Facebook: The personalization engine for all of the Web

This article was originally posted as a guest post on Geekwire; it is republished here for the readers of this blog. 

Facebook and its third-party applications today know a hell of a lot about each us: what content we read (Washington Post Social Reader); what music we listen to (Spotify); what movies we watch (Netflix).facebook-opengraph

Facebook opened up a green field for the game creators, too: games with friends are just so much more engaging. However, while Zynga and Electronic Arts fight for the attention of the social gamer, the only party that is guaranteed to win is Facebook – they gobble up data from ALL of the apps to compile a multi-dimensional data set that will ultimately allow them to build the best personalization and ad relevance engine on the web.

This strategy of Data Dominance – knowing more about each user than any competitor – is executed through a set of API’s that Facebook calls Custom Open Graph. Each micro-interaction in the vertical universe of a game, a social reader, or a music app is a way for the app to drive traffic; it is also a way for Facebook to learn more about each user.  It’s a powerful data mining operation that aligns the interests of all parties involved: the consumer, the app creator, and Facebook.

But how will Facebook use this data advantage? No matter how addictive Facebook is, consumers still spend six out of every seven minutes on other sites. To extend its data dominance to the rest of the web, Facebook should offer analyzed data up as a service to other sites – driving value for third parties and revenue for itself.

In fact, Facebook has already started down this path with its ad products. While Facebook started out by targeting ads on facebook.com using only their own internal data, they recently made the smart move to integrate insights from other publishers’ sites through Facebook Exchange. This was the first step toward an external ad network, and a direct challenge to the eternal enemy, Google, on their AdSense home ground.

With personalization, however, Facebook has been playing it close to the chest: the famous EdgeRank– the ranking algorithm behind the newsfeed that judges what content from your friends will be interesting to you – is so far available to Facebook only. No third party can leverage its great insights. Facebook made a weak attempt to unlock some of its power with the Recommendation Bar plugin; it was a move in the right direction, but the execution sunk it. Instead, Facebook should offer personalization as a cloud data service – and they should charge for it.

Imagine if The New York Times could tell if you’re going to like a particular story – and recommend you a different one if you wouldn’t. Imagine if an online store could know – based on your Facebook profile – which product you are more likely to buy. Both of these businesses would flourish. And Facebook could take a cut of the incremental revenue.

Let’s examine Outbrain, a premium syndication provider. Fundamentally, they are in the relevance business – given a piece of content, they suggest several other pieces of content a reader might like. Facebook could solve this exact problem a lot better – they have more data to base the recommendation on.

Facebook is in a position to unlock incredible new revenue for a whole slew of merchants, if only they allowed partners to tap into the personalization engine directly.

I work at Wetpaint, where we’re building a quantitative platform for audience development. Today, we use Facebook as an efficient content delivery channel to build loyal audiences. We’ve developed ways to run statistical experiments to learn about the audience’s interests, and this analytical approach has driven extraordinary results for us.

And yet we are only scratching the surface of the multiplier effect that is available through the world’s greatest optimization laboratory.  Facebook today is mostly a black box; but if Facebook were to open up its personalization engine, publishers and brands would be able to create far deeper and more engaging relationships with readers and customers.

We’re on the cusp of a personalization revolution in publishing.  Facebook, with its strong advantage in Data Dominance and its equally strong incentive to make the online experience more personalized (for both users’ and advertisers’ sakes), is uniquely positioned to take us there.

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Influence of Your Work on the World

As I was finishing school, I had a dream – I wanted my job to maximize my influence. I wanted the product of my craft to touch, in a meaningful way, as many people as possible, helping them in small and large ways. It’s mostly pride and desire to maximize the control over your environment: isn’t it awesome when everyone around you knows what you’ve been working on?

“You work on the search engine at Google? Wow, I use that every day!”

“You’re at Boeing developing the new 787? So many people are going to fly on that!”

A beautiful quote from a Microsoft engineer on this subject:

Very few projects at Microsoft have “small” impact. Everywhere you turn, the projects people are working on are likely to be used by thousands or millions of people. You have the opportunity to earn, save, or cost the company millions of dollars through your work. It’s an awesome responsibility, but an awesome chance to create widely influential software.

I’ve found a hole in this logic: it’s missing a key variable. It’s not just about the number of lives you touch. It’s also about the number of people that are working on this same product. The logic is simple: if there are thousands of people working side by side with you, your individual contribution will be lower. You will own and contribute to a smaller part of the puzzle.

Moreover, for technology projects, I’d argue the number of engineers working on the product has an even stronger, quadratic effect on each person’s influence. Ancient, yet so contemporary book Mythical Man Month makes this point well.

Here’s my attempt at quantitatively measuring your work influence number as an engineer in a high-tech company:

Let’s look at some examples:

  • Microsoft Office is one of the world’s most used products; yet there are quite a few engineers touching it. Spread-out, shared ecosystem of Office Shared services that own cross-product components and installation, as well as groups that own localization and documentation, makes the denominator in the equation above quite high.
  • Facebook is famous for having a restriction on the number of engineers that can work on a given product; I can’t find references to the exact number, but anecdotally, it’s under 10. So let’s say 10. Let’s look at the example of the Timeline: with Facebook’s 900M users, influence of an engineer working on that team is 900M/100 = 900K.
  • At Wetpaint, there are 3 engineers working on the wetpaint.com website. Last month, we had 12 million readers. Influence of each engineer = 12M / 9 = 1.3M.

If you’re looking for your job to have influence – right out of the gate – work in a small, isolated team that has full control over its destiny. Startups are by definition structured this way.

Shining the Spotlight on the Audience, Not the Stage

This article was originally published as a guest post at Digital Quarters, and is republished here for the readers of this blog.

Every day, we go to our favorite news outlets and get our fix. We land on the same familiar sites. We seek out the kind of news that fits our fancy. We casually share the most interesting news with our friends – over dinner or online. And, tomorrow, it starts all over again.

Why? What motivates us to watch the daily news, read an opinion in a magazine, and come back to a favorite TV show? For content creators and distributors, it’s easy to think that it’s all about the content.  This view is based on the notion that people desire the intrinsic value of content, such as the knowledge hidden in a report, or the laugh they experience from a comedy sketch.  But this idea is too flat, and it ignores a more powerful force that’s at work, and that drives the tremendous confluence among target populations when it comes to what they read.

Indeed, in many cases, a deeply human driver is far more valuable than the information itself. And that driver is the desire to be a valuable, appreciated member of a group.

As the graphic below shows, this desire maps directly to Maslow’s pyramid of human needs – the need for esteem.

ideas-pyramid3-blogspan

(diagram from NYTimes – http://ideas.blogs.nytimes.com/2010/07/16/revising-maslows-pyramid/)

After taking this pyramid or hierarchy of needs in, it becomes clear that, as publishers, we must pay attention to the amount of influence, respect, and social value that audiences are able to earn from their friends after consuming content.

Let’s look at a few examples.

For World of Warcraft geeks, a news article on a long-tail site that covers the latest artifacts is true gold – because it will help them be the most informed in the eyes of their guild.

For fans of Bachelorette, watching the latest episode is very much about having a water cooler conversation about it next day – and the potential social connection that brings.

For Politico readers, it’s about exerting influence on their Facebook friends after they share a controversial editorial.

And, for Lolcats readers, it’s about making their friends laugh for the umpteenth time with a new, undiscovered photo.

Each of these examples is about social influence and social esteem.

Here’s the take-away for publishers in all of this: a key component of the value of the 21st century media company is about helping audiences gain the attention of their social circles.

This represents a radical shift from what we’ve seen over the past decades.

Instead of trying to capture and direct the reader’s attention (“Look at my 100-year-old brand! I curate the world and know best what you should look at!”), the publisher becomes a back-stage prompter, helping readers utter the words that will make them the center of attention among those they care about. The reader can then become an even stronger influencer, or taste-maker.

Every time a friend consumes something that you’ve read, you’ve successfully directed their attention. Your social bank account just became more valuable. And every time publishers help make this transaction seamless and smooth, they are helping you earn some social gold.

This is why Washington Post Social Reader and Yahoo Social are such smashing hits.

Readers want to consume content within these apps, because of the feedback loop from their friends.  (“Hey, I saw you read this article, and I read it, too.”) This is a self-reinforcing pattern that creates social value for all the participants. These publishers, and Facebook’s timeline apps, put audiences first; and, in the process, they generate an ever-increasing amount of social value for readers.

Note that curation and brand very much play into this the social value generation; nobody wants their friends to be misinformed or displeased by media that they endorsed. Content is still king.

If, say, the Washington Post wanted to take this experience to the next level, it could make curation even more personalized. Instead of telling readers that they must care about the Russian presidential election via a big front-page photo – completely ignoring the fact that sharing this knowledge will drive zero social value to its readers – the Post could cater to the unique values of each reader. To do so, it could measure the social response from the reader’s audience – and then personalize the content based upon this response. It’s essential to point out, however, that the reader’s interest – and the response of his or her audience – are not mutually exclusive; a smart personalization algorithm will take both of these factors into account.

That said, in the end, publishers must awaken to the fact that social influence and social esteem are key matters for their audiences today.