Are We at Peak Facebook? (Part 2)

In last week’s post, we talked about how Facebook exists in a moment in time, and how its existence is ephemeral just like any other digital asset. This week, we will talk a little about whether Facebook is indeed the villain that publishers think it is. Many publishers bemoan the fact that Facebook has aggregated all their traffic and that their websites are lonely and unvisited, and their advertising revenues down. But we believe that publishers would be in just as much trouble without Facebook.

If you think about the last two decades of publishing, you will see that pointing the finger at Facebook is misguided. What changed the game for publishers wasn’t Facebook, it was the internet itself. Think about it: before the internet, people got their news from a newspaper, and that newspaper was local, drawing a local audience. Although USA Today purported to be a national newspaper, its circulation consisted mainly of tourists and business travelers who received it gratis in their hotels. The average American wasn’t even interested in national news, let alone international news.

Although TV opened up the audience for national and international news during the 70s, it did so with local affiliates of national networks. In short, much of advertising was still local, except for the major brand ads. Competition for audience was among the three affiliates in your city of the three big networks.

However, once the internet came along, every newspaper and TV station was immediately thrust into competition with every other newspaper and TV station in the world for both “eyeballs” and ad dollars. News became a true competitive business, because consumers could now get news from anywhere, and advertisers no longer had to buy only local audiences. They could buy international audiences, or niche audiences, or any audiences they wanted.

None — repeat none — of the formerly local publishers of news and information were structured for international competition. Even the big TV networks were slow to realize that they were not competing against two other networks each, but rather every source of news on the planet. And they spent the first five years of the internet’s existence pushing back at it, hoping it would go away. They never rethought their print strategy; they merely copied the newspaper on to the web.

But the advertisers figured it out before the publishers. The advertising dollars were slowly lost well before Facebook ever existed, first to Craigslist and then to online shopping. Newspapers were folding before Mark Zuckerberg got to Harvard. Legacy media infrastructures weren’t set up for the speed, diversity, and low-cost alternatives on the internet. And that’s where the ad wars were lost.

Facebook is just the latest in a series of hints to publishers that they can’t run their businesses as they formerly ran them, that they can’t blame an outside force for their failure to adapt quickly enough, and that they have to re-think their value propositions constantly to see if their visitors still find them worth the time. Because the new resources in short supply are audience and attention, not news sources. The internet flipped the publishing business on its head, and Facebook is only the most recent messenger.