The Unexpected Failure Of Facebook

Just when we thought Facebook might have been turning a corner, it is clear now that this is one dog that does not want to learn new tricks.


While 2.8 billion people have an obsession with Facebook’s products, I have a different obsession with Facebook. As a business leader in the digital media industry, one has to pay attention to Facebook and frankly can draw inspiration from their ad products, which we have at Polar. However my obsession with Facebook runs much deeper.


At the start of the pandemic, I picked up Viktor Frankl’s Man’s Search For Meaning. He says, “Ultimately, man should not ask what the meaning of his life is, but rather he must recognize that it is he who is asked.”


In this quote lies the struggle at the root of Facebook’s problems. Zuckerberg is continually struggling to explain that the means justify the mission. In his case, a mission of connecting the world and giving everyone a voice. The irony is that what Facebook has done remarkably well is to connect their world, including staff, clients, shareholders and governments, in a constant hum of anti-Facebook feelings. The hum has gotten louder.


The world is full of problems right now and we need resource rich organizations to invest in solving them, not creating more of them. Facebook is rich in financial resource, human resource, computing resource and most importantly, data resource.


What the world is asking of Facebook is not to connect us. It is not to build addictive, I mean engaging, products. It is not to deliver advertiser ROI. The world is asking Facebook to be a model platform, a force for good, to set a higher standard and to inspire us with what is possible with technology and talent.


Instead what we are witnessing is the failure of Facebook, one that even Zuckerberg with access to the world’s data, did not expect. This is not a financial failure. It is not a product failure. It is not a client failure. It is a moral failure.


Big businesses normally fail where there is a failure of their products to continue to meet the demands of their clients. IBM would be an obvious big tech example. When was the last time your business bought something for IBM? Blackberry would be another one. They were just removed from the stock market index for not having enough value and trading volume. Closer to our industry, print newspapers, who came into digital two decades ago but only now are getting behind a business model that values their content fairly.


Facebook is not a failure because of any product shortcomings. Their product appears to work just fine. I guess when you sell an addictive product, and get your customers hooked, you are set. What is the difference between the big tobacco companies of the twentieth century and the big tech companies of the 21st century? Both industries offer products that are highly addictive. Both industries have power and influence to keep government regulators at bay. Both industries have incredible profit margins. And both industries offer products that may cause harm.


If you smoke, your risk of lung cancer is 23 times higher than if you do not smoke. Smoking increases the risk of at least 15 different types of cancer. Teens who use social media excessively have 71% increase in suicide risk factors than those that don’t. Those who visit social platforms frequently are three times more likely to feel socially isolated from those that do not. Like big tobacco, Facebook too has had a clear moral failure.


Facebook staff have recently staged walkouts and publicly shamed leadership because of their decisions. The issue from staff is not about pay, working conditions, manager expectations, harassment or other issues that are typical labour concerns. If there was a Maslow's Hierarchy of Needs for staff, Facebook has delivered the basics for their staff remarkably well. There are higher expectations on the business now though. Staff expect the business to act in a moral and ethical manner.


Facebook advertisers, like REI, North Face, Upwork and Patagonia, have all pulled ad spend from the platform as part of a Stop Hate For Profit campaign. Expect hundreds of advertisers to follow in the coming week. What we see here is that the advertisers are not pulling spend because of product failures, like brand safety, lack of transparent measurement or data violations, all previous product failures that Facebook has taken some actions on. They are pulling spend because of Facebook’s moral failure.


The ask to be a moral institution is a tall order, one that I'm afraid Mark and Sheryl may not be cut out for. Zuck may be great at building addictive, I mean engaging, products and Sheryl may be the best of them all at selling advertising to 10 million businesses, but building an institution that can act as a role model for the world and connect with a higher purpose in society is a different act altogether.


Where Zuck and Sheryl lead in the domains they are qualified and skilled to lead in, they desperately lag in this new domain, a higher domain. I even feel some empathy for the position that they are in, being asked to do something they clearly do not know how to do.


Now I am sure that we will see Facebook make changes in the coming months, however the fear I have is that these changes are not for the right reasons. They are to appease staff, win back client trust and keep regulators at bay, not because Facebook fundamentally believes that they are the right things to do.


Growing up, my father would often say to my sister and I, “what is good is not always right, and what is right is not always good”. Facebook has a history of doing what is good, often at the expense of what is right. This is the unexpected failure of Facebook.


Relevant References: Stop Hate For Profit, CNBC, AdExchanger.

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