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Social Media Scene: Twitter, Facebook and LinkedIn

By Spencer X Smith
August 01, 2016

Why does Twitter bleed cash while Facebook prints money? And why should you care?

Twitter revealed earlier this year (via its annual 10-K filing) that it has lost over $2 billion dollars since it launched a decade ago.

Why? It boils down to the thing that is rarest in the digital realm: attention. When was the last time you heard someone say, “I'm bored?” Does that saying even exist anymore? How can you possibly be bored when you have an unlimited amount of options to capture your attention? So, why has Twitter lost $2 billion?

Here's my interpretation: Compared with LinkedIn and Facebook, Twitter can't retain the visitors using its service. It's really, really hard to attract visitors to your website/platform/app, and it's even harder to get them to stay. Platform users spending less time equals less ad revenue.

The 'Short-Attention Span Theater'

If you're using Twitter, literally every 140 characters (or less) are inviting you to go somewhere else. Why does one-third or one-half of my company's website traffic originate from Twitter? Because I use the platform to invite people to my website. It's an awesome deal for me (since it's free), but it's a lousy deal for Twitter.

Social Media Companies

Before discussing Facebook and LinkedIn, let's pause for a moment to analyze what motivates social media companies. The vast majority of services available on each platform are free. How are these companies making money? To best optimize the social media marketing strategy for your firm, it's important to understand how these platforms generate revenue and why they're willing to give so much away for free, to both you and everyone else.

Here's a simple analysis from YouTube: This site transmits the second-most video content through the Internet, trailing Netflix. YouTube is free, however, while Netflix is not. Which company owns YouTube, by the way? Google.

Is it free for YouTube/Google to host your videos on their servers? Of course not. How does Google make money from YouTube, then? Once someone clicks on a link to start a video, Google can ' at its discretion ' show an ad before or during the video. No longer does Google need web visitors to click on ads above or to the right of their search results. The more videos people watch from YouTube/Google, the more the advertisers pay into their coffers.

Of the three social media platforms we're discussing (Twitter, Facebook, and LinkedIn), only one (LinkedIn) has a premium membership. If you want more in-depth information about certain people, you need to pay for it. The other companies simply make their money from serving you ads. So, how are these platforms sure that you're going to see ' and more importantly ' act on those ads?

Far and away, their most important objective is to capture and retain your attention. Think about it this way: If you were the only one on Facebook, would it be worth anything? It only begins to gain value as many, many people use it to share their lives. Facebook as a website, or Facebook as an app on a phone or tablet, is a captive platform. In other words, everything you see in their ecosystem ' so to speak ' is exactly what they want you to see.

The Newsfeed portion of your Facebook site uses complex algorithms to gauge the importance of your friends' posts. Instead of simply being a repository for a bunch of status updates, selfies, and videos, Facebook has become a purveyor of content. As a result, Facebook wants to show you things that are important, entertaining, or engaging to you.

Everyone has a unique Facebook experience as a result of this complex software. As an advertiser, if you'd like to promote a post to 25-30-year-old, college-educated women in Chicago who have recently gotten engaged, Facebook is the place to do it since it has received that data directly from the person herself. Facebook is the best social platform at retaining its visitors, and that's why it made over $1 billion last quarter. How? Here's a statement and a question:

Google Chrome is the most popular web browser. What's #2? Before I reveal #1, please do this ' take out your phone, open Facebook, and click a link to an article appearing on your Newsfeed. See that big blue bar at the top? That's the Facebook browser. Eighty percent of people are using Facebook on their phones, and whenever you open links, Facebook is watching what you're doing. Just as importantly, when you close the window of the article you've read, you're still within the Facebook app. Platform users spending more time, which equals more ad revenue.

What's the #2 most-used web browser? Not Internet Explorer, Safari or Firefox. It's Facebook. What about LinkedIn? Why did LinkedIn launch a dedicated publishing platform? Instead of sending its visitors to another website it does not own, it encourages people like you and me to use this as our blog. LinkedIn wants to show its visitors compelling, long-form business-related content, and because it provides its publishing platform for free, its repository of thought leadership grows daily.

How to Get More Attention

What can you do ensure you get more social media attention from Facebook, LinkedIn and Twitter? Think like they do. Think to yourself, “Are these platforms giving me the opportunity to use the tools they have? Can I help them keep their visitors on their site?”

Here are three simple tips you can implement to earn more social media attention:

1) Don't link to YouTube videos on your Facebook posts. Upload your recordings directly to Facebook instead. Facebook wants people to watch videos on its platform. This is referred to as a “native” upload. Instead of a link requiring someone to push “play,” Facebook auto-plays videos as a user scrolls through his or her Newsfeed. By the way, these videos auto-play without volume, so close-captioning your videos is a major plus. 2) If appropriate, use the LinkedIn publishing platform (LinkedIn calls articles like these Posts) to write articles educating your target audience. LinkedIn rewards you by letting your entire network know that you have published something new. 3) Keep sending visitors to your website by posting to Twitter. Either they'll figure out this whole “losing money” thing or go out of business. In the interim, link to your own site in your tweets and watch traffic to your website soar.


Spencer X. Smith is the founder of Spencer X. Smith Consulting. He is also an instructor at the University of Wisconsin and a faculty member of the State Bar of Wisconsin's Business School for Lawyers. He may be reached at spencerXsmith.com.

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