
Myspace was being deluged by spam during the summer of 2008 and that marked the beginning of the end for them ( http://www.google.com/trends/explore#q=facebook%2C%20myspace... ) Facebook is becoming equally noisy, except they are getting paid for the "spam."
As Facebook continues to aggressively attempt to increase its monetization, both on desktop and mobile, I think its going to get worse.
There is clearly an opening for a competitor coming along. I'd like to think of them as the Dropbox of social networking.
[+] [-] imjk|13 years ago|reply
[+] [-] colmmacc|13 years ago|reply
[+] [-] xxbondsxx|13 years ago|reply
Every time someone says this in a HN thread, dozens of people respond with cute anecdotes about how great their experience is, but this place is like an echo chamber. If you actually go out and get the public _perception_ of G+ it's quite negative.
I mean Vic got his big G+ talk at I/O completely cut off for the sake of another product. That should show you the shift in Larry and Sergey's priorities
[+] [-] josefresco|13 years ago|reply
[+] [-] zalew|13 years ago|reply
[+] [-] pejoculant|13 years ago|reply
[+] [-] bluetidepro|13 years ago|reply
Think of when you go to an NBA game and they give out some sort of "freebie". I would imagine those game "freebies" cost much more than $3000, and regardless of that, with Facebook you are potentially reaching the 1M+ fans where as those game "freebies" might only be handed out to a measly 5K. It seems like a no-brainer to use Facebook to reach 1M+ fans at that price, vs what they traditionally pay for other forms of marketing.
Also, you could easily be selective on what sort of post validates for a $3K (post) promotion. Not all posts are worth promoting to every one of your fans, doing so would just weaken the brand image (in my eyes).
[+] [-] spinchange|13 years ago|reply
[+] [-] pgeorgi|13 years ago|reply
I guess any kind of prepaid arrangement (with some reasonable quotas, or upfront costs + small price per post) would be more manageable.
[+] [-] at-fates-hands|13 years ago|reply
[+] [-] josefresco|13 years ago|reply
[+] [-] mvkel|13 years ago|reply
[+] [-] macspoofing|13 years ago|reply
[+] [-] chaseadam17|13 years ago|reply
Let's play worst case scenario here - Cuban convinces all companies to leave Facebook. Then what? Do you honestly think there would be a mass diaspora of users because all the companies left? Hell no. Sure, Facebook's stock would plummet, but they'd still have options, because as long as Facebook has users, it has a future.
Now, let's reverse the scenario. All your friends leave Facebook. Then what? You leave too and so do all the companies, because after all, Pepsi doesn't hang out on Facebook to advertise to Coke. If the people leave, Facebook dies.
Facebook isn't a charity, nor a utopia, it's a company that is required by law to maximize value for shareholders. Facebook is already a master of providing value, they've built an empire by doing so. Now they have to learn how to extract value, and it's very smart of them to begin by extracting value from companies in a way that doesn't significantly impact user experience.
But this is just the beginning. Soon, Facebook will begin extracting value from people in more obvious ways. And I'd bet the #1 question on Zuckerberg's mind right now is, "How much shit will people take?" How many ads until everyone leaves?
I don't know the answer to that, but judging by how much shit is forced down the throat of an average American during a 30-minute episode of MTV cribs, I'd bet we'll take a lot more than we realize.
[+] [-] jrwoodruff|13 years ago|reply
Did they all think this was free advertising, forever? FB is (at least now) a publicly traded, 'walled garden' after all, and Twitter isn't much different.
Looks like the social media revenue model is becoming clear: All your customer are belong to us, pay up.
[+] [-] radicaldreamer|13 years ago|reply
You can run around in circles moaning about how it isn't "fair", but it isn't the Mark Cuban who built the infrastructure or attracted the users with a core product on Facebook. Secondly, Facebook never guaranteed 100% reach, I'm not sure why Mark Cuban expects it (and for free!).
[+] [-] jivatmanx|13 years ago|reply
[+] [-] s_henry_paulson|13 years ago|reply
This is a hedge against the unlimited patent exposure all the companies I have investments in face. Patent risk is impossible to quantify. It's unrealistic for most small to medium businesses to have any clue which patents they are at risk over. Vringo's IP from the merger is the flip side of that risk and offers an imperfect hedge. So, I made the investment.
http://www.forbes.com/sites/ericsavitz/2012/04/17/cuban-says...
[+] [-] jasonkolb|13 years ago|reply
[+] [-] waterside81|13 years ago|reply
[+] [-] joeblau|13 years ago|reply
I think this mindset is the poisons venom in Facebook's revenue strategy. Facebook is seen as just a social network and not a legitimate communication or advertising platform like TV, radio, or mobile phones. Cuban has no problem paying for Ad's on Radio and TV, but is appalled when Facebook charges for a similar (And arguably more accurate) service. Facebook's response also makes little logical sense--On one hand they say the fees are to fight spam, but the screen clearly shows that the fees are to communicate with more people.
[+] [-] loceng|13 years ago|reply
[+] [-] eliza1wright|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] neutronicus|13 years ago|reply
[+] [-] executive|13 years ago|reply
FB has a massive supply of impressions which has bottomed-out remnant/auction CPM rates industry wide.
I see this as a move to try and introduce a (somewhat) premium ad product. Users have already indicated interest in the brand -- now they will have to pay to reach these intenders.
[+] [-] parka|13 years ago|reply
When I subscribe to a page, I expect to get updates on new postings.
Because Facebook is using their EdgeRank to filter out those postings, I'm no longer get updates on all the postings. As such I've to go to the subscribed page manually.
No wonder I'm getting so few updates lately. Because Facebook is filtering out everything. How backwards is that?
[+] [-] dlapiduz|13 years ago|reply
Ownership of your following is really important and at the end of the day the only way to do that is to have a proper standalone website.
[+] [-] jasonkolb|13 years ago|reply
Will Twitter do something like this? I don't think so. But it's also a crapshoot whether your tweet will actually be seen or too far down your tweet stream for someone to actually see it. I still believe that email marketing is The. Best. place to build an audience because you have permission to send a message to someone that is almost guaranteed to at least have its headline read.
Of course the rules of the road apply wherever you build an audience, meaning you can't spam or abuse the privilege to talk to them. But all things being equal, owning the channel has some HUGE advantages.
[+] [-] antonioevans|13 years ago|reply
[+] [-] bmac27|13 years ago|reply
[+] [-] glesica|13 years ago|reply
Look at Twitter locking down their API or Apple inconsistently enforcing arcane app store rules. When someone else owns the platform, they effectively own anything you create with it.
[+] [-] mamoswined|13 years ago|reply
[+] [-] RobAtticus|13 years ago|reply
[+] [-] cpeterso|13 years ago|reply