Demonization of Facebook is now mainstream. And because readers of this site are privacy-conscious, we have previously discussed – without judgement – both the data that Facebook collects and how to minimise that data collection. Today, I read this:
Niche products and publications… can build sustainable businesses with customers across the entire world who have nothing in common except a shared interest in the product or publication in question; or, to put it another way, customers who “lookalike”. That’s the thing about Facebook and other digital advertising companies: they are just as essential a part of growing the GDP of the Internet as are Stripe and Shopify and other companies with universal approval ratings. It is no good to be capable of serving anyone anywhere if they can’t find you.
– Privacy Labels and Lookalike Audiences, Stratechery by Ben Thompson
The post itself is in the context of Apple’s requirement of privacy labels for iOS Apps. But it makes the following point: while those who are conscious of their privacy and their attention may be careful of their use of social media and may avoid Facebook, it is perhaps the most important distribution channel that small businesses have. It is their very data collection that makes (ostensibly) precise targeting possible. If one takes that away, then the business with the biggest advertising budget wins.
The same holds true with regard to Google and discovery through search:
This post from First Round Capital makes the case that a small direct-to-consumer business only really has three ways to sustainably achieve scale: performance marketing, content marketing/SEO, and referrals/virality. While Facebook and Instagram, along with Google’s AdWords, draw the bulk of performance advertising budgets, Google dominates discovery through its search engine. And has done so for nearly twenty years now.
Just like with Facebook, it is because of the vast amounts of data that Google collects about you that a business can reach you precisely through search results on a browser or via Google Assistant or in its personalised news feed in your Google app.
Presence of all sorts – content, commerce, community – has been democratised on the Internet, but discovery of all that is today highly centralised.