WEBVTT - The Evil Algorithm 0:00:04.400 --> 0:00:07.800 Welcome to tech Stuff, a production from I Heart Radio. 0:00:12.240 --> 0:00:15.000 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.120 --> 0:00:18.280 Jonathan Strickland. I'm an executive producer with I Heart Radio 0:00:18.400 --> 0:00:21.160 and I love all things tech and I was listening 0:00:21.160 --> 0:00:25.280 to a recent episode of pod Save America's offline series 0:00:26.000 --> 0:00:29.680 in which journalist Charlie Warzel joined the show to talk 0:00:29.720 --> 0:00:32.440 about Facebook and its role in causing harm on a 0:00:32.479 --> 0:00:36.559 global scale, which inspired me to do this episode. Now, 0:00:36.600 --> 0:00:39.360 before we get started, I guess I should apologize for 0:00:39.440 --> 0:00:43.319 the somewhat click baity title of this episode. We're going 0:00:43.360 --> 0:00:48.640 to be exploring algorithms and their unintended consequences, and we're 0:00:48.680 --> 0:00:52.360 focusing on the Facebook algorithm. That is, the algorithm that 0:00:52.479 --> 0:00:56.279 determines what appears in your news feed. But algorithms by 0:00:56.320 --> 0:00:59.320 themselves are not necessarily good or evil on their own. 0:01:00.000 --> 0:01:02.600 You know. It's kind of like what Hamlet said, Now, 0:01:02.640 --> 0:01:06.560 there's nothing neither good nor bad, but thinking makes it so. 0:01:06.560 --> 0:01:11.280 So let's start just by defining what an algorithm is. So, 0:01:11.319 --> 0:01:15.640 an algorithm is essentially a set of rules or directions 0:01:15.680 --> 0:01:18.520 that a system follows in order to process information and 0:01:18.560 --> 0:01:21.840 produce results. And that's it. So it's just a set 0:01:21.840 --> 0:01:25.920 of rules. Let's use a really simple analogy to explain this. 0:01:26.040 --> 0:01:29.520 Let's say I've hired you to sit on a bench 0:01:29.880 --> 0:01:33.399 by a road. Say it's a road that gets decent 0:01:33.480 --> 0:01:36.199 but not heavy traffic, And I say it's your job 0:01:36.600 --> 0:01:38.759 to make a tally mark on a sheet of paper 0:01:39.000 --> 0:01:43.839 whenever a silver car drives past you along this road, 0:01:44.080 --> 0:01:46.520 and you're to ignore all other cars, only make a 0:01:46.560 --> 0:01:49.800 tally when a silver car goes by. I just, you know, 0:01:50.000 --> 0:01:51.960 want to see how many tally marks are there at 0:01:51.960 --> 0:01:53.920 the end of a certain amount of time. Let's say 0:01:53.920 --> 0:01:56.840 it's an hour, and I have given you an algorithm 0:01:57.040 --> 0:02:00.560 tally every single silver car that drives past you. So 0:02:00.640 --> 0:02:03.200 you observe the vehicles that drive by you, you follow 0:02:03.240 --> 0:02:06.080 the directions, and that's the whole concept right there. Now. 0:02:06.080 --> 0:02:09.480 I feel like a lot of folks, including myself, sometimes 0:02:09.600 --> 0:02:11.320 use the word algorithm as a kind of way to 0:02:11.360 --> 0:02:13.800 save a bit of time, But it also tends to 0:02:13.840 --> 0:02:17.440 create a gap in understanding. Like, you know, the word 0:02:17.480 --> 0:02:22.480 algorithm acts kind of like the curtain between Dorothy and 0:02:22.560 --> 0:02:25.399 the Wizard of Oz. You know something's going on back 0:02:25.440 --> 0:02:28.440 behind the curtain, but you can't actually see what it is, 0:02:28.840 --> 0:02:31.880 so we use the word algorithm to describe it, and 0:02:31.919 --> 0:02:34.639 then we just move on. Now. Part of the reason 0:02:34.720 --> 0:02:37.520 for that is that a lot of companies, big ones 0:02:37.560 --> 0:02:42.400 like Google and Facebook jealously guard their algorithms from critical view. 0:02:42.760 --> 0:02:46.359 To the outsider, it would be impossible to say whether 0:02:46.400 --> 0:02:49.480 the algorithm was working well or if it wasn't, because 0:02:49.480 --> 0:02:52.480 we don't necessarily know what the goal of the algorithm 0:02:52.560 --> 0:02:55.520 is in the first place. We know it is doing work, 0:02:55.600 --> 0:02:58.520 we know it's doing something, it's creating the results that 0:02:58.600 --> 0:03:01.320 we see, but we don't know if it's doing the 0:03:01.400 --> 0:03:05.000 best job at that. So this lack of transparency becomes 0:03:05.000 --> 0:03:07.800 a big issue in some cases, like with Facebook. And 0:03:07.840 --> 0:03:11.160 there are times when an algorithm is technically doing what 0:03:11.200 --> 0:03:14.240 it's supposed to do and it is doing it well 0:03:14.560 --> 0:03:18.600 by that definition, but that there are unintended consequences and 0:03:18.680 --> 0:03:22.600 sometimes really bad ones. I would argue that this is 0:03:22.600 --> 0:03:25.760 what we see with Facebook in particular. It's what's led 0:03:25.800 --> 0:03:30.240 the company Meta, you know, the company that owns Facebook, 0:03:30.480 --> 0:03:33.320 to get into hot water around the world because of 0:03:33.360 --> 0:03:37.839 issues like the spread of misinformation and hate speech. Now, 0:03:37.880 --> 0:03:41.480 to be clear, I'm not saying Facebook engineered an algorithm 0:03:41.520 --> 0:03:46.280 to spread that kind of bad content. Rather, Facebook engineers 0:03:46.280 --> 0:03:49.960 create a system that prioritizes that kind of content because 0:03:50.080 --> 0:03:54.320 that content fulfills other goals. So let's back up a 0:03:54.360 --> 0:03:58.560 bit and really get to grips with what's actually going on. First, 0:03:59.120 --> 0:04:02.760 let us consider what Facebook started out as, because it 0:04:02.800 --> 0:04:05.920 was a much less expansive and influential site when it 0:04:06.040 --> 0:04:09.960 launched way back in two thousand four. Back then, it was, 0:04:10.160 --> 0:04:14.600 in Mark Zuckerberg's own estimation, a tool for Harvard students, 0:04:14.920 --> 0:04:19.200 presumably mostly male ones, to rank the quote unquote hot 0:04:19.240 --> 0:04:23.560 girls on campus. So Facebook, the site has always been 0:04:23.560 --> 0:04:26.279 a creep. It's just now it's a much older and 0:04:26.400 --> 0:04:31.360 much more influential creep. Anyway, running a site costs money. 0:04:31.400 --> 0:04:34.840 There are hosting services and bandwidth fees and other stuff 0:04:34.880 --> 0:04:37.479 that you have to cover, so there needed to be 0:04:37.560 --> 0:04:41.320 a way to offset the costs of running this pretty 0:04:41.360 --> 0:04:45.600 basic social network. In April of two thousand four, Zuckerberg 0:04:45.720 --> 0:04:49.960 introduced flyers and you know f L y e r s. 0:04:50.200 --> 0:04:54.680 These were essentially banner ads on Facebook's homepage. So these 0:04:54.680 --> 0:04:56.560 are the same kind of banner ads that would appear, 0:04:57.000 --> 0:04:59.400 you know, on the top, bottom or sides of any 0:04:59.440 --> 0:05:03.120 website that you visited. The ads were really mostly for 0:05:03.240 --> 0:05:06.320 local businesses, So this was really small potatoes stuff, but 0:05:06.520 --> 0:05:08.840 it meant that there was some money coming in that 0:05:08.920 --> 0:05:13.880 would help offset Facebook's costs. Facebook group pretty rapidly and 0:05:13.960 --> 0:05:17.120 the company received some investment capital, but it needed to 0:05:17.240 --> 0:05:20.359 establish a way to generate more revenue. See, in the 0:05:20.400 --> 0:05:23.840 world of startups, there are a couple of different pathways 0:05:23.960 --> 0:05:26.679 you can try to take. Actually there's more than a couple, 0:05:26.880 --> 0:05:30.360 but there's really only a couple of successful pathways. One 0:05:30.880 --> 0:05:33.880 is to become attractive enough as a product, service, or 0:05:33.920 --> 0:05:36.960 business that some other bigger fish is going to come 0:05:37.000 --> 0:05:39.760 along and scoop you up in an acquisition and you'll 0:05:39.800 --> 0:05:43.560 cash out with millions of dollars. In fact, that fuels 0:05:43.600 --> 0:05:46.480 a ton of the startup culture these days, and I've 0:05:46.520 --> 0:05:48.400 talked about it in the past about how I think 0:05:48.440 --> 0:05:52.400 it's a pretty dangerous and unhealthy trend. But the other 0:05:52.480 --> 0:05:56.080 way is to build a business that generates more money 0:05:56.080 --> 0:05:59.520 and revenue than it costs to operate the business, and 0:05:59.560 --> 0:06:01.640 to build it in such a way that you can 0:06:01.720 --> 0:06:05.360 scale up the business as it grows, making more money 0:06:05.440 --> 0:06:09.040 while also spending more to maintain a larger business. This 0:06:09.120 --> 0:06:12.159 is a really hard thing to do. A lot of 0:06:12.160 --> 0:06:15.240 companies struggle with it, and I'm guessing this is why 0:06:15.279 --> 0:06:19.479 the acquisition culture runs so strong in startups. It's not 0:06:19.600 --> 0:06:22.880 easy to be seen as important enough to acquire. That's 0:06:23.080 --> 0:06:25.360 I'm not trying to downplay that. It is tough. You've 0:06:25.360 --> 0:06:29.600 got to make something that is flashy enough and and 0:06:29.720 --> 0:06:32.320 potentially important enough for someone else to come along and 0:06:32.360 --> 0:06:36.360 say we want that. But that can be easier than 0:06:36.480 --> 0:06:39.440 creating a business model that supports itself throughout the various 0:06:39.440 --> 0:06:43.200 phases of a company's growth. That is really hard to 0:06:43.240 --> 0:06:46.360 do well. Facebook was looking to go that second route, 0:06:46.680 --> 0:06:50.120 you know, the actual business route, as opposed to getting acquired, 0:06:50.240 --> 0:06:53.960 and in November two thousand seven, the site introduced Facebook 0:06:54.000 --> 0:06:57.600 Ads Now. That product had a few different facets. One 0:06:57.720 --> 0:07:00.799 was that businesses would be allowed to create Facebook pages 0:07:01.240 --> 0:07:04.239 that could operate in ways similar to an actual human 0:07:04.240 --> 0:07:07.560 beings Facebook page works, and that would give folks the 0:07:07.640 --> 0:07:10.560 chance to quote unquote like a business that they were 0:07:10.600 --> 0:07:16.320 interested in. Another facet was the Facebook Marketplace, which exists 0:07:16.440 --> 0:07:21.720 to this day, and a third was a product called Beacon. Now. 0:07:21.840 --> 0:07:24.800 This product would be one of the first to inspire 0:07:24.920 --> 0:07:29.280 legal action against Facebook. You see, Beacon was a tool 0:07:29.400 --> 0:07:33.240 that would collect data from external websites sites that were 0:07:33.280 --> 0:07:36.280 not Facebook, and send that data back to Facebook. These 0:07:36.320 --> 0:07:40.160 were partnered websites companies that had partnered with Facebook to 0:07:40.160 --> 0:07:43.080 be part of this program. So if you went online 0:07:43.760 --> 0:07:47.120 and you started shopping for shoes, and if you were visiting, 0:07:47.120 --> 0:07:50.080 you know, these sites that were part of this Beacon program, 0:07:50.120 --> 0:07:52.640 your activities would be sent back to Facebook for the 0:07:52.640 --> 0:07:56.120 purposes of targeted advertising, which meant the next time you 0:07:56.200 --> 0:08:00.040 jumped on Facebook, you would start seeing shoe adds. The 0:08:00.040 --> 0:08:04.120 problem was Facebook didn't alert users to this program, nor 0:08:04.280 --> 0:08:07.480 did it allow people the chance to opt out of 0:08:07.520 --> 0:08:10.960 the service, and so Facebook was tracking users even if 0:08:10.960 --> 0:08:14.240 they weren't actively connected to Facebook at the time, as 0:08:14.280 --> 0:08:16.960 long as they were logged in and they were, you know, 0:08:17.040 --> 0:08:19.480 not necessarily logged in and active on the site, but 0:08:19.560 --> 0:08:22.960 like they hadn't logged out of their account, then this 0:08:23.040 --> 0:08:25.800 activity would continue to be tracked as they went to 0:08:25.800 --> 0:08:29.960 other sites. After users brought a class action lawsuit against Facebook, 0:08:29.960 --> 0:08:33.080 the company shut down Beacon in two thousand nine. That 0:08:33.120 --> 0:08:36.280 doesn't mean Facebook said goodbye to targeted ads. Far from it, 0:08:36.760 --> 0:08:40.120 and that brings us to something really important. Facebook makes 0:08:40.160 --> 0:08:44.559 the majority of its revenue from advertising, and ads only 0:08:44.600 --> 0:08:47.600 make money if there are people to see them. It 0:08:47.679 --> 0:08:50.640 would not make any sense to put up a billboard 0:08:50.760 --> 0:08:53.439 in the middle of Antarctica, right, I mean, no one 0:08:53.440 --> 0:08:56.240 would ever see the billboard. That would just be a 0:08:56.240 --> 0:08:59.160 waste of money. So you've got to put ads where 0:08:59.160 --> 0:09:01.600 people are going to see them. So Facebook's business model 0:09:01.679 --> 0:09:05.280 revolves around getting as many people to see as many 0:09:05.400 --> 0:09:09.560 ads as is possible. So for Facebook, that means getting 0:09:10.000 --> 0:09:12.160 as many people to log into Facebook as they can 0:09:12.559 --> 0:09:16.800 and then keeping those people on Facebook as much as 0:09:17.200 --> 0:09:20.679 is possible. That's the end goal, because it means serving 0:09:20.679 --> 0:09:23.880 more ads to more people. Well, we'll talk about stuff 0:09:23.920 --> 0:09:27.320 like engagement a bit later, but really engagement isn't the 0:09:27.360 --> 0:09:31.640 important bit like that engagement on Facebook. Like, if if 0:09:31.640 --> 0:09:34.920 Facebook could guarantee that it would get the same number 0:09:35.000 --> 0:09:39.679 of ads viewed without worrying about engagement, they would drop 0:09:39.760 --> 0:09:42.480 the whole thing about engagement, trust me. So the important 0:09:42.520 --> 0:09:46.880 bit is really just getting eyeballs on ads. That's it. Now, 0:09:46.880 --> 0:09:49.080 you could argue that the sole purpose of Facebook, at 0:09:49.160 --> 0:09:52.640 least from the business standpoint is just that getting eyes 0:09:52.640 --> 0:09:57.360 on ads. The features, the connectivity, all of that stuff 0:09:57.520 --> 0:10:00.400 is just the bit that brings folks in to use 0:10:00.440 --> 0:10:03.240 the platform. But from a revenue side, it's just about 0:10:03.280 --> 0:10:06.000 getting as many folks to look at ads as as possible. 0:10:06.559 --> 0:10:09.480 That's where the algorithm comes into play. And when people 0:10:09.520 --> 0:10:12.240 talk about Facebook algorithms, they typically mean a couple of 0:10:12.280 --> 0:10:15.400 different ones. One is the way that Facebook determines what 0:10:15.640 --> 0:10:18.080 shows up in a user's news feed. What do you 0:10:18.120 --> 0:10:22.040 see when you log into Facebook. Longtime Facebook users often 0:10:22.120 --> 0:10:25.480 limit the fact that the site no longer posts stuff 0:10:25.520 --> 0:10:28.240 in reverse chronological order on your news feed. You used 0:10:28.280 --> 0:10:30.400 to be able to really do that for real, Like 0:10:30.480 --> 0:10:32.839 you would see the most recent posts at the top, 0:10:33.559 --> 0:10:36.960 and you could just scroll down and you go back 0:10:36.960 --> 0:10:39.720 in time. You would see the older posts, like the 0:10:39.760 --> 0:10:42.120 from most recent to the oldest, and you could get 0:10:42.160 --> 0:10:45.280 caught up. Like you could actually do that, But that 0:10:45.400 --> 0:10:47.559 means that your time on Facebook would be kept too 0:10:47.640 --> 0:10:50.320 fairly short bursts unless you've just got a lot of 0:10:50.400 --> 0:10:54.640 chatty friends who are constantly posting, And since revenue comes 0:10:54.679 --> 0:10:57.120 from having more people seeing the site for as long 0:10:57.160 --> 0:11:00.960 as possible, that's not great for Facebook, right That's why 0:11:01.080 --> 0:11:04.679 the reverse chronological order is not a huge priority for Facebook, 0:11:04.679 --> 0:11:07.960 because even though users might love it, they wouldn't necessarily 0:11:08.000 --> 0:11:10.760 spend as much time on the platform. So the company 0:11:10.800 --> 0:11:14.480 set out to make algorithms that would select content across 0:11:14.520 --> 0:11:17.959 your friends and interests. In an effort to keep users 0:11:18.160 --> 0:11:22.559 glued to the site longer. You might end up missing 0:11:22.600 --> 0:11:26.040 stuff from your friends. In fact, I guarantee that's happening 0:11:26.080 --> 0:11:28.800 to you if you are on Facebook, that you are 0:11:29.480 --> 0:11:32.200 not seeing stuff that some of your friends are posting 0:11:32.240 --> 0:11:35.520 because the algorithm isn't promoting it to you, And it's 0:11:35.520 --> 0:11:38.480 because the algorithm chose to promote something else for you 0:11:38.520 --> 0:11:41.640 to see instead of the stuff that your friends are posting. 0:11:42.480 --> 0:11:44.920 We can also talk about algorithms in the sense of 0:11:45.000 --> 0:11:48.880 advertising algorithms, that being the algorithms that determine which ads 0:11:48.920 --> 0:11:52.480 get displayed to a specific user, But the news feed 0:11:52.480 --> 0:11:54.800 algorithm tends to be the big one that most people 0:11:54.840 --> 0:11:58.520 talk about when they say the Facebook algorithm. So this 0:11:58.600 --> 0:12:01.760 has actually gotten Facebook into trouble a few times, even 0:12:01.800 --> 0:12:05.480 before we started seeing stuff like the Cambridge Analytica scandal, 0:12:06.040 --> 0:12:09.760 or we started seeing the various times that that Congress 0:12:09.800 --> 0:12:15.400 has called Facebook executives to testify about stuff like misinformation 0:12:15.679 --> 0:12:19.319 and hate speech. Way back in two thousand fifteen, content 0:12:19.480 --> 0:12:23.800 sites in general saw a seismic shift because of something 0:12:23.840 --> 0:12:27.240 Facebook did, and this would end up disrupting the entire 0:12:27.320 --> 0:12:32.400 industry of online content, from news organizations to entertainment sites. 0:12:32.800 --> 0:12:36.160 And that shift had a name. It was called pivot 0:12:36.559 --> 0:12:41.319 to video. Just saying those words fills me with dread. 0:12:41.559 --> 0:12:47.440 So making content is hard. I do it nearly every day. 0:12:47.720 --> 0:12:51.480 It can be grueling, you know, writing up long pieces 0:12:51.559 --> 0:12:54.040 takes a lot of time and research and a lot 0:12:54.120 --> 0:12:56.640 of specialized talent. If you want to do it well, 0:12:56.679 --> 0:12:58.960 I mean you could just be a content farm and 0:12:59.600 --> 0:13:05.360 dump endless numbers of articles that are hastily written, badly researched, 0:13:05.760 --> 0:13:09.520 and poorly edited. You can do that, Uh it doesn't 0:13:09.920 --> 0:13:12.040 you know. You can try and make it up in volume, 0:13:12.160 --> 0:13:14.960 but if you go the quality route, you tend to 0:13:14.960 --> 0:13:18.640 see better results. Uh. And in two thousand and fifteen, 0:13:18.679 --> 0:13:21.320 we saw a convergence of several things that would prompt 0:13:21.360 --> 0:13:23.720 a lot of content companies to change the way they 0:13:23.760 --> 0:13:28.080 do business. First, AD revenue for owned and operated sites 0:13:28.360 --> 0:13:31.920 was hurting. So that by that, I mean if you 0:13:31.960 --> 0:13:35.040 were a media company and you had your own website, 0:13:35.679 --> 0:13:38.480 you were starting to see lower amounts of traffic, which 0:13:38.520 --> 0:13:42.120 meant you were also seeing lower payouts and ads. It 0:13:42.240 --> 0:13:45.360 was probably devaluing the ads that were on your site. 0:13:45.559 --> 0:13:48.920 In other words, when companies make these ad deals, they 0:13:48.960 --> 0:13:53.520 negotiate with the advertisers a certain amount per view or 0:13:53.559 --> 0:13:57.000 per click or per action or whatever the criteria are, 0:13:57.520 --> 0:14:00.760 and the as a whole, like, if you're doing really well, 0:14:01.160 --> 0:14:03.480 then you can demand a higher rate. It's kind of 0:14:03.520 --> 0:14:07.080 like how in the US commercials during the Super Bowl 0:14:07.240 --> 0:14:11.640 are incredibly expensive because everyone knows that that's where a 0:14:11.640 --> 0:14:15.959 ton of attention happens to be focused at that particular time, 0:14:16.080 --> 0:14:19.480 So the ad space on a game of the super 0:14:19.520 --> 0:14:23.320 Bowl ends up being really, really, really valuable. The same 0:14:23.360 --> 0:14:25.200 sort of thing. If your site is doing really well, 0:14:25.320 --> 0:14:28.920 then you can command a higher price. But at this point, 0:14:29.280 --> 0:14:33.120 content companies were starting to have difficulty. They were seeing 0:14:33.120 --> 0:14:36.400 there there the value of their ad deals going down, 0:14:36.400 --> 0:14:39.840 not up. Traffic was going down, not up, And a 0:14:39.920 --> 0:14:43.280 lot of sites are dependent upon stuff like search engines 0:14:43.320 --> 0:14:46.440 as well. If you rank high in Google, that's really important. 0:14:46.920 --> 0:14:50.040 The Google algorithm is another example of an algorithm that 0:14:50.080 --> 0:14:52.920 you could argue could be evil, but it means that 0:14:53.280 --> 0:14:55.520 there are more chances for people to find your work. 0:14:55.560 --> 0:14:58.120 If you're ranking high in search, right, someone searches a 0:14:58.120 --> 0:15:01.000 particular term, your site comes up. That's great for you, 0:15:01.640 --> 0:15:04.760 and thus more people will end up going to your 0:15:04.760 --> 0:15:07.280 site and seeing the ads that are on your site, 0:15:07.400 --> 0:15:11.040 and you generate revenue. We saw some companies experiment with 0:15:11.080 --> 0:15:13.760 stuff like paywalls, you know, getting away from the whole 0:15:13.760 --> 0:15:18.080 advertising thing and saying, well, we will instead uh invite 0:15:18.240 --> 0:15:22.160 users to pay a subscription to get our content. A 0:15:22.200 --> 0:15:24.600 lot of users balked at that because they were used 0:15:24.600 --> 0:15:27.720 to getting their content for quote unquote free, though we 0:15:27.760 --> 0:15:31.200 know it wasn't really for free. It was just that 0:15:31.240 --> 0:15:33.640 the money wasn't coming directly out of the user's pocket 0:15:33.680 --> 0:15:36.120 in those cases. Now, a big part of the problem 0:15:36.160 --> 0:15:38.800 was that rather than go on owned and operated sites, 0:15:38.840 --> 0:15:41.720 a lot of people were just gobbling up content on 0:15:41.800 --> 0:15:46.239 places like Facebook. So social network platforms became a competitive 0:15:46.280 --> 0:15:49.960 marketplace for content creators, with many trying to find ways 0:15:50.040 --> 0:15:53.920 to craft their work. Uh. Just so that it would 0:15:53.960 --> 0:15:56.960 be effective when you share it on social media doesn't 0:15:56.960 --> 0:15:59.280 mean it would be the best work you've ever made, 0:15:59.280 --> 0:16:01.320 but rather you were trying to make stuff that was 0:16:01.520 --> 0:16:04.400 share able. Oh man, I remember this era and it 0:16:04.440 --> 0:16:09.400 was bleak anyway. At the same time, you had smartphone 0:16:09.440 --> 0:16:12.160 companies that were really coming into their own I mean, 0:16:12.160 --> 0:16:17.200 the smartphone was starting to dominate the computer space. They 0:16:17.280 --> 0:16:19.760 had premiered less than a decade earlier, but the swift 0:16:19.800 --> 0:16:22.880 proliferation of smartphones meant that people were starting to consume 0:16:22.960 --> 0:16:25.760 content a little bit differently than they had before. A 0:16:25.800 --> 0:16:29.440 good site would optimize for mobile access, and we started 0:16:29.440 --> 0:16:31.480 seeing people say that the future of the web was 0:16:31.600 --> 0:16:35.200 really and how it would cater to mobile devices, and 0:16:35.240 --> 0:16:39.560 we saw various content sites looking for ways to cut costs. 0:16:39.680 --> 0:16:43.160 This was the other big element here. And one way 0:16:43.480 --> 0:16:46.520 is you can really reduce your writing staff. You can 0:16:46.600 --> 0:16:48.920 have layoffs, but you still need to make a lot 0:16:48.960 --> 0:16:52.560 of content or else you have no inventory to sell 0:16:52.640 --> 0:16:56.240 to advertisers, and then the revenue drives up. And that's 0:16:56.280 --> 0:16:59.520 what would set the stage for a really big problem. 0:16:59.560 --> 0:17:10.680 Alex lay More after we take this short break. Okay, 0:17:10.800 --> 0:17:14.800 this all brings us up to the pivoting to video movement. 0:17:15.160 --> 0:17:20.480 So in early Facebook announced a shift to video, indicating 0:17:20.520 --> 0:17:25.080 that the platform would prioritize video content from third party publishers, 0:17:25.440 --> 0:17:29.680 and that implies that it would simultaneously de emphasize content 0:17:29.800 --> 0:17:32.159 that wasn't videos. So, if you were a third party 0:17:32.200 --> 0:17:35.720 publisher and you were making stuff like articles like how 0:17:35.760 --> 0:17:37.760 staff works is a great example. I used to write 0:17:37.760 --> 0:17:40.320 for how Stuff Works. And if you were doing these 0:17:40.400 --> 0:17:42.320 articles and you were hoping that at least some of 0:17:42.359 --> 0:17:45.160 your traffic was going to come from social networking sites, 0:17:45.480 --> 0:17:48.560 you hear this news and you think, oh, well, now, 0:17:48.760 --> 0:17:51.080 even if I write a great article and if not 0:17:51.240 --> 0:17:55.080 given a fantastic title and it's really share able, the 0:17:55.119 --> 0:17:58.280 Facebook algorithm is going to de emphasize it because it's 0:17:58.280 --> 0:18:02.000 not video. It's written con tent, and the Facebook algorithm 0:18:02.040 --> 0:18:06.119 has decided to promote video content instead. Uh. There were 0:18:06.160 --> 0:18:09.680 a lot of content companies that legitimately got real nervous 0:18:09.680 --> 0:18:13.000 about this for good reason. So the message appeared to be, 0:18:13.400 --> 0:18:15.760 if you want your content to be seen on Facebook, 0:18:16.040 --> 0:18:20.840 you should probably put it in short form video content form. 0:18:20.920 --> 0:18:23.720 And now, now why would Facebook even do this? Well, 0:18:23.760 --> 0:18:25.919 one big reason is that if you click on a 0:18:26.040 --> 0:18:30.480 link in Facebook to go read an article, you leave Facebook. 0:18:31.080 --> 0:18:33.719 And since the revenue model for Facebook is again all 0:18:33.760 --> 0:18:36.640 about keeping as many eyeballs on the site for as 0:18:36.680 --> 0:18:41.840 long as possible. That means Facebook hates that but video 0:18:42.040 --> 0:18:44.640 and Facebook could build a media player, and they did 0:18:45.000 --> 0:18:48.480 that could work within the news feed and just host 0:18:48.600 --> 0:18:51.280 videos natively on the Facebook site so you didn't go 0:18:51.359 --> 0:18:54.280 away from Facebook to watch the videos. They played within 0:18:54.400 --> 0:18:57.440 the Facebook page, so people could just click on those 0:18:57.520 --> 0:19:00.880 videos and watch them and not leave face book. Facebook 0:19:00.960 --> 0:19:04.120 loved that idea. If the user news feeds just filled 0:19:04.160 --> 0:19:07.000 up with video after video and all of them called, 0:19:07.200 --> 0:19:10.800 you know, Facebook home, even though the actual content was 0:19:10.840 --> 0:19:14.360 coming from other companies, well, that would just work out 0:19:14.400 --> 0:19:18.280 fine for Facebook. The shift to video would have an 0:19:18.440 --> 0:19:22.400 enormous impact on content companies. Several companies began cutting back 0:19:22.400 --> 0:19:25.520 on staff, keeping a small group of writers and editors 0:19:25.560 --> 0:19:29.119 whose main job wasn't to publish articles, but rather write 0:19:29.119 --> 0:19:33.040 and produce as many videos as possible. I saw this 0:19:33.119 --> 0:19:35.399 happen in front of my own eyes. But that's a 0:19:35.480 --> 0:19:38.960 story for a different time. Anyway, a lot of talented 0:19:39.000 --> 0:19:42.080 people found themselves out of a job as dozens of 0:19:42.119 --> 0:19:46.480 content companies made the pivot to video. You also heard 0:19:46.480 --> 0:19:48.520 a lot of stories about this is kind of around 0:19:48.520 --> 0:19:51.560 the same time where the perception of journalism was taking 0:19:52.200 --> 0:19:55.040 a pretty big hit, like people were starting to say 0:19:55.080 --> 0:19:58.240 that journalism was dead. That kind of ties into this 0:19:58.359 --> 0:20:01.600 too well. Anyway, companies chose to pivot to video in 0:20:01.680 --> 0:20:05.760 part because they could have a smaller video department than 0:20:05.800 --> 0:20:09.399 a writing staff. Often that would also involve bringing in 0:20:09.520 --> 0:20:13.040 new employees out of college to work on the video team, 0:20:13.520 --> 0:20:17.119 because new employees often have lower salaries than more established 0:20:17.119 --> 0:20:20.840 employees who might be let go. But companies wouldn't have 0:20:20.880 --> 0:20:24.479 done this unless the revenue side was also in place, right, Like, 0:20:25.160 --> 0:20:27.560 it's one thing to cut costs, but it means nothing 0:20:27.560 --> 0:20:29.720 if you do that if you're not also bringing in 0:20:29.760 --> 0:20:32.439 the cash. You have to be bringing in revenue. And 0:20:32.480 --> 0:20:36.719 the problem was the industry was responding to a misrepresentation 0:20:36.920 --> 0:20:40.760 of the facts uh an error in other words, or, 0:20:41.080 --> 0:20:47.000 if you are particularly cynical, a lie. See. In January, 0:20:47.160 --> 0:20:51.119 Facebook presented some pretty startling figures saying that Facebook users 0:20:51.320 --> 0:20:55.560 were watching more than a billion videos per day. What's more, 0:20:55.840 --> 0:20:59.440 the company said that users were watching tons of ads 0:20:59.600 --> 0:21:02.359 in the videos in the process, that, in other words, 0:21:02.560 --> 0:21:05.600 producing videos to publish on Facebook would be a great 0:21:05.640 --> 0:21:07.720 way to show a lot of ads to a lot 0:21:07.760 --> 0:21:10.639 of people, and the revenue would come flowing in for 0:21:10.880 --> 0:21:15.160 everyone concerned. But things were not quite playing out that way. 0:21:15.359 --> 0:21:18.400 Some companies had gone so far as to ditch their 0:21:18.440 --> 0:21:23.119 owned and operated sites and they relied exclusively on building 0:21:23.119 --> 0:21:26.800 out content to live on sites like Facebook, which I 0:21:26.840 --> 0:21:28.919 need to say, in case you didn't pick it up 0:21:28.920 --> 0:21:32.920 from my tone, is a terrible idea. They were trying 0:21:32.960 --> 0:21:36.280 to respond to a rapidly shifting landscape, so in their 0:21:36.320 --> 0:21:38.800 minds they were saying, well, if no one's coming to 0:21:38.840 --> 0:21:43.000 our website, then we're just wasting money maintaining it, so 0:21:43.080 --> 0:21:45.919 let's just change over to Facebook. So the pivot to 0:21:46.000 --> 0:21:49.960 video phrase would also end up taking on an additional meaning. 0:21:50.000 --> 0:21:52.479 A couple of them, for example, one of them was 0:21:52.600 --> 0:21:55.720 a cheeky way to refer to layoffs. You know, layoffs 0:21:55.720 --> 0:21:57.800 are coming up. It's because the company is quote unquote 0:21:57.840 --> 0:22:03.800 pivoting to video. Um, so that that's kind of tells 0:22:03.840 --> 0:22:05.879 you all you need to know about that particular phrase, 0:22:05.960 --> 0:22:11.359 like it became a euphemism. Meanwhile, the revenue numbers weren't 0:22:11.400 --> 0:22:14.560 actually matching up with what was to be expected based 0:22:14.600 --> 0:22:17.840 upon Facebook's kind of sales pitch to the industry, and 0:22:17.920 --> 0:22:22.640 in February two sixteen, Facebook essentially said, whoops are bad. 0:22:23.040 --> 0:22:25.639 Remember when we talked about how many ads the average 0:22:25.680 --> 0:22:29.840 person was watching in videos, It turns out we overestimated 0:22:29.880 --> 0:22:33.160 that a bit, perhaps by as much as eighty percent. 0:22:33.840 --> 0:22:37.280 So imagine for a moment that you want to open 0:22:37.359 --> 0:22:40.120 up a business. Let's say it's a bakery and you're 0:22:40.160 --> 0:22:43.640 looking for the perfect place to locate it. And you 0:22:43.720 --> 0:22:46.399 have a realtor who tells you that they have a 0:22:46.440 --> 0:22:48.480 spot that's in an area that gets a ton of 0:22:48.520 --> 0:22:52.280 foot traffic, and it's ideal for your location, it's in 0:22:52.320 --> 0:22:54.960 your price range, it's ready to go. So you signed 0:22:54.960 --> 0:22:56.960 the deal, you rent out the spot, you build out 0:22:56.960 --> 0:22:59.359 your bakery. But then you find out the realtor quote 0:22:59.440 --> 0:23:03.879 unquote or estimated the foot traffic by That would be 0:23:03.920 --> 0:23:07.040 a huge blow to your bakery business, right, I mean, like, 0:23:07.160 --> 0:23:09.800 now you don't have that foot traffic to depend upon 0:23:10.040 --> 0:23:12.880 to get customers. It's gonna be way harder. Doesn't mean 0:23:12.880 --> 0:23:16.040 that you've necessarily outright failed, but you're not going to 0:23:16.200 --> 0:23:19.320 have the path to success you thought you were. You 0:23:19.400 --> 0:23:22.119