The Creativity Vacuum – Why Newspapers, Twitter and Facebook have run out of ideas

No one can deny the success of Facebook and Twitter – the astronomical user base of these Internet giants speak for themselves. However one thing they both lack is creativity in their business models.

Facebook currently has over 500,000,000 users, yes that’s 500 million! An almost unbelievable statistic, coupled with the fact that most users are active it is an Internet behemoth and will almost certainly be a very profitable machine.

Twitter has fewer active users but their figures are also very impressive with a user base of around 200 million.

Both of these platforms outshine even online newspapers for breaking news and events to family and friends, so much so that online newspapers are actually becoming slightly less relevant than they were just a few years ago. You only have to take the recent Osama Bin Laden death to know that most of us get a lot of our news directly from our online networks on both of these platforms.

Creativity Vacuum

Where I think Twitter and Facebook fail is in their business models. The current thinking (or lack thereof) is that build up users and then start displaying advertising from 3rd parties amongst the content on various pages.

Google was the first large Internet player to do this successfully and have reaped billions and billions of dollars in advertising revenue on this model and will continue to do so. Why this is successful is very simple, users search for information and Google displays as close to relevant information back to the user as their algorithms allow.

Newspapers do the same thing, they attract visitors to their websites and then display advertising amongst and over (annoying their users) content and generate most of their online revenue from doing so.

This model is a problem for Twitter and Facebook and Online Newspapers because users do not use or behave the same way on these sites as they do on Google and other search and retrieve related entities. We use Twitter and Facebook to inform others on what we are thinking, what we are doing and where we are going, we gather news from Online Newspapers to share ones that interest us to our networks or to keep ourselves up to date. In short we generally have conversations on Facebook and Twitter and we use newspapers to gather information on the days events.

What is needed from these entities is a creativity revolution, one that value adds the offerings to those of us that want to become power users.

Online Newspapers

I am going to use the Sydney Morning Herald and The Age Newspapers as these are clearly the best newspapers in Australia. Each day I visit both of these websites to read up on news and events and each day I try to avoid any annoying ads across these sites.

What if I became a member of either of these websites? I really get nothing in return, making the added value proposition worthless. However what if the hierarchy thought a little differently about their business model.

What if for say $100 per annum, I could get an enhanced mobile version for both my smartphone and my Android or iPad tablet? What if my membership included the ability to sell my unwanted sofa quickly and easily? What if I could sell my car, engage a real estate agent, advertise open positions at my company? What if all of this was included in one simple interface and for one simple price? I don’t know about you, but I would pay this money without a second thought. Why? Because I trust the company, I know they have the biggest user base and I know I have one place to go to do all of these if and when I choose!

Facebook

If you read the above with interest, could you imagine if Facebook did the same? This would send shivers up the spine of any newspaper across the globe, simply because newspapers have lost control of their users and have been slow to innovate. Facebook could very easily do the same thing and to be honest, I think they would win this battle. Facebook currently has the dumbest advertising platform of all of these entities combined.

As an example if you ever had the miserable pleasure of adding some of your favourite movies, books or music to your profile you will immediately notice your Facebook wall being filled up with junk advertising from related advertisers. They must have been up all night thinking about that one – pathetic!

Facebook is so bad with their business model that it only serves to annoy their base and this is a true crime in the online world and may someday open themselves up to competitors. It also will cost them billions in the long term as users will simply change their behavior.

Facebook should also offer an enhanced version one with stronger privacy cooler profiles and a tranche of new offerings including the above, classifieds, cars, jobs and houses. I should also want to store with the options to share HD Videos, HD Photography and enhanced mobile versions all for a simple annual fee.

Twitter

Twitter worries me, it is no longer a must-be destination for the average Joe consumer or small business. It is slowing down dramatically and may only useful in the future for disseminating news and events. Sure it is still relevant but it maybe just a niche player in a few years.

For the power user it still offers some great insights and I do get great information, but more so from a select group of people I follow.

Summary

In summary I think the advertising model is flawed across Online Newspapers, Facebook and Twitter and needs some real creativity. I am convinced the model of the future for sites that have massive user bases is enhanced offerings all paid for with one simple annual fee.

Facebook, SMH, The Age, Twitter

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About Peter J Ricci

Peter Ricci is the Director of Agentpoint.com.au, Business2.com.au, Ginga.com.au and ZooProperty.com and has been involved in designing and developing real estate systems and websites since 1997. In July 2001 Peter founded Business2.com.au to help real estate agents better understand the power of the Internet and the real estate landscape in Australia and New Zealand. Since then he has penned over 300 articles on a variety of subjects in the real estate technology industry. Business2.com.au is now the leading real estate technology site in Australasia.

19 Responses to The Creativity Vacuum – Why Newspapers, Twitter and Facebook have run out of ideas

  1. Nick May 9, 2011 at 10:26 am #

    I actually think the opposite. Payments to online services are not going to happen frequently. Why would you pay to sell your sofa online, when you can go to a different site for free and the only difference between the two is the latter shows ads for say trailer hire that you might need to move the sofa?

    People love free stuff, especially when something is valuable but doesn’t have a high monetary value. Thats why Facebook and Twitter could never have subscriptions.

    And that is why Google is as big as they are. Would you pay to do searches?

  2. Vic May 9, 2011 at 10:36 am #

    What an insightful article. There is a real opening for someone to start up their own machine from scratch and bring in the apps Peter is talking about.

    If Barack Obama can gain the billion dollar donations from twitter to win his presidential campaign, why couldn’t the same be done with a Facebook/twitter followers IPO to get the new “machine” researched and developed.

  3. andy May 9, 2011 at 10:52 am #

    oh my god
    Peter
    really ?

    you would hand over all your web experience to one website…you would be willing to be lost in your own bubble…after several years of this your world would become smaller and smaller and controlled by one website, where you do everything and you get all your information from and you pay them to keep you in the bubble as well.

    You have described the great danger of having a more effective business model on the web…I agree a great business model…but not good for humanity.

    all in my humble opinion of course Peter! πŸ˜‰

    andyd

  4. Vic May 9, 2011 at 11:05 am #

    Andy,
    The reality is that someone will do it. And because the internet is free and available to everyone, that model will be superseded in time and something else more creative, than we can think about now, will takeover. And so the cyle begins again.

  5. Peter Ricci May 9, 2011 at 11:10 am #

    Hi Andy and Nick

    You are not obliged to join any site – it is not a law. People go to where the traffic is.

    Nick, name all of the free sites to list cars, houses, jobs ands then tell me which ones actually work? They only work if they have the customers (traffic)

    I have tried so many free sites and the only ones that work are Craigslist and not so much in Australia

  6. Peter Ricci May 9, 2011 at 11:11 am #

    As for Facebook and Twitter, the idea is that everyone gets the current version, but paying customers (power users) get more.

  7. Andy Del Vecchio May 9, 2011 at 11:49 am #

    No Not law…that would be big brotheresque, like the telescreen,.

    …but it will be so good and fulfill your every desire Peter that you will never want to go anywhere else, you will become lazy and the real internet will be, to you, like a long lost dream, a dangerous landscape of subversive ideas and terrible activities. like the wilderness has become for the large majority of people in this world. Like Soma…( Brave New World) , a power version of facebook or your favourite newspaper will put you in a coma of satisfaction.

    As long as there remains competition on the web, and new Free ideas are allowed to develop (and they can only do this, I feel, by being free, at least at first, because they need content and users to be anything at all)

    Now you know I am playing devils advocate, don’t you….but isn’t that the beauty of freedom…

    still think its a great model

  8. Andy Del Vecchio May 9, 2011 at 12:37 pm #

    sorry getting abit heavy on the webphilosophy there /\ πŸ˜‰

  9. Mac May 9, 2011 at 3:24 pm #

    Look at http://www.MyCube.com. It’s a start-up competitor to Facebook. A big ask? Perhaps, but it is based on privacy and assisting content ownership and sales of content. Unlike Facebook that is based upon the owners accessing and using your private details (perhaps not surprising given how the ‘owner’ gained his ownership! *L*) and basic willy-nilly posting of all information everywhere basically. (Let’s face it. Facebook is a mess where US real estate agents are gaining leads using the shotgun approach of a poofteenth percentage of a large number gives you a large number!!!)

    Ps ww.Gumtree.com.au has worked very well for me in private sales (like a better looking Craigslist and owned by Fairfax! – competing against their revenue streams!!)

  10. Peter Ricci May 9, 2011 at 10:30 pm #

    Andy

    When it comes to advertising my couch, a job, selling my car, my house I turn to what works, if SMH, or the Age worked, I would turn there.

    If Gumtree worked (and for me I didn’t get one enquiry on an XBOX in 6 months) I would turn there.

    Where do we go for social networking Twitter and Facebook, we dont go to their rivals (which there are plenty) because they dont work anywhere near as well.

    MAC, MyCube might be awesome, but where are my friends? Am I going to convince them to join as well and will they have to convince all of their friends?

    If it is amazing and gathers steam then maybe, but early on, no. This is the problem all of these sites face, they need the power of Google or the like to compete.

  11. andy May 10, 2011 at 8:08 am #

    Hey Peter

    Ok, I fully understand the business side. and its great. I guess its the social side that concerns me.

    Having one stop shop for your life on the web, where you source all your information and do all your transactions and mix with only the people that are like minded etc could limit the scope for development of people over time.

    http://www.ted.com/talks/eli_pariser_beware_online_filter_bubbles.html

    give me a Multiple search engines and Multiple News sources, i might keep my friends socially somewhere and i will advertise my stuff with specialists who are good at what they do in that area.

    I just get scared people will get lazy and listen to what they get told and buy only what is in front of their face and it will cost a lot to put it there.

    or maybe we bring in the IWallet…

  12. Vic May 10, 2011 at 3:08 pm #

    I see Andy’s point and the video just goes to show that even the best minds in the business are grappling with the potential brainwashing and or compartmentalising that goes on with the internet.

    From a social conscience point of view there are far too many people looking to justify their narrow view of the world by selecting or having selected for them that which only reinforces their view. Therefore, unfortunately, the internet in enabling this reinforcement has had a tendency to polarize communities more so than it has ever done in the past.
    In the early days of internet it was the “great white hope” of communications that got us all excited the choices of information to broaden our perspective and enrich our education: Never really gave it much thought until I viewed the video but it is frightening to hear of the controls and manipulations that can now be achieved by site controllers.

  13. Peter Ricci May 10, 2011 at 9:41 pm #

    Gosh, you guys are right into the cryptic messages πŸ™‚ We always have choices, if I want to sell me property through a lesser known portal, or a lesser known classifieds website, I can do this, I take the risk all on my own, if it does not work.

    The article was about what I think portals should do, we always have choices. Portals such as SMH are always disconnected from their audience because consumers have to go and register on all different sites to do different tasks.

    If they all have unified systems, logins etc, then they all have the ability to connect better with their audiences.

    I will always attempt to sell my goods or services through the sites that are going to give me the greatest chance of success.

    I will not do it if the site is tricky, confusing or overpriced. This is why eBay is such a dud these days (in my opinion) because it continually tries to take money from your pockets. It still may work to an extent, but its growth has stalled and the reason I think is because that model is history.

    Having a unified system and one annual fee allows us to budget and makes it a simpler process.

  14. Vic May 11, 2011 at 8:39 am #

    Nothing Cryptic at all Peter. Off track from your article slightly but still relevant to the big picture you are trying to create.

    The only way something that is not free can take off is by doing the big and I mean, big spend, in advertising/promotion of the site. Who has the cash to do this? Are you expecting Face book or twitter set up the $100 subscription fee or should it be a completely new, from scratch venture?

    It is timely in respect to this article that Microsoft is wanting to buy Skype. Microsoft is cashed up and stagnant whilst Skype is running at a loss and growing. The big player taking control and the users having no say in it.

    If the few big world cashed up players were to all to mop up the original creatives such as face book and twitter, we will be exactly where we were before the FREE internet came along.

    Sure intelligent beings like yourself and me {: )} can make choices but when controls are taken by the few, the choices will be limited. Enough of the cryptics from me πŸ™‚

    Let’s see what Microsoft does with their purchase.

  15. Peter Ricci May 11, 2011 at 8:46 am #

    Vic, ok lets look at Facebook. Let’s assume you get everything you currently have on Facebook for FREE.

    Now add the ability to advertise jobs, classifieds, houses, cars etc etc.

    Add the ability to sell goods and services and send and receive payments for said goods and services.

    Also add the ability to store 100 Gigabytes of HD Videos, Photography etc for when you travel.

    All for an annual fee

    These are just some of the possibilities.

  16. Vic May 11, 2011 at 11:29 am #

    A little lost on how this face book will look like.

    Taking adverts first:

    Are you saying the ability to post the adverts etc on your own wall- or going to a subdomain or the like to self post your adverts etc? I like the idea of a self post to a separate domain. Is this what you mean?

    Then Storing stuff:

    I don’t store stuff so not much use to me- but for those that do could be good.

    How about a skype type chat system?

  17. MAC May 12, 2011 at 9:37 am #

    Peter, you say, “Now add the ability to advertise jobs, classifieds, houses, cars etc etc.” This is already possible but it is a mess as there are a multitude of mechanisms provided inside Facebook by a multitude of providers just like on the ‘normal’ ‘external’ Web. So, now we have mechanisms inside and outside Facebook! Good God! How many real estate portals do we need/want?!!! Wake-up sheep of the World! Ps Look at usage stats for Twitter and Facebook and you will see there are a lot of registrants but a helluva lot who aren’t using, certainly not regularly, but qualified vendors and buyers are searching everyday for real estate on Google, REA, and Domain! (Hey! Perhaps there’s a gig for me on the PR staff at one of them πŸ™‚

  18. Dennis May 24, 2011 at 6:16 pm #

    Facebook advertising for real estate is in my opinion less effective. Since users of Facebook enter this social network for purposes of socializing. Utilizing Google adwords, creating a real estate website and optimizing it, listing on craigslist and other real estate portals may seem more effective.

  19. Carbonite Australia June 19, 2011 at 6:51 am #

    I am glad I found your site. Very insightful. I personally would hate for one site to have it all and do it all perfectly. It would turn me away as a user.

    All of these social platforms have their strengths and they will work out what business model keeps them afloat over the next 5 years. Certainly user behaviour is changing and so will the way they do and look at their businesses.

    Yes FaceBook and Twitter have the followers but the regular users and the ROI for advertisers certainly has some way to go. Not enough case studies showing how it is any better than adwords.

    The real immediate challenge is for the newspapers and I agree that they are late but if you want some quality news it is where I head to. Challenge being however how do you change me to a paid subscriber not a free one when I have been for such a long time. This is not a challenge I would want. We have been spoilt.

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