Should Facebook Look For Monetization Opportunities Aside From Advertising?

By Guest Writer 

In the past few weeks and months, I have seen a clear quality decrease in my news feed. With the number of sponsored stories growing like crazy and the need by Facebook to earn money from its platform, this has gotten to a level where I think it is getting very dangerous now.

As the general number of posts is increasing and the space is limited, the EdgeRank algorithm also pushes up posts that have high engagement but are not certainly of high quality for me. To optimize visibility, many brands try to generate as many interactions as possible, with the effect that most of the content is nonsense and far away from the brand itself or its message. As the technology is not far enough along to determine the relevance and quality of the content itself, everything lies in the hands of the social media managers creating that content. And with some wrong incentives set (getting engagement for the pure reason of being visible), this generates a problem.

The root of the problem for me lies in the different goals of users and brands. Brands have the goal of generating new fans and customers and optimizing and maintaining their relationships with existing ones. Users want to have an easy way to communicate with their network and also brands, but in a limited, self-determined way.

Do you think Facebook can remain a platform that balances these goals, while still keeping everyone satisfied? It has done a great job, and the problem is not a Facebook problem, but the social network is facing it first due to its large user base. For me, the balance works now, but will it be possible to keep this?

I don’t know the internal numbers, but my question is: Wouldn’t be better for Facebook in the long term to earn its money in other verticals, rather than pushing forward the monetization of the central parts of its platform?

Yes, the ads on Facebook are more relevant for me than those I can see it on any other site, but it still feels a bit annoying, and I just don’t feel comfortable. From my personal perspective, and under the assumption that users are not willing to pay for such a service, social networking was always something that I think is very hard to monetize out of itself and on-site advertising without risking the loss of users. Isn’t it better to use generated reach and earn the money in other areas? Facebook could, for example, go into selling/renting movies, mobile phones, or many other things.

Am I alone thinking that it’s getting to be too much? What should Facebook do to maintain the quality level for users while still satisfying brands, earning enough money to create a highly profitable business, and performing according to its shareholders’ expectations? What would be good areas for Facebook to move into with its overwhelming user base?

Don’t get me wrong: Facebook has done an amazing job building up this platform. I am just feeling that something is getting out of balance.

Readers: What do you think? Do you have the same impression, or is everything running perfectly as it is now?

Alexander Peiniger is the co-founder and CEO of AllFacebook Stats.

Image courtesy of Shutterstock.