Meta Myths
stratechery.com
stratechery.com
The article is right to point out that Meta has by far the largest and most sophisticated ad targeting and tracking system in the market. The problem is that even if you don't count Apple's ATT the window of places where they can use it is getting smaller: Facebook the app is a shell of its former self, WhatsApp is un-monetiseable despite a lot of attempts to get companies to pay directly to talk to other users, and new acquisitions are impossible in this post-Obama era. Instagram is growing, but mostly in countries with relarively low ad spending levels.
And there comes the difference between this drop and the one in 2018: ads work when people want to spend money on products. The pressures of inflation, rising cost of living, and devaluation of almost every currency to the USD is putting a block in the one reliable source of income for the company.
I would bet on Meta's stock price rising if the economic and social crisis in Europe magically improves tomorrow. Otherwise, it's a matter of believing in the Metaverse and hoping the Oculus Pro becomes successful enough to at least provide another large source of revenue for the company.
That's a good "30,000 foot view" summary of how consumer advertising businesses work.
I was the biggest skeptic on earth when they bought Oculus, and assumed it was the death of VR. But they've been steadily grinding at it, and the newly released Meta Pro is, as someone with extensive experience with all of the consumer headsets, the first product that looks like an actual generational leap above the initial headsets. They are really nailing the big problems with VR, which are control (the inside-out tracked controls with Meta Pro are an industry first), and form factor ease of use.
Look at what literally every other company is doing right now. Apple's keynotes consist of new emojis and better cameras. Google I/O is literally just an ad for GCP at this point. Amazon isn't even trying to pretend they are doing anything innovative, beyond adding to the AWS hairball. I think Zuck has about a 5% chance of success here, but the fact that he's trying something new is better than anything else in tech ATM.
Why wouldn't I play Minetest, OpenTTD, or whatever other social videogame for which I can host a server myself?
I see little value in artificial scarcity coupled with complete surveillance, and awkward and expensive hardware requirements.
Would META spend $25 billion/year indefinitely without earning a profit? I don't know but other scenarios seem plausible too.
Huge citation needed. You can't just lie and will it to be true. :D
I’m all in on EV, but Tesla blew it by failing to focus on the Bolt and Leaf market. And their SWEs are now apparently spending their time solving twitters HR problems.
Maybe a better way to state it is that Tesla has been alive and independent longer than ~1895/1900 American car companies.
That is, IMO, the key question behind this entire discussion. Zuck certainly thinks so. I'm sure a lot of people at Meta and outside think so as well. And their detractors obviously don't.
There isn't going to be any consensus on whether Meta is spending too much money or not because ultimately it is a referendum on the concept of VR/AR/Metaverse itself.
Of course shareholders really want to count actual monetary returns as progress, and it's the job of the CEO to decide whether prioritizing short term gains is actually in the best interests of the company or not.
Some of us quite like it.
What? Virtual Boy was released almost 30 years ago, that's a consumer product that sold in the same ballpark as the Oculus Rift.
Or perhaps it's a huge selfish gamble thinking, let's get our product perfected before everyone realizes how big this is. This sounds like a small startup more worried about having their unknown product's secrets stolen rather than how to market it so enough know it exists.
The business angle also doesn't make sense to me. Maybe during severe lockdowns it might have had a chance, but now we should be betting on the tech and performance/price improving in service of games first and foremost.
I hope SteamVR wins, otherwise I don't care whether Apple or Meta's device wins. And where is MS in this, too late as usual?
https://arstechnica.com/gaming/2022/10/carmack-wants-a-250-v...
> As a "counterpoint" to the push for the Quest Pro in the Meta offices, Carmack says he "personally still [tries] to drum up interest internally in this vision of a super cheap, super lightweight headset." His rallying cry, he says, is a target of "$250 and 250 grams" for a headset that cuts out as many extraneous features as possible while still being usable (the Quest Pro weighs 722 grams, while the Quest 2 is 503 grams). That could help bring "super light comforts" to "more people at low-end price points."
Without experiencing Project Cambria/Quest Pro, I can still imagine the hard-to-believe-it's-not-real feeling of presence with the incremental improvements + real-time facial expressions. That does seem important to be able to demonstrate. I haven't as yet heard reviews that express this though.
Is that an amount to create an initial iPhone? While it was awesome, if it stayed like that, it wouldn't change the industry. It would seem fair to add up all the R&D costs that went into getting iPhone to where it is today, which will be much higher.
Dtto Tesla. For Apollo, we know the total.
The amount of people in the first group who are willing to pay for a device that requires you to tie every single action and usage into Meta's data-pipeline Hoover of personal information is likely near zero.
Apple tried to make the Newton happen a decade too early. It worked in the end but they did the right thing in not trying to repeatedly double down on making it work before all the pieces of the puzzle came into play (mobile networks, better touchscreens, efficient CPUs, enough storage to hold music, etc.).
But I think that's the intent. Because when you lay out Meta's strategy so naked, like Marques did, then you realize that no one is going to buy into it. You need early adopters and those are the ones that are going to sniff out that you're actually building a dystopian privacy-invading Skinner Box platform controlled 100% by Meta and they will predictably eviscerate you.
Marques brings up the part of what Meta is focusing on now, which is creating replacements for everyday functions with a VR twist. He claims some of them are actually quite good. But I think this is the way Google approached Google+. People don't want something good-as or marginally better. What Meta needs is a killer app. Something that can only be done in the Metaverse and is so compelling that people are willing to give Meta full control over their life and spend the money on the hardware. That's a tall order.
I'm less optimistic on the VR takeover, but I can imagine a future where VR headsets would be preferable to using laptops for daily use, and the same thing applies there.
I suspect this is what Apple is trying to do.
The biggest problem I have doing zoom calls with family is an unstable internet connection at their end and I don't think the metaverse is going to be able to solve that. And besides, I'm certainly not going to pay 500$ for a headset just for Awesome VR calls, if i can just use a phone call.
The biggest potential is being able to work remotely. Just imagine all the remote work Metaverse could make possible. And 500$ headset might just be in the budget for a midsized company looking to expand it's workforce.
And, maybe you can interpolate better since the domain space is human activity instead of an arbitrary video.
They've actually already cultivated these affluent users almost by accident (they aren't interested in gaming, but they are interested in fitness). But these users tend to be older even if they are richer...it isn't a demographic that Facebook was going for.
I joined to work on meta ads semi-recently. My thinking was that they were under invested in techniques I knew were successful from my time at Google.
What I found was a lot of smart people who knew they were under invested and we're capable of closing the gap, but the infrastructure they sat upon was too hard to use to do anything different, and management that rewarded the appearance of great work more than great work. The result was a lot of config changes making noise in metrics that could be read positively, without implementing the state of the art systems that took a year before you could write a fancy success workplace post about it. That would risk poor performance reviews and the shuffling of reasources away from your team as a result.
And now, it's becoming apparent that the very very smart people started leaving after the stock dropped and the replacements are both more expensive and less able to get used to Facebook's infra. The result on the ground looks like a very serious engineering death spiral that management has not signaled they understand or have a grip on.
Two reasons: 1. The management can't really differentiate appearance from substance. 2. The management is not incentivized to reward great work. Either way, it shows the failure of Meta's culture.
> but the infrastructure they sat upon was too hard to use to do anything different
Ironically, so many Meta engineers had such superficial understanding of their platforms and infrastructure that they couldn't even pass the most basic interview discussions on systems design. Seems another sign that Meta grossly over hired or had a culture that focused only on some so-called impact.
The risk of missed opportunity is harder to visualize and thus rarely considered.
From a small business customer perspective: I have a small local business that I run on the side. It's a franchise type of business like what you would see in your local strip mall. We used to get our best leads from Facebook ads. More than 90% of the clicks were mobile. A high percentage of the clicks would set a tour and a decent percentage of those sign up their kid(s) for the program we offer. We went from about 20 good leads per month to 0-1 for the same ad spend. Yes, it really was that extreme. I don't know who facebook is showing our ads to, but they do not want our product.
I just got around to canceling with the agency that handles our ad spend today. The N of this story is 1, but if other businesses are experiencing anything close to the same, fb's revenue decline is just beginning.
Meta has recently switched to a performance review cycle of 1 year (from 6 months). It sounds like one of the reasons this was done was to help make such work more possible.
However it is an optimistic sign in that leadership must get that part of the problem (long term vision is penalized) and is taking steps to address it. Maybe I judged them too harshly above; I don't know what I would do in their position to turn the ship around.
Myth 1: Users Are Deserting Facebook
..The problem with this narrative is that Meta is still adding
users: the company is up to 2.93 billion Daily Active Users
(DAUs), an increase of 50 million, and 3.71 billion Monthly
Active Users (MAUs), an increase of 60 million..
Is Meta combining DAU numbers between Instagram, Facebook, and Whatsapp? Because I'm sure those Whatsapp numbers go up and up, since it's the default method of communication in a huge number of countries.
I know that my anecdotal experience isn't necessarily reality. But it's getting hard to ignore the fact that many friends and family have essentially abandoned Facebook and Instagram, to the point that these services aren't being used meaningfully by my friends and family any more.
Maybe developing countries are still growing userbases? Or maybe Meta's "DAU" definition just doesn't capture the slippage from "hooked on the news feed" to "responds to a message once per day"?
Maybe it is users that are forced to use it to check some restaurants or likes Facebook page? And even then be annoyed about the popups...
Despite its flaws FB has done a good job of layering useful products on top of the social network despite the original purpose of Facebook seemingly losing popularity. In my circles, the typical news feed and posting updates part of Facebook is pretty much dead, and I never use those features personally anymore. BUT Marketplace, Messenger, and niche groups are all very valuable. It's changed from 'something cool' to a utility.
Also, given these DAUs are measured in billions and there are users all over the globe, chances are usage in different parts of the world and for different ages and demographics looks incredibly different.
The problem with this line of reasoning is that Meta’s
capital expenditures are directly focused on both of
the two main reasons for alarm: TikTok and ATT. That
is because the answer to both challenges is more AI,
and building up AI capacity requires a lot of capital
investment.
With growing concern over censorship, political manipulation, and platform moderation, I wonder how long the "AI-recommended ad" cash cow can continue. You can only show people so many political and gambling app ads before they stop using your product or run out of time/money.
Me. Most everyone I know. Move from the tech bubble to the suburban parent bubble and I think you'll that nothing is replacing FB anytime soon. The school pages are there, the kid's clubs and activities and team pages are all there. The neighborhood pages are all there, NextDoor exists of course but it tends to be poor imitation of the FB group.
I know what stereotypes exist but I also don't see toxic Karens, nasty open bigoty and racism, or lying political propaganda. Maybe it's just not a SoCal thing? Or maybe I am a toxic racist Karen and I'm blind to it? Today is full of cute Halloween photos, reports on last weekend's high school sports team's results ( our marching band won the regionals!), and not much else. If there's a vicious underbelly than I am blind to it.
You get out of FB what you put in. The ads I see are all geeky T-shirts and practical cross body bags ( I haven't found a good one yet )
I find reddit horribly toxic and depressing and am surprised it doesn't get more attention. The front page tells us only that we are doomed, our country is doomed, our planet is doomed, and reminds us of how much smarter we are than everyone else. I really wish I had the self control to stay away from it.
Stereotype alert: I do know some parents who've dropped FB but it is always the dads. It's often easier for them as they rarely have to keep track of what day is wacky hair day.
It's pretty wild what an alternate reality Facebook creates when you don't use it but others do.
> Today is full of cute Halloween photos, reports on last weekend's high school sports team's results ( our marching band won the regionals!), and not much else. If there's a vicious underbelly than I am blind to it.
You mention that you notice the ads for geeky t-shirts and cross body bags (what are those?), but what about the recommended content? Do Stories and Reels not get in your way? Don't you miss content from school pagse, kids clubs, activities, and team pages because the algorithm decides that it would rather show you yet-another-meme-post?
I'm glad that Facebook seems to work for you. But it really sucks for those of us who don't agree with Facebook's business practices, because you contribute to a network effect that actively excludes non-users. I don't like Facebook's dark patterns, their advertising, or their "recommended" posts. So I choose not to use it. It's absolute bollocks that I can't easily look at community event pages as a non-user, and it only makes me happier that I've opted out of such a toxic, exclusive community.
Oh Christ yes, but if I stayed away from everything where dark algorithms decide what BS to show me I'd end up a digital hermit ( except for HN of course )
Still on my list of 'sites with infuriating un-asked-for content", I don't think FB makes my top 5. Amazon is first, of course, with its "sponsored" products. youtube, reddit, apple TV on content I have _paid_ for. FB pales in comparison
Meanwhile Facebook is essentially immune to content blocking, which made it a very obvious problem for me even years ago.
I have turned into a bit of a digital hermit, though.
I've made a pretty concerted effort to avoid clicking on them. I might click on one once every two months. Over time this seems to have resulted in modest levels of presentation.
OTOH -- this July my feed showed me an old friend's daughter had posted "Miss you mom" on friend's wall, and I thought "that's odd, they don't live far away." So I clicked on friend's profile to see that her funeral was the week before and then saw five months of posts documenting her discovery of an aggressive cancer that had killed her. Nowhere in there had FB shown me any of them.
That's an algorithm failure if there ever was one, though of course there's no way to communicate that to FB and likely no internal incentives to care, so there's really nothing to do but remember that unless you're the customer, the feed will only be about where you'd like to direct your attention to the minimum degree they have to engage you in order to keep selling their privilege to direct your attention.
The same distributions of haves and have-nots exist on any platform. Reddit/Facebook/Instagram/TikTok/everything else are composed of an ever changing and uncountable number of communities, a few of which are bound to be good because of the continuous efforts of their members, and everything else is varying degrees of toxicity, narcissism, hatred, and every other negative trait you can think of.
If someone stereotypes you as a "toxic racist Karen" because you mainly use Facebook, it seems to follow the same reasoning behind why you might perceive Reddit as "horribly toxic and depressing." You get out of X what you put in.
Beyond that, I think it's pretty well documented (and also stands to reason) that the growth is mostly in communities with previously low penetration. If all of your family has reduced facebook usage over the last few years, that means you are in a community with previously high penetration. Of course you won't be able to anecdotally observe growth.
I'm using it pretty frequently, often daily. It may not be the place where everyone is posting their frequent updates, but I still have hundreds of acquaintances who post periodic updates (or read mine), a few circles who use FB events to manage announcements/invites, and FB serves as well as it ever has as a Rolodex.
I get that people get cranky about their feeds and/or concern about psychological or social effects of social media, but FB isn't at all unique here. Any social media you aren't the customer of is going to make its money either directing/selling your attention (which means messing with the feed) or data about your attention, and so naturally most do and there's not really an alternative, there's just a perception of what's fashionable among a given circle.
But as the article points out.. maybe none of this matters. Advertising spend is still going up, the recession may or may not be turning a corner, and there's enough cash buffer to walk things back and refocus on Meta's core advertising business and products that support that.
But, yeah, he's too desperate to be/have the next great (hardware) platform. He wants the "metaverse" to be what Apple and Google have with their hardware and app stores. There's no way he walks it back.
A healthy cashflow is obviously vital for any big corporation, but tech is not about cashflow, it is mainly about innovation.
I believe people want Meta to fail because the spent the better part of last 5 years completely eviscerating their reputation and goodwill. While Facebook, at its prepandemic peak was hemorrhaging young users and becoming known as the platform for misinformation and arguments due to the chase for engagements at all costs, Zuckerberg was bust cosplaying as presidential candidate. People want Facebook to fail and I think that's a consequence of how terrible their reputation has become.
That being said, I want Meta's involvement in a "metaverse" to fail too, because I can't imagine living in a world where Zuck sinks his dark pattern and advertising fangs into an even more immersive version of today's manipulative social media. They've done enough damage as is.
Between TikTok, Roblox, Minecraft, call of duty (and other triple A multiplayer games), we’re already there.
Meta can’t win this one. Same way that no single game publisher can dominate video games.
Even the hardware, fine meta becomes the first “Nintendo”. So what? The PlayStations and Xbox’s will come. No one will let Meta have a monopoly.
How are those "metaverse"?
Good question. My guess is because those things are all 3D virtual worlds (to some extent) and/or a platform that is focused on social connection. Obviously they all need some connective tissue and evolution before they are a legit meta verse.
I haven't seen a description of what 'metaverse' means that doesn't just describe Minecraft (which I love).
tldr: all the $$ still comes from commoditizing community building by subjecting them to ads and counting conversion.
Conversion is always a tricky beast to count, even in our intense tracking of individuals and attempt/successes at tracking users across time, applications, sessions and devices and I'm just honestly not sure how much more humans can handle being advertised to or even spend as things get tighter and tighter. At some point cool new [insert object here] doesn't matter when you are calculating the gas needed to warm your home and thinking about using your hot bathwater to do so.
Yeah, right. They're consultants - this is what they do. Better hire them so you can figure out how to get your slice of $5T!
I wrote in more detail about it here [1], but the basic gist is:
1. A real "Metaverse" that isn't just another video game would require every tech company to agree on a single standard for a MMO world, and
2. There are zero financial reasons why any other company would agree to a) wait for a standard to be agreed upon and b) cede the majority of their profits to the owner of this singular Metaverse.
Therefore, a real Metaverse can never happen. Which makes it even sillier that Mark Zuckerberg continues to go all-in on this vision.
What is the Minecraft/Roblox economy as opposed to the rest of the economy? Like .05%? Growth given the lack of actual capabilities is likely flatline.
Metaverse was obviously a BS pivot. Question is what Zuckerberg is covering up before they pivot back.
I'm going to need a definition for "metaverse" here because that doesn't sound like what I would imagine. You have listed a social media site and some video games. Both social media and video games have been with us for a long time, and if Facebook had just said "we want to work on social media and video games" then nobody would bat an eye.
Of course, that's not what they said. They now call the company "Meta" and toss the "metaverse" label around. This implies that they at least view it as something different in some substantive way.
I guess, either way, it's a failure. If it's just a trick to seem innovative by slapping a new label on old things, then that's a failure, because people now seem to expect them to do something more. If they view it as something novel that's going to "eat the world," that's also a failure (at least so far), since it clearly hasn't.
VR and social media are absolutely not the same thing. One takes over your sensory inputs and 100% of your attention. The other you can do on your phone at the same time as other things.
So far!
If you work in VR, and meet in VR, why would you need a phone?
Is that all Metaverse is? Minecraft but in VR?
I think the fact that it's so vague ultimately serves Meta when it allows their company initiatives to lack a certain definition (keeping shareholder trust that much higher despite the CEO whom they cannot rein in).
In the social network space, Facebook created a monopoly by buying up their competition until they became inescapable in most countries via the network effect. As a result, Facebook effectively holds a monopoly on social media to this day. They squat on that monopoly and extract value through ads, keeping anyone else from meaningfully competing, like some kind of medieval bridge troll.
In the metaverse space, Facebook wants to create the first viable product so they can extend their trolling and rent seeking to that medium as well. If they can absorb competitors, I think they have a chance. If the US government meaningfully enforces anti-trust law, I don't see any way that such a soulless, awful company that routinely churns out unpleasant products can possibly attract enough users to establish and maintain a monopoly. It seems that Zuck is betting that they can build the tech first, patent the shit out of it, and the users will have no choice but to play in his walled metaverse garden. I suspect folks will opt out before they do that.
It's about being the first one to reach mass market, and holding onto that position as long as possible.
No, people want Meta/Facebook to fail because frankly, they are evil.
- Instagram is toxic to young girls: https://childmind.org/blog/instagram-is-harmful-to-teenage-s...
- Misinformation: https://scholar.google.ca/scholar?q=facebook+misinformation
- How many people died because of Covid conspiracy theories they read on Facebook?
[1] https://www.forbes.com/sites/kashmirhill/2014/07/10/facebook...
[2] https://www.cnet.com/tech/services-and-software/a-look-at-bo...
[3] https://www.newsweek.com/facebook-racial-ad-targeting-multic...
But of course, as Meta put gun to the head of everyone - you WILL make Reels, or else - and now all the people I follow, increasingly make Reels. I hate Reels.
IG, FB, and YT all realized that if they force creators to choose between making Tiktoks and posts/videos they’re going to make Tiktoks. The cost of making entirely separate content has to be worth the extra audience and you can change the calculus by making the cost really low.
I cannot hate FB more than I do. If it wasn’t for Marketplace, my account would have been deactivated years ago. And even Marketplace is obnoxious in a myriad of ways.
I’d say the entire Facebook UX sucks. If I didn’t know better I’d think it was a startup with inexperienced designers. Shocking how complicated and lazy it feels.
TikTok is a large niche social network, as are all major social networks in the West except for Facebook. That's why it'll find a lower plateau than FB core in terms of users, as with Pinterest, Snap, Twitter, Instagram, Reddit, WhatsApp (if one even cares to consider WhatsApp & Co. social networks, either way).
Walmart hasn't been a great investment during the Amazon era. 20 years ago WMT was ~$55 / share. Inflation adjusted that's around $90 per the BLS (likely there has been more inflation than that). Today WMT is $142. So 20 years to add 57%. And sure, they pay a dividend, that merely makes the return a bit less mediocre - the S&P 500 is up 336% in that time for example.
Meta, as with many (previously) overvalued tech stocks from this era, is in for a long stagnation vs the recent highs. It'll remind you of Microsoft ~2001-2015. Future returns were massively pulled forward. The pandemic remoting hyper activity era also pulled returns massively forward in other areas, which will be paid for via many years of stagnation in areas like advertising, ecommerce and remote tech (eg Zoom is an excellent example of said future returns being pulled forward; growth in remoting that might have taken a decade gradually, was zoomed forward courtesy of the pandemic; now the hangover).
> This level of investment simply isn’t viable for a company like Snap or Twitter or any of the other also-rans in digital advertising (even beyond the fact that Snap relies on cloud providers instead of its own data centers)
Let's change the industry to autos: "Funbag Autos has a massive investment in aluminum companies. This level of investment simply isn’t viable for a company like Tesla ... (even beyond the fact that Tesla relies on outside aluminum companies instead of its own"
In other words: "vertical integration is good." It can also weigh you down and keep you from advancing your technology.
As for Metaverse: he admits it's a loser, but maybe not that terrible in the grand scheme of things.
Counterexample: Apple.
In any case, it's never a simple answer: vertical integration has advantages and disadvantages.
Which Jobs acknowledged in his 1997 WWDC talk before becoming CEO (again).
There's an execution burden with integration and it has to be overcome with solid execution.
Building the processor in house probably IS a good call. In Jobs' day, even he didn't build the processor. But nowadays, things are different.
I can’t believe that Apple wasn’t working on the first 64 bit in house ARM chip by the time SJ resigned in 2011 that was introduced with the 5s in 2013.
A counterexample is not a counter to an example. It is an example that counters a point, which you did give.
(That said, Apple is still not really a counterexample because clearly vertical integration can weigh you down even if others have pulled it off successfully)
Maybe now you can't easily access a ginormous cloud of AI-optimized processors (I don't actually know this is true, by the way. Anyone?).
A few years from now, maybe some large player will offer that, and Facebook / Google will be stuck with these big investments while their little competitors just pay for what they use.
I'm not taking a position one way or the other; just saying that it's always a hard call.
And before anyone says that AWS was an offshoot of Amazon Retails excess capacity, this is an urban myth. AWS was always a separate product with separate servers just for selling to customers.
Without a doubt they are still a money printing machine with billions of users but the real debate is whether they at all still innovate and the Metaverse discussion which Ben barely spends a paragraph on should be at the center of it given that they've even staked their name on it.
Anything people like about FB is companies they bought or features they copied. WhatsApp, Instagram, etc. The blue app is the Java of social media, everyone uses it but nobody likes it. Meta has a governance model that should be very dynamic, Zuckerberg is literally dictator for life. But the thing they've only ever been successful at is making money, which if anything is owed to people like Sandberg, who now seem to be leaving.
A company that is run essentially by one person has the business model of something that's run by a committee, and the one creative decision he makes in decades seems like a total flop. That should at least be slightly alarming.
If Apple sees Meta as a threat now that Meta are getting into devices, all they have to do is add a rule that probalistic models of conversions beyond a certain scale of computation aren't allowed, and that anyone operating over $X amount of revenue on their platform is subject to invasive audit to make sure they aren't doing it. They can figure out a way to say it is for privacy but that they themselves can do it, or they can make it so users can opt in to probalistic models with different defaults and wording on the dialog for third parties vs for Apple like they do now for tracking (Apple calls others' tracking in the prompt 'tracking your activity', for their own they call it 'ad personalization').
What does this even mean? Is it really possible to build models where the conversion label itself is not deterministic due to ATT and has to be predicted by another probabilistic model?
1. You purchase ads on FB
2. You tell FB how much a conversion is worth to you (let's call that $W)
3. You link your site to FB (via a pixel etc) so that they can automatically measure conversions. They say this is for you so that you can see which ads are actually working.
4. In reality, FB now knows what a conversion is worth to you so they can keep upping the price per ad till it gets as close to $X as you can take before you stop advertising.
If ATT is in play now, FB doesn't know the conversion rate and then can't tell how much to "squeeze" you by raising the price.
That would therefore incentivize them to figure out other ways to figure out that rate otherwise how can they maximize advertising revenue if they can't squeeze you?
Steps 1-3 are correct, step 4 is not.
What actually happened is that you'd say I want to spend $10 on FB ads. There's a system called pacing that reduces your bid most of the time so that you don't run out of budget before the end of the day.
Separate to this, FB estimated how likely a user was to click/convert on your ad, and multiplied your bid by this probability (times 1000). This number was used to rank your ad against other ads/content.
So, what would actually happen is that you'd see amazing performance on that $10 budget, and you'd be like FB rocks spend all the money. Unfortunately, because of the way the above worked, when you 10xed the budget it would all far apart.
If FB had actually wanted to maximise short term revenue they might have behaved like you said, but the reason they've made so much money over the years is that they were always much more focused on the longer-term revenue.
So given this is the case, how does any advertiser scale up their spending without getting disillusioned and abandoning FB ads?
However, fighting that pull is the optimization opportunities enabled only at scale. If I run 1 ad, I know how that performs. If I run 1000 ads, I know which ad performs best.
Especially if it didn't require people be logged in to scroll down.
Those kinds of ships are so big that it is very easy for managers, investors and employees to convince themselves that everything is _fine_.
The biggest problem, for Meta, in my opinion, is not the brand, not the business model and not the competition. The problem is much worse because it is internal and probably too late to fix.
Their engineering culture as a whole is a one trick pony.
what do you mean by this? what's their one trick?
This is something that is built early, most of the time with a strong influence from the founders/CTO.
Once it is built and scaled up, it can still change but very slowly.
You can hire extremely talented outsiders (John Carmack) but it won't do much.
A company like Meta is like an overfitted AI model, they can do one thing very well and almost everything else very bad.
Take a look at horizon universe, does it look like state of the art for you?
There are plenty of brilliant coders, engineers and scientists at Meta, no question about it.
My browers is still logged in though and I see ads by Facebook while browsing other sites. Am I still considered a DAU? If so, is Facebook the new DoubleClick?
No.
So, no.
So in a way, I don't use Facebook in the way I've always used it but I've had to confront that I'm still checking it every couple of days.
My guess is that they are stuck with a lot of shares and want the price to go up to get rid of them.
If I thought Meta is doing great, I wouldn’t try to convince others that, I would take the opportunity to buy and horde as many stocks as possible.
Because you're a tech blogger who gets paid to blog about tech and don't have any better ideas this week?
But the real story is simply Human Nature at work. Everyone ( or at least a sufficient amount of people with Power ) hates Facebook. And they need a good story to shit on it.
No, not everyone. Everyone on Reddit, and 50% on HN hate Facebook. All the power they have is to post snarky comments, upvote, and (maybe) downvote.
Easier said than done, as I know because I still use Messenger.
In certain contexts that distinction may not matter - a user is a user, right, who cares how much they hate you? But if a large enough percentage of your users hate your service, it should at least in theory reduce whatever moat you've built that keeps them captive.
Does anyone know any interesting myths about myths?
I'm not saying that Facebook will succeed there. But in the past VR was a failure because tech was just not ready. Is it ready now? Maybe. Will it fail? Maybe. But past failures will have nothing to do with future ones.
The key is to build up a set of patents so that you can enter the market when the tech is there. This takes some investment but not nearly as much as trying to force the metaverse to happen now.
So I disagree with idea that the leadership has a long term focus. They are trying to make the metaverse happen before it's ready. This is very shortsighted. They could scale back and maintain a holding pattern for far less cost.
Seeing VR and AR as any kind of substitute for analog interactions shows the culture/lifestyle divide in plain english.
I enjoy entertainment, but the 21st century has so many options that do not require any flavor of fiction.
I agree with the authors capitalistic view that if facebook disappeared, there would be another to replace it (if there was a market there).
With the ratio of illiteracy, i can't say that much of social media was anything except a time suck of filtering inferior and/or obsolete gibberish.
I worked on my golf swing instead. And by chance, it has stayed 100% analog, without adding any technology to it.
I'm a technology native too and was introduced to golf about 8 years after technology.
> Myth 5: Meta’s Spending is a Waste
Any rebuttal to the arguments he makes?
>In the long run, though, this investment should pay off. First, there are the benefits to better targeting and better recommendations I just described, which should restart revenue growth. Second, once these AI data centers are built out the cost to maintain and upgrade them should be significantly less than the initial cost of building them the first time. Third, this massive investment is one no other company can make, except for Google (and, not coincidentally, Google’s capital expenditures are set to rise as well).
Even if they don't sell a lot of headsets, they will probably have more experience than anyone else on what works and doesn't, and how that relates to the experiences they need to create. Of course this depends on VR actually mattering, which I doubt. Perhaps some of that will apply to AR, though when that goes mainstream is another big question.
* Normally the adjective "heroic" would be appropriate to describe the level of effort, but somehow I can't use that word when talking about a company, much less one like FB.