Why Mark Cuban is wrong about Facebook
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The reason it feels like such a terrible deal here is that you aren't paying $3 CPM to reach a new audience, you are paying $3 CPM to reach your audience. Sure, Facebook can argue "it's the most targeted audience possible, they're Mavericks fans!" but the counter to that is "of course they are, it's my brand that put this audience together".
Brands use Facebook because it's far more user-friendly than trying to collect your fans together on your own website, and therefore it's a better solution - easier for your fans means more will do it, so you have more people to market to. However the comparison is that they're people who have chosen to subscribe to you, and therefore the pricing comparison is not to digital advertising, but to writing to fans on a website, or a blog, or through email newsletters. This is why it feels like, and arguably is, a rip off.
As to the argument that it's needed from a user's point of view and that Facebook happens to be able to monetise to help their users (e.g. jeffwidman's comment: http://news.ycombinator.com/item?id=4785852) I'm not really sure. It's probably a valid point. I'm not a Facebook user myself (but my marketing work occasionally covers Facebook), my personal feeling is that if I follow a brand it's because I want to see their updates. All of their updates. In my head, it's the same as signing up to a newsletter, or subscribing to an RSS feed, just through a convenient third party. But as I don't do it myself, I'm happy to consider myself wrong, or in the minority, maybe if I was an active user following many brands that I care about I would find that getting 100% of their messages would ruin my Facebook experience.
One note: the $3 I noted in the article actually isn't CPM, it's Cost-Per-Reach, or Cost Per Unique Impression. This is an important distinction because most digital/display advertising functions on a CPM basis, where one person might see an ad multiple times. On Facebook, when a Page promotes a post, that post is only displayed to that user once.
Brands have a tendency to abuse the trust of someone opting-in, whether that's on Twitter, Facebook, Email, etc. When this happens, most people aren't aware enough to understand the cause and effect - instead of blaming the brand for being spammy, they get frustrated with Facebook.
The News Feed Algorithm and Sponsored Stories are Facebook's way of ensuring a better user experience. By pushing brands to pay a small price for distribution, Facebook gets brands to think about what they're publishing and to take advantage of the targeting options that Facebook makes available, so that their content reaches the right people.
One thing to note, when you said "my personal feeling is that if I follow a brand it's because I want to see their updates", the tricky think about facebook is that you don't "follow" a brand like you do on Twitter, you just "like" them. In my opinion, it's a small but important distinction. Just because you enjoy a certain brand doesn't mean you actually want to know every little thing they're doing.
This allows me, as a Facebook user, to complete my profile and declare that I like something, even if the marketing that the associated Page is doing isn't something I want to see.
This ensures that profile information remains accurate, which is critical for ad targeting - people don't start unliking things they actually like, just to avoid annoying marketing. The interest graph remains intact even when brands make poor marketing decisions.
Maybe I've been on the other side for too long, but I equate liking a page with opting into their facebook marketing content, and I unlike if I want to opt out.
I'm not sure why anyone would assume a very casual social "hey I like X" is equivalent to "subscribe".
In normal social circles there an expectation that the you want to hear about things you 'like'. For instance if in real life I have a friend who 'likes' classical music then when I hear something about classical music I will talk to them about it.
Also like is not like subscribe because the idea behind subscribing is that you receive everything. For instance if I 'subscribed' to a magazine I would be rather upset if they only sent me every 7th issue, or only sent me issues when the newspaper had not arrived.
People commonly associate/link their personal identity with media and products, certainly.
Twitter is more obvious semantically, but heavy Likers of brands on Facebook already understand the implication, and increasingly so will everyone else, regardless of the terminology. For me it's basically to the point where I only Like things that are owned or run by people that I actually know.
I never liked anything on facebook (via a 'like' button) but I do have several likes.
Before the facebook feed , before even the facebook wall, the personal information field of your profile was a text blob. Over time facebook parsed this information and matched it to pages, giving me likes.
Now i get updates from films in my feed because 7 years ago I added them to a text field called 'movies/tv'
Doesn't bother me because I hardly use facebook anymore. But it is interesting to think how it has changed.
I'm sure that Mark Cuban's hockey team drives a lot of viewers to watch TV. Does that mean Mark should get to advertise for free on television? That's not how the networks see it. [edit: this is a really bad example]
It's funny that we've gone from being outraged about spam and all-pervasive advertising, to being outraged that spammers have to actually pay to send the stuff.
Mark Cuban isn't God, I don't think this is a "huge" signal at all. IMO, Cuban's critiques of YouTube have been similar - which I feel have also been proven wrong with time.
They are doing it the wrong way, though I don't care to help Facebook so I won't comment here as to how they should be doing it.
The difference here is that "organic" is considered Google's and Facebook's best attempt to show their user what is most relavent to them. Some speculate that both companies are modifying these results to optimize paid results but there is no smoking gun that is true.
* perhaps they want to add their interests and likes to their profile, to show their friends what sort of music they listen to.
* perhaps they want to increase the like count of an issue they care about at a "single click worth".
* or perhaps they actually want to receive updates on the topic.
None of these automatically mean that they want to receive updates on the topic so much, that it should be among the top-10 news items of the day compared to their friends' posts. A "like" is much more effortless and not comparable to signing up for an email newsletter.
I don't see Facebook trying to make maximum money from pages with the newsfeed filtering, I see them trying to improve and spam-filter the content of the newsfeed for the benefit of the users. The "like-gate" scandal seems very similar to the SEO-community outrage every time Google changes their ranking algorithm - a community that forgets that if their pages got pushed down, someone else's probably more relevant page got pushed up.
The bottom line is that people don't come to Facebook because of brands. Rather brands come to Facebook because that's where the people are.
The fact that at one point a business convinced a user to click a Like button does not provide anything approaching a symmetrical benefit to Facebook. Sure, Facebook is always happy to add content, but that marginal value of that content is nowhere near as important to Facebook as the distribution is to the brands. Facebook's primary asset is an engaged user base, and it's the social exchange that engages users. Meanwhile if businesses are pursuing any social media strategy, where can they get anything approaching the reach of Facebook? Even if another startup comes up with the reach, they'll be in the same monetization boat as Facebook and certainly will make decisions that piss off someone.
I believe this is called insanity!
A direct email campaign would have been cheaper (MailChimp quotes <$2500) and more effective. Despite the social media hype, we keep seeing statistics that support direct media when communicating with existing clients.
Users are different. If they feel slighted, they will disappear. Facebook is right to focus on the user experience at the expense of antagonizing advertisers.
Whether Facebook could have implemented this without pissing off so many people, now that is a different story.
History seems to indicate that Facebook can NOT change a single thing without pissing off a lot of people. Every time they do a major update... the Internets go crazy. I've been guilty of that. I still hate Timeline... but I haven't left Facebook yet. :)
The FB experience is getting worse by the day for users and advertisers.
I really want is control of that myself. Default me to everything and I'll "show less from this page" or unlike if they are spamming me.
Some companies and organizations are using Facebook to communicate with me and Facebook is deciding what I'll see or not see.
THAT is Cuban's real problem. You can't reach all of your audience without coughing up a fairly large amount of money because Facebook has decided not everybody wants to see your message.
The fact that they have turned protecting against the tragedy of the commons into a monetization model may not make brands happy, but it makes users happy.
Telling people what they can afford is not a very well thought out argument.
Someone might follow your brand on Twitter, but if he doesn't check his feed for a while, he doesn't see your marketing-speak unless he goes looking for it. Unlike Twitter, Facebook actually tries to be intelligent and show you the stories you care about instead of defaulting to chronological order only. Since, shocker of shockers, people generally prefer to engage with their fellow human beings as compared to these quirky entities we call "brands," the stories you care about are more likely to involve an old friend getting married or your buddy's weekend pics than whatever inspirational message your social medial engagement intern shat out this hour.
Basically, Facebook is treating brands a lot like people: not all their friends see all their content in their newsfeeds, but some do, and higher engagement and closer connections make it more likely that someone will see your stuff. Brands, naturally, don't want to play by the same rules as us mere mortals and want all of their "content" displayed prominently in their subscribers' newsfeeds. In other words, it's Citizens United v. FEC all over again, except no one is actually limiting corporate speech here, just asking brands to pay rather small amounts if they want more reach and distribution than the rules allow.
To sum it all up for Mark Cuban: the mere fact that someone has liked the Mavs on Facebook does not mean that she wants to hear whatever your marketing interns come up with every couple of hours. The obnoxious guy who talks about himself all the time doesn't automatically get a free megaphone to beam his messages into the minds of everybody he's engaged with. I realize that you, Mr. Cuban, have made a career out of being precisely that guy, and that people do walk around hanging on your every word, but us normal people and normal brands have to pay for our promotion, and it's unreasonable to think otherwise.
AOL, Friendster, Myspace, now FB.. They never monetize because the model can't support itself properly or at least it won't make a trillion dollars like one might expect to with a billion users. If they really wanted to monetize they should just go the linkedin route and charge $1/month for it. If you're not willing to pay that much for FB then what's the service really worth to you?
$38 -> $22 - Need I say more? Zuckerberg reminds me of that guy Steve (Edward Norton) in the Italian job. Clever as he might be - he's just got no imagination.
I'm in a couple of groups that are basically companies and I get all their status updates as well as the ability to turn on or off notifications for them (one I keep on because I really like the company).
Content marketing -__-
On the other, who better to say "You just don't understand the power of the platform" than someone who sees the numbers on over 10,000 Facebook pages with more than 1Billion Facebook fans?
If Cuban said "I don't understand the platform" that's one thing, but saying "This platform doesn't work" is claiming it's not an education problem, it's a platform power problem
Facebook can become insignificant 1 year from now just because a new service propose better features at a lower price, or just because people get bored...
People used to have email accounts at yahoo , yet , people now prefer gmail because it is easier to use and is less "spammy".
People used to have myspace accounts , and guess what, moved to facebook...
But it's also true that nothing's free on the internet. Twitter is not free , neither is facebook , and as a business they need to generate revenue.
The toilet is the closest metaphor I could come up with for Facebook.