Categories: Life

Google and Facebook Diversifying Away from Advertising

Rick Webb wrote an article last year on how Google and Facebook will eventually suffer from a massive devaluation. This is because while they dominate the digital advertising market, they cannot displace TV advertising easily.

There’s an interesting comparison to traditional media companies, Disney, Time Warner, and Viacom:

Disney made $55 billion in revenue last year. Of that revenue, just $8.5 billion of it came from advertising, or just 15 percent. This includes all the revenue from ABC, the various Disney channels, ESPN, and A&E.

A full 17 percent of Time Warner’s revenues come from HBO alone, making its ad-to-non-ad ratio better than either Facebook or Google. In total, just 43 percent of Time Warner’s revenue comes from advertising. For Viacom, it’s 38 percent.

“Google’s $350 billion haircut”, Rick Webb

Google and Facebook are heavily reliant on digital advertising for their revenue and this puts them at a disadvantage unless they start to diversify their income streams. Right now, if you are trying to get your product or service in front of consumers on the internet, you’re going to use Google or Facebook to advertise. This makes them powerful, but also vulnerable as they extend their reach into other marketplaces and try to dismantle TV’s dominance for brand advertisement.

According to the article, tech companies do not have an inherent advantage when it comes to content production. Disney, Time Warner, etc. already make a lot of content and own the equipment, spaces, software, and hire a huge number of script writers and actors and producers to create their content.

Tech companies, like Facebook and Google and Netflix and Amazon, who try to produce content will basically be cloning the processes that Disney and others already have in place. They will be running behind in the marathon race to create more content that can be bundled with ads (and specifically brand advertising).

Traditional Content Production vs. User Generated Content

However…what the article forgets is that Google and Facebook are sitting on possibly the largest amount of UGC (User Generated Content) in comparison to all other companies.

Google has YouTube, which has a massive amount of user-generated content, over 5 billion videos uploaded with over 1.9 billion MAU (Monthly Active Users). Facebook has Instagram which has 1 billion MAU and over 100 million photos and videos uploaded.

There is absolutely no way that Disney and other media companies can come close to that amount of content production. The traditional process is to hire producers, script writers, actors, wardrobe and makeup artists, and a whole set of staff to produce many 30 minute episodes or 1 to 2 hour movies. While it’s possible to make this process very efficient, it can never match the scale that Google and Facebook have.

Platforms that produce user generated content (UGC) vs TV/movie production studios. UGC scales in ways that the traditional TV/movie production process cannot.

Instead of relying on producing hit after hit, Google and Facebook can diversify and rely on their users/creators to produce content and let the users worry about producing hit after hit. Netflix and Amazon do not have that option, they have very little user-generated content which is why they are going down the same path as traditional media companies and why they do not have an inherent advantage.

YouTube and Instagram are the content production places of the future. If Google and Facebook double-down on making it easier for users/creators to create new content, and making it easier to produce higher quality content that can compete with the highest quality content from Disney, HBO and traditional media companies, then Google and Facebook will own the future and disrupt TV advertising.

Also, I mentioned Amazon above. They actually do have a way to get a lot of user-generated content and rely on their users/creators to produce lots of content: Twitch.tv. Right now it’s for gamers and video game streaming, but Twitch has roots in Justin.tv which was made for life/selfie streaming which means it’s possible for more content like talk shows and selfie streams to start appearing on Twitch, which would put it directly in competition with YouTube and Instagram.

Future of Digital Ads and Content Production

This is why Google and Facebook have such high valuations. As long as they treat users/creators with respect (fewer privacy scandals, better content production tools) and shower them in advertising dollars and give good ROI to advertisers, they will continue to dominate the digital advertising platform and eventually pose a significant threat to TV advertising and gain lots of market share in brand advertising. I think brands will have to start getting used to going niche though and finding their true fans and followers instead of massively advertising to everyone.

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Categories: Web Dev Training

3 Great Videos about GraphQL

Since GraphQL is a hot topic and a new way of creating APIs for client devices and applications, it helps to learn what it is, how it’s used and why it’s becoming quickly adopted for new projects. So here are 3 great videos on YouTube that explain why your team should explore GraphQL and consider it as a viable technology for your next project.

Lessons From 4 Years Of GraphQL

A reflection on GraphQL’s successes and its evolution within Facebook, the company at which it originated.

Connect Your Angular App To Any GraphQL Backend

At Facebook they use React (it was created there too!) but a lot of companies use AngularJS and now are adopting Angular 2/4/5+. This video shows you how to use it with an Angular app. Angular offers a more complete framework in contrast to React; so if you’re already using it, it’s definitely possible to use it with APIs such as GitHub.

Implementing & Using GraphQL at GitHub

GitHub started to use it for their API in 2016 and revealed it at their yearly event GitHub Universe. They show how they implemented part of the API and then show the client-facing portion through the query explorer. The query explorer is a powerful way to construct and test different API queries.

Categories: Portfolio

Participated in a Hackathon: ArthritisHack 2017

On the weekend of October 13th to 15th, the #ArthritisHack hackathon took place at the Mars Discover District. It was a cool event and I haven’t attended a hackathon in ages. The last hackathon I attended was a hackathon sponsored by LinkedIn in the same place and before that it was a kind of catch-all hackathon with multiple APIs in the west end of Toronto where people used the Yellow Pages API and Soundcloud API.

At this event, with a team of five, we built a small automated marketing platform for arthritis-focused charity events and built a chatbot to engage people and raise awareness about arthritis.

Continue reading “Participated in a Hackathon: ArthritisHack 2017”

The Facebook experiment has failed. Let’s go back.

The Facebook experiment has failed. Let’s go back.

In the end, there is a lot to learn from this massive social experiment. Your friend circle and impulsive actions such as ‘likes’ cannot predict what you want to read. Indiscriminate sharing is a bad idea. A large social network isn’t the best way to find information.

We need to go back to smaller communities. Where people aren’t lost in the mediocre averages of large networks. That’s where ideas flourish.

Sounds like he wants the circles of Google+ (which makes it super easy to only share things with a select few people) or the ultra small social network of Path.