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If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate re

If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. Most people likely don’t remember this, but Facebook ads were a joke among the marketing community when they were first introduced. I’d have to find it, but one study produced before the Facebook pixel was introduced showed that less than 6% of Facebook advertisers had any kind of ROI from their Facebook ad spend. The pixel is one of a handful of things they created that turned this around - all of a sudden, people saw ads for things they were already interested in. If the pixel is effectively gone, much of Facebook’s revenue will go with it. The recent upheaval over privacy didn’t make me worry about Facebook’s future or the stock price. Revenue was still coming in, and as Eric Schmidt says, “revenue solves all known problems” [1]. But this marks the beginning of Facebook’s end as a cash cow. What does a post-revenue Facebook look like? I would short the stock - now. [1] https://twitter.com/ericschmidt/status/507219358246903809?s=21 https://twitter.com/ericschmidt/status/507219358246903809?s=...

tripzilch 8y ago
> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. That's what he meant when he said it will worsen your experience right? :-)
ttul 9y ago
What choice did they have? Either do this or be regulated and forced to do this.
- ttul 9y ago
  Said another way: when you become successful enough, the government becomes a stakeholder in your business.
  - oblio 9y ago
    Looking at the 2008 crisis debacle and “too big too fail”, maybe it wouldn’t be that bad. If your company has an impact on the level of a public utility, maybe it should be regulated like one. And God knows that Zuckerberg’s lifestyle wouldn’t change much if he was only a “simple” billionaire instead of a multi-billionaire ;)
    - ttul 9y ago
      I imagine regulation is coming. If not specifically for Facebook, then changes in privacy law in the US to edge closer to what the EU enjoys are forthcoming as soon as the US elects a Democratic House.
      - downandout 9y ago
        The US is a capitalist country. It will see how much negative impact the GDPR has on businesses and consumer choice, as websites block EU traffic in droves, and will not make that same mistake.
        oblio 9y ago
        All developed countries are capitalist. And I really want to see how many websites block EU traffic :)
        downandout 9y ago
        Let’s not even go down this road, it has been the source of very long discussions. I’ll just say that nobody in the US wants the liability of EU traffic under GDPR except for very large companies with expensive legal teams.
  - TeMPOraL 9y ago
    That follows from "successful enough" meaning impacting a large fraction of society in some way - which is the government's area of competence. So they definitely will be interested in your impact, and whether or not your market-driven priorities are at odds with well-being of society.
djhworld 9y ago
> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. They'll make the "Clear History" feature a multi step process that's tucked away in a configurations pane, miles away from what the common user will seek out and use on a regular basis.
- tripzilch 8y ago
  Also, for "technical reasons", using the feature will somehow result in FB Events no longer working properly. And, like this article does, they'll randomly pop up Zuckerberg's face at you.
iknowstuff 9y ago
I respectfully disagree. Very few people will ever clear their history.
- downandout 9y ago
  Which is why I used the caveat “if a significant percentage of users” do this. If not then fine, but if they do, I don’t think it’s an exaggeration to say that we can all say goodbye to Facebook. That’s how big of a problem this would cause. They apparently announced that they’re getting into online dating today. Maybe the plan is to knowingly decimate the ad platform and charge for dating at some point. They’ll have massive layoffs and have to sell datacenters, but could at least keep the lights on for a few remaining employees managing the dating service.
- JMCQ87 9y ago
  The paragraph literally starts with "if"...
  - iknowstuff 8y ago
    And then the author goes on to say "I would short the stock now".
aylmao 9y ago
My understanding is user activity and user data are distinct, and I'd imagine by now Facebook has enough user data that this might not be as huge a concern as when they were getting started.
- downandout 9y ago
  No. They announced that people can remove themselves from the custom audiences created by the Facebook pixel. No custom audiences, and the effectiveness of Facebook ads drops dramatically along with Facebook ad revenue. The pixel has become standard operating procedure in most marketing plans and conversion funnels. Many companies lose money on initial traffic acquisition but make it back plus a profit through retargeting. That ability would be gone.
tetrep 9y ago
> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. I don't think it would have a significant negative impact on Facebook at all. I see the value of ad networks as primarily resulting from two features: Having a large audience (network), and knowing the audience well (targeted ads). Facebook will still have a large audience if people keep using it, even if they all delete their information, so a large audience is a given. Knowing an audience has two large pieces, identity (i.e. you're user X) and derived identity data, i.e. people interested in HN are interested in tech. The biggest use of all this data is associating users together. If all my data across all the internet was deleted immediately, I bet Google et. al would be able to uniquely identify me within a few days, they wouldn't know I'm the same person whose data was just deleted, but they'd know a wealth of targeting information about me again, and within a few years I'd bet they'd know me just as well as they do now. My web usage is pretty routine, and humans in general are pretty routine, so I would expect it to generally hold that, without explicit effort to the contrary, we'd all be pretty easily re-identified (at least as much as advertisers are concerned) after deleting our information, and sure, I won't be searching for that exact search query because now my git-fu has improved, but I'm still going to be doing things that identify me as someone interested in and/or using git. Facebook is going to keep all the derived data from people, and that data is going to allow them to very easily re-target anyone once they have a good feel for what their interests are. And I can't imagine a more transparent display of interests than activity on a social network, it's almost explicitly interest-bound.
- downandout 9y ago
  I don't think it would have a significant negative impact on Facebook at all All I can tell you is that Facebook had a large audience before the pixel, and few advertisers were able to generate ROI from Facebook ads. Now he is suggesting that we will return to this state. Showing irrelevant ads to people based upon basic things - like being one of 150 million people that like Coke’s Facebook page - just flatly doesn’t work.
  - tetrep 9y ago
coolspot 9y ago
We need browser extension that clears facebook history every 15 minutes.
- downandout 9y ago
  If that gained widespread use, you wouldn't need it anymore because Facebook wouldn't have enough revenue to keep their servers running.
- jakecopp 9y ago
  I would be happy to donate for such an extension after the feature ships!
visarga 9y ago
> It will decimate revenue. So it will remove a tenth of the revenue? (decem = "ten")
- downandout 9y ago
  Huh? I did spell it correctly. dec·i·mate /desəˌmāt/ verb 1. kill, destroy, or remove a large percentage or part of. "the project would decimate the fragile wetland wilderness"
  - jcbrand 9y ago
    The OP is pedentically referring to the original Roman use of the word, which mean to kill/remove a tenth. Nobody uses the word in that way anymore, but some people want to show how clever they are, so they bring it up.

tripzilch 8y ago

> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. That's what he meant when he said it will worsen your experience right? :-)

ttul 9y ago

What choice did they have? Either do this or be regulated and forced to do this.

ttul 9y ago
Said another way: when you become successful enough, the government becomes a stakeholder in your business.
- oblio 9y ago
  Looking at the 2008 crisis debacle and “too big too fail”, maybe it wouldn’t be that bad. If your company has an impact on the level of a public utility, maybe it should be regulated like one. And God knows that Zuckerberg’s lifestyle wouldn’t change much if he was only a “simple” billionaire instead of a multi-billionaire ;)
  - ttul 9y ago
    I imagine regulation is coming. If not specifically for Facebook, then changes in privacy law in the US to edge closer to what the EU enjoys are forthcoming as soon as the US elects a Democratic House.
    - downandout 9y ago
      The US is a capitalist country. It will see how much negative impact the GDPR has on businesses and consumer choice, as websites block EU traffic in droves, and will not make that same mistake.
      - oblio 9y ago
        All developed countries are capitalist. And I really want to see how many websites block EU traffic :)
        downandout 9y ago
        Let’s not even go down this road, it has been the source of very long discussions. I’ll just say that nobody in the US wants the liability of EU traffic under GDPR except for very large companies with expensive legal teams.
- TeMPOraL 9y ago
  That follows from "successful enough" meaning impacting a large fraction of society in some way - which is the government's area of competence. So they definitely will be interested in your impact, and whether or not your market-driven priorities are at odds with well-being of society.

djhworld 9y ago

> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. They'll make the "Clear History" feature a multi step process that's tucked away in a configurations pane, miles away from what the common user will seek out and use on a regular basis.

tripzilch 8y ago
Also, for "technical reasons", using the feature will somehow result in FB Events no longer working properly. And, like this article does, they'll randomly pop up Zuckerberg's face at you.

iknowstuff 9y ago

I respectfully disagree. Very few people will ever clear their history.

downandout 9y ago
Which is why I used the caveat “if a significant percentage of users” do this. If not then fine, but if they do, I don’t think it’s an exaggeration to say that we can all say goodbye to Facebook. That’s how big of a problem this would cause. They apparently announced that they’re getting into online dating today. Maybe the plan is to knowingly decimate the ad platform and charge for dating at some point. They’ll have massive layoffs and have to sell datacenters, but could at least keep the lights on for a few remaining employees managing the dating service.
JMCQ87 9y ago
The paragraph literally starts with "if"...
- iknowstuff 8y ago
  And then the author goes on to say "I would short the stock now".

aylmao 9y ago

My understanding is user activity and user data are distinct, and I'd imagine by now Facebook has enough user data that this might not be as huge a concern as when they were getting started.

downandout 9y ago
No. They announced that people can remove themselves from the custom audiences created by the Facebook pixel. No custom audiences, and the effectiveness of Facebook ads drops dramatically along with Facebook ad revenue. The pixel has become standard operating procedure in most marketing plans and conversion funnels. Many companies lose money on initial traffic acquisition but make it back plus a profit through retargeting. That ability would be gone.

tetrep 9y ago

> If a significant percentage of users actually exercise this option, that will be the end of Facebook as a significant channel for ad spend. It will decimate revenue. I don't think it would have a significant negative impact on Facebook at all. I see the value of ad networks as primarily resulting from two features: Having a large audience (network), and knowing the audience well (targeted ads). Facebook will still have a large audience if people keep using it, even if they all delete their information, so a large audience is a given. Knowing an audience has two large pieces, identity (i.e. you're user X) and derived identity data, i.e. people interested in HN are interested in tech. The biggest use of all this data is associating users together. If all my data across all the internet was deleted immediately, I bet Google et. al would be able to uniquely identify me within a few days, they wouldn't know I'm the same person whose data was just deleted, but they'd know a wealth of targeting information about me again, and within a few years I'd bet they'd know me just as well as they do now. My web usage is pretty routine, and humans in general are pretty routine, so I would expect it to generally hold that, without explicit effort to the contrary, we'd all be pretty easily re-identified (at least as much as advertisers are concerned) after deleting our information, and sure, I won't be searching for that exact search query because now my git-fu has improved, but I'm still going to be doing things that identify me as someone interested in and/or using git. Facebook is going to keep all the derived data from people, and that data is going to allow them to very easily re-target anyone once they have a good feel for what their interests are. And I can't imagine a more transparent display of interests than activity on a social network, it's almost explicitly interest-bound.

downandout 9y ago
I don't think it would have a significant negative impact on Facebook at all All I can tell you is that Facebook had a large audience before the pixel, and few advertisers were able to generate ROI from Facebook ads. Now he is suggesting that we will return to this state. Showing irrelevant ads to people based upon basic things - like being one of 150 million people that like Coke’s Facebook page - just flatly doesn’t work.
- tetrep 9y ago

coolspot 9y ago

We need browser extension that clears facebook history every 15 minutes.

downandout 9y ago
If that gained widespread use, you wouldn't need it anymore because Facebook wouldn't have enough revenue to keep their servers running.
jakecopp 9y ago
I would be happy to donate for such an extension after the feature ships!

visarga 9y ago

> It will decimate revenue. So it will remove a tenth of the revenue? (decem = "ten")

downandout 9y ago
Huh? I did spell it correctly. dec·i·mate /desəˌmāt/ verb 1. kill, destroy, or remove a large percentage or part of. "the project would decimate the fragile wetland wilderness"
- jcbrand 9y ago
  The OP is pedentically referring to the original Roman use of the word, which mean to kill/remove a tenth. Nobody uses the word in that way anymore, but some people want to show how clever they are, so they bring it up.