Facebook is more than a fun place to stalk people: It’s a history of my life, and the basis of my social life. I plan just about every organized social activity on it—in fact, I would have a hard time throwing a party or even just finding things to do on the weekend without it.
This is True
The above quote is pulled from Simone Foxman’s recent Quartz article, “Facebook is a goldmine in the making.” I think Simone nails the reason why Facebook isn’t going anywhere, but both she and her colleague, Chris Mims, who wrote the counter argument, “Why Facebook will never make a significant profit,’ miss what I think will be the main source of Facebook’s revenue in the future, retail.
Why dabble in a $30 million dollar advertising market instead of tackling a $200 million dollar Ecommerce market? Answer: There is no good reason to. Facebook has already dumped a good chunk of its inventory into an ad exchange, automatically cheapening the rest of its shit ad inventory, but making its remnant inventory easier to sell without a direct sales rep. This is happening as the company takes baby steps into the Ecommerce world. Gifts are just the beginning and, even if not a cash cow right now, remember, Facebook will be sticking around for a while. Sooner or later, Facebook will figure Ecommerce out.
In 2016, the digital advertising industry is expected to be a $55 million dollar industry while Ecommerce is expected to hit $361 million. If you’re Zuck, the decision as to which one to focus on is easy. We should all expect to see Facebook change to facilitate that move, and yes, they’re going to make plenty of money because of it.
Most critically, no advertising will be getting in the way. The decision on advertising was the hardest, because obviously it provides a vital revenue stream for almost all media products. But we know from your emails how distracting and intrusive it can be; and how it often slows down the page painfully. And we’re increasingly struck how advertising is dominated online by huge entities, and how compromising and time-consuming it could be for so few of us to try and lure big corporations to support us. We’re also mindful how online ads have created incentives for pageviews over quality content.
The Advertising Portion of Andrew Sullivan’s “We’re Going Independent” Post
There will be no advertising, at least in the onset. A bold component to a bold move by Sullivan and co.
A historical tidbit: the original business model for Gizmodo was affiliate fees from purchases of gadgets through Amazon. We didn’t have the scale then to make that work. We do now. In December we made $70,000 from Amazon. Without really trying. No seriously, it was an accident.
Gawker Moves Towards a New Business Model, Makes $70,000 Dollars In One Month Without Even Trying
In a memo to ‘All Staff’ yesterday afternoon, Gawker founder Nick Denton advised the company of a number of changes. The meat of the message is that Gawker is determined to seek revenue outside of the traditional banner ad model. Said Denton:
We expect that the banner ad business will be supplanted by our content services and content-driven commerce
One example given by Denton, which is quoted above, is that Gizmodo was able to make $70,000 dollars in December from Amazon affiliate fees.
Editorial concerns aside, if Gawker can change its business to be primarily reliant on affiliate fees and content services, it’s a big deal.
Someone is going to have to find a better business model what’s in place now. And Gawker, ever pushing the envelope, has as good a chance as anyone out there.
Yesterday, the New York Times took on New York City’s Health Department over a potentially misleading ad. The ad, shown above, and portrays an obese man with an amputated leg (ostensibly due to his weight induced diabetes), and is meant to urge New Yorkers to eat less. But, as the Times points out, the man featured in the picture is not an amputee at all. His leg was amputated, reports the Times, not by a doctor but by photoshop.
City bigwig (boy, do I love that phrase) Howard Wolfson took issue with the fact that the times felt compelled to write about this false portrayal and took to Twitter looking for a confrontation. He got one, courtesy of Times’ Metro Editor Carolyn Ryan.
I thought it would be interesting to post the Twitter spat in one place, so here it is. Do you agree with Ryan, who says the Health Department derives its power from the perception that the victims in its ads are real. Or, do you agree with Wolfson, who argues that since the correlation between sugar drinks and obesity and diabetes is a fact, it’s ok to portray it any way the City wants.
Not an easy question, but an interesting debate if you ask me.
Still waiting for @NYTMetro to answer if folks in Times ads are actors and if they are whether that says anything about the product/message.— howard wolfson (@howiewolf) January 25, 2012
. @carolynryan story was more focused on ads integrity than efficacy - yet correlation btwn sugar drinks and obesity/diabetes is a fact— howard wolfson (@howiewolf) January 25, 2012
@howiewolf Of course. The photo suggests- vividly - if you drink soda, you lose your leg. Turned out city-not diabetes-sawed off guy’s leg.— carolynryan (@carolynryan) January 25, 2012
My grandmother lost a leg to diabetes.She would not have appeared in an ad. Doesn’t make her loss less real to have it depicted by another— howard wolfson (@howiewolf) January 25, 2012