Social Media Must Move Beyond a Broken Ad Revenue Business Model
The legal actions against Meta serve as a stark reminder that the status quo is not set in stone.
DimaBerlin - stock.adobe.com
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Rarely a week goes by without reading about the harms of social media. From democratic decline and misinformation to children’s mental health issues and addiction, we are continually learning about the many ways in which the largest social media companies are harming people, communities and countries.
If we are to address these issues, we have to get to the root of the problem: the advertising revenue business model of social media companies that is fundamentally broken — and is breaking all of us.
Last month, more than 40 states filed lawsuits against Meta — the parent company of Facebook and Instagram — for harming young people and their mental health. The lawsuits also noted that Meta knowingly violated the Children’s Online Privacy Protection Act by collecting data on children without permission.
One line stands out from the complaint: “Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens. Its motive is profit…”. This goes to the heart of the problem.
Unfortunately, Meta is not alone. Major social media companies profit from harming our children.
Their reliance on the advertising revenue business model drives the decisions that lead to the terrible outcomes we see. The ad model requires users to spend time on social media platforms so that the platforms can deliver ads. They aggressively collect user data and insights that are a major selling point for advertisers.
To increase ad revenue and profit, they need users, including children, to spend more time on their platforms so they can serve even more ads. They promote content that gets users to stay on the platform longer — which often ends up being harmful content. These platforms then compete against each other in an arms race to see who can develop the most manipulative technologies designed to further engage and addict users, like the algorithms that feed us an endless stream of content. All of this creates a vicious cycle where user attention and data drive the outcomes and success of their business.
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With this business model, addiction is the core feature — not an unintended flaw.
For years, social media giants have thrived on this business model. They have turned user data into a commodity, monetizing every interaction, every piece of content, and every click.
We can use their platforms for free. But in return, we pay with an invasion of privacy and a youth teen mental health crisis. They have succeeded in creating a generation glued to their screens, regardless of the impact on mental health, communities and democracy.
The legal actions taken against Meta are a watershed moment in the ongoing battle to tackle the harms of social media and protect the privacy and data rights of users, particularly children. Just like how widespread lawsuits against pharmaceutical companies led to changes in how opioid medications were marketed, these lawsuits represent an opportunity to change and rein in social media’s ad business model.
It is possible to uphold the original promise of social media of connecting people authentically while not exploiting user engagement, violating user privacy and fueling addiction. Let’s look at a few things we should expect in the coming years on this issue:
• As litigation and bad PR result from targeting young people, expect tighter platform security protocols and expanded terms and conditions to be introduced to suggest that the problem is being addressed.
• Alternative revenue models (such as subscriptions) will be introduced to allow users to bypass ads.
• Family accounts that offer kid-friendly content segmentation (as Netflix offers) may be offered.
• Expect a Meta brand campaign to be launched that emphasizes how much they care about our families and our children. It will likely call out several changes they are making to address concerns possibly including the examples I offer above.
The legal actions against Meta serve as a stark reminder that the status quo is not set in stone. It’s time to demand a more ethical and privacy-respecting social media experience. Together, we can create a brighter future for the next generation, where they can enjoy the benefits of technology without sacrificing their privacy and well-being.
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