Do Facebook’s efforts to make money come at the cost of the user experience? Company executives David Fischer (vice president of marketing and business partnerships) and Sam Lessin (who heads the Identity Product Group) said today that they don’t see it that way — instead, Fischer argued that the Facebook team thinks about user experience and advertising as “either side of the same coin.”
Fischer and Lessin were speaking at the Techonomy conference, where Fischer argued that the right piece of advertising in your newsfeed is “actually better content in a lot of cases.” For example, he said that he’s passionate about snow, so an ad from Squaw Valley would be very relevant to him right now.
Lessin, meanwhile, repeatedly compared Facebook’s newsfeed to the “ideal newspaper,” one that the company is always trying to improve so that it delivers the most relevant content to each user. So it’s natural to try to think about “the economic component” of the experience as well, rather than treating it as something completely separate.
“There are plenty of brands and companies that I want to interact with,” Lessin said.
Moderator David Kirkpatrick (who runs the conference and also wrote The Facebook Effect) praised Facebook’s recent efforts to incorporate advertising into its product decisions, and he suggested that this is a big change in the company’s thinking. Lessin countered that it depends on the “time horizon.” Facebook’s monetization plans are a relatively recent development, but he said that even a few years ago, if you asked someone at the company how they saw the product evolving decades from now, they would have given answers that were similar to his.
Lessin didn’t stop at the newspaper comparison. He also said that Facebook and other new technologies have given us three new superpowers — the ability to remember anything, to talk to someone across the world, and to process massive amounts of data. Facebook didn’t invent those technologies, but it’s a big part of the change.
“How do we want to leverage our new superpowers?” he asked.
Elaborating on the idea that Facebook is dramatically transforming industries, Kirkpatrick asked if Facebook might eventually expand beyond just convincing people to buy new products and eventually create new types of commerce and new types of companies. Lessin agreed, but he said also we shouldn’t devalue the ability to sell “things like toothpaste more effectively.” After all, he said, “Toothpaste is an awesome product.”
Kirkpatrick also asked about a specific product, namely the Promoted Posts feature, where individual users can pay to promote their content in the newsfeed. Kirkpatrick has tested out the feature (as have other writers), and he complained that there’s not enough transparency about the results. Fischer and Lessin said that Facebook actually provides metrics like organic reach, paid reach, and engagement — it sounds like Kirkpatrick just didn’t find them. There’s no “philosophical” reason Facebook couldn’t make those numbers more prominent, Lessin said, but there’s a tension between making the data visible and not overwhelming the user.
The interview both opened and closed with one of the big issues facing Facebook — its mobile strategy, particularly its ability to monetize. Fischer kicked things off by pointing to Facebook’s most recent earnings report, which stated that 14 percent of the company’s ad revenue came from mobile. Lessin closed things off by declaring that Facebook’s mobile opportunities are “unbelievably exciting,” in part because smartphones unlock the social network’s latent potential: “In some ways, we were a mobile company that got started ahead of mobile.”
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...
Dave is a founding partner of Gold Hill, and has provided financing to early and growth stage technology and life science companies for over 20 years. Prior to Gold Hill, Dave was involved with market development, deal sourcing and credit underwriting for 12 years at Silicon Valley Bank and for 5 years at Bank of New England’s Technology Lending Division. Dave’s primary markets include the Boston area, New York, Texas and Colorado. Dave’s past and current investments include Akamai...
Sam Lessin is the co-founder and CEO of Drop.io. Prior to Drop.io he worked at Bain & Company. He graduated from Harvard University (Magna Cum Laude & PBK distinctions) He currently works as a Product Manager for Facebook in California.