So these platforms provide free access to the feed, and the reason behind that is because they don’t make money off of you using it. They make money off of the data that they collect from you using the platform. So here’s what’s really interesting if you look at this model. First off, the platforms provide you free access, then what they’re doing in exchange for that is they’re keeping you engaged and on this platforms as long as possible. They want as much data and information as possible, because they use that data and information to then have it be sold in advertising for businesses to purchase ad space on their platform. So this is where the profit comes in.
Businesses will then say, okay, i want to run ads on Instagram, on Facebook, on TikTok and whatever it is. And so the platforms say, okay, great, pay for ad space and we’ll put your ad in front of the specific audiences that you’re saying you want. Now how do ads work and how do you get in front of the people that you want to get in front of? based off of the way that you’re curating the pieces of content they like, their behavior, patterns, where they live, geographically, then the platform will push those pieces of content the sponsored and our paid pieces of content in front of the folks who resonate or are most similar to the qualities in which the business thing that they’re looking for. Now, it would not work if the Businesses do not have a return. Otherwise, there wouldn’t be any real benefit for it. So a big part of why these platforms want to keep us on and keep us engaged is they want to make sure that they have the most accurate data so that businesses who are on the platforms and trying to sell to the users, who are you and I, are actually making sales, that conversions are happening, and so it’s important for these platforms to have relevant data, to have real information that is actually profitable and does convert, and the reason behind that is the more that it converts, the more incentivized businesses are to spend more money on the platforms putting ads in front of users. So one thing that I really want to clarify here is that advertising is not necessarily a bad thing, and there tends to be a stigma around paid ads versus organic marketing and all of the pieces, and I don’t think that there’s a right or wrong or a hard line in this. I think it’s very nuanced conversation And I want to address that, because if you are a business owner and you’re trying to use the platform to reach certain audiences or to share a really important or powerful or potent message, or to provide education or information that’s not as easily accessible, and you’re only relying on organic components, the biggest thing that we have to realize is we’re competing with an algorithm that’s prioritizing two things One, prioritizing the people who are paying it.
Those are its top priority because those are the people that are paying the bills And if you look at the graph that I posted on my Instagram earlier this week or last week, one of the things that was highlighted on there is that the advertising component of Facebook specifically made up for 97% of the total revenue for 2021. We’re talking billions of dollars in revenue, which is 97% of everything that Facebook made came from advertising, from folks purchasing ads on the platform. So it is a huge, huge, huge component of how all these platforms generate their revenue And it’s incredibly important for them to maintain good relationships and good standing with the folks who are actually using the paid ads, and so the incentive there is. Obviously they’re going to be prioritizing, and the algorithms are going to be prioritizing, sponsored ads over organic content, because those are the people that are paying into them and they want, obviously, for those people to continue to invest. So they want to continue to push that content first.
Now the second piece of content that we’re looking at, that the algorithm is going to push is not necessarily the content that’s most engaging, are profound, are helpful in any type of way, or even the most quality. They’re going to push the content that is purely keeping people on the longest. And what kind of content is that? It’s going to be the content that is entertaining, that’s really funny, that’s comical, that’s really polarizing, that’s really entertaining. The content that tends to be really emotionally charged, whether that’s emotions of joy, excitement, ease, or emotions of tension and worry and fear. But you’ll notice that there always tends to be a high stimulus behind the content that is pushing your feed. Now, depending on how you engage with the content, we’ll determine and dictate what other content is put onto your feed that the algorithm is choosing is most likely to keep you on longer.
So we have to remember the way in which these platforms are designed and the way in which these platforms are intended to be used by the creators, and the purpose behind them is to keep users on as long as possible, and so one of the things that they’ve done more recently in the last few years is put out paid creator opportunities. They are now paying content creators to push more content on their platforms in exchange for money. They’ll reward you, they’ll give you bonuses, and part of that is really interesting, because the strategy is hey, you produce a lot of content. The more content you produce, the more views and engagement you get, the more we’ll pay you. But what we’re not recognizing about this, which is really really interesting, is that that is solely really for the benefit of the platform, because the longer that they keep you on, the more data that they have And the more they can say, ok, this is what’s working, this is what isn’t, this is who we want to target, this is how we want to target them, and so the entire platform is really just a giant business.
And the funny thing about this, in my humble opinion, is that you, the user, or me, the user, is not only the asset that is being sold our data and information is what’s being sold and leveraged but we’re also the person being sold to, we’re the consumer. So it’s this really interesting conversation of OK, great, let me take the information about how you use this, let me study you, let me see how you show up on here, and then now let me use that information on you and sell content to you based on your behavior, patterns and how you show up and how you engage and how you interact, and what kind of content you create and what kind of content you produce. Now, this can be somewhat disheartening, but it can also be incredibly, incredibly empowering when we realize that there is an opportunity inside of us. If you start to look at advertising and things like Facebook ads, instagram ads, tiktok ads, et cetera, and you start to reconcile with a piece that, ok, these pieces of content do get more engagement, they do get a higher viewership, they do get more reach. Now, not everyone is in a place where they want to be investing in ads, and nor am I saying that you absolutely should or need to, but what I am saying in this conversation is that there is a piece of this where it can actually be helpful when used in the right hands, when used with the right intention, and I think the part that can feel a little frustrating or a little counterintuitive is, a lot of the times, the advertising that we see is necessarily coming from the folks who really care about their work and are doing the best that they can and doing really powerful things in the world. That’s the people who have the most money to spend on advertising because they have a higher budget to explore, to get the information right.
Ads is not a first, what is the word I’m looking for here? Surefire way to make money. And we’ve learned this lesson And I say we when I refer to myself and my business partner. We have learned this lesson time and time again over the years. We’ve been in business, since 2017, 2018. And we’ve invested upwards of $20,000, $30,000 in advertising and advertising agencies, and one of the biggest lessons that we’ve learned is it’s never a guarantee. It’s never, never, never a guarantee. And I think it’s important to know that, because one of the misconceptions, especially for novice business owners, is this idea that you just pay for ads and then you automatically have an ROI, and that’s just not the reality of it. You have to reconcile with the fact that like, ok, yes, this is a way to boost my content and to get more engagement, and there’s a lot of data and information and study that goes behind it. And so I think, when we’re starting to have a conversation about ads and I’m not going to be teaching about that on this podcast, but I want to cover the prefaces of it is that how can you actually use the way that the platform is built and the way that it’s designed to your benefit? How can you take the tools that it’s providing and use them to better support your business than your message.
And one of the things that I think is really important is that we’re not just relying solely on social media, that we’re not just relying solely on posting on Instagram and Facebook to our TikTok to make all of our money. And that’s where our entire audience and business lives, because it can be a really really risky thing to do when it’s really easy for these platforms to shut down your account to say, oh, you know, so-and-so reported you or you have a fake account or there’s somebody else impersonating you and they’re taking all of your content. I’ve seen this happen to so many colleagues and peers and even mentors or folks that I’ve invested in, And it’s really really frustrating and emotionally exhausting. So it’s important to recognize that the end goal of social media is not to stay on social media and be posting forever.
One of the things that my business partner and I talk about a lot is we want to make social media optional and not a mandatory thing that you have to do to grow and scale and run your business online. You wanna be able to use it if you want to, but not have to use it to maintain a certain revenue or growth in your business. So how do you do that? Part of that process is you’re utilizing social media to maintain a presence, but the main goal is not actually to stay on social media to bring people off of the platform and into, ideally, your email list or other spaces like YouTube content or a podcast content where you can have them listening to you off of social media. The ultimate goal really is to have a high quality email list of contacts that you can consistently engage with, regardless of the algorithm, because email is very different than social media.
You’re not competing with all of the content that’s viral, that’s trendy, that’s hot in the moment, that’s emotionally polarizing or that’s really funny and having to figure out how to fit into that. Instead, you’re speaking directly to people that have opted in and given consent to say, hey, i actually want you to land directly in my inbox, so you’re going straight to them. Versus when you’re on social media, you’re competing, trying to interrupt and disrupt their scroll to get in front of them, while also competing with all of the other hundreds of thousands of millions of creators who are trying to do the same thing. So we want to look at them and say, okay, great, social media isn’t my end goal, but it’s the step in the strategy in the right direction, and we want to understand the attention merchant business model, because part of the platform is to get attention. It’s to compete for attention in a way. So if we’re going to be doing that, let’s do that in a way that’s both ethical, equitable and intentionally designed to not have to always rely on that strategy, but instead slowly begin transitioning to having folks in other spaces and other places where we can reach them on a more consistent basis and have a much higher capacity to grow the business that isn’t 100% reliant on social media.
Now, the other thing that I’ll mention briefly and we’ll go over this in more depth on future episodes is the conversation of SEO, marketing and how that varies from social media. So I’m not going to get too in depth on this right now, but the biggest thing that I want to hit on with the attention merchant business model, like Facebook, like TikTok, like Instagram, when we’re talking about social media, is these platforms are 100% reliant on you creating content that is interrupting and disrupting somebody’s scroll and getting their attention and has them stop and pay attention to you. Now the folks that are on these platforms are not intentionally looking for information. They’re on here trying to distract themselves, procrastinate, find something to just feel in the moment. There’s not an intentional component to it. It’s just a passive practice or a passive act or a passive thing that they’re doing, whereas when we’re talking about SEO and we always get the conversation of like, oh, this sounds really big or overwhelming, but really it’s a simple way of saying you’re creating content that is high quality and that is relevant to what you know your folks are searching for.
So search engine optimization, seo means that your content is optimized for what the search is. So if somebody is searching for how to find high protein vegan recipes, you can make another 15 minutes and you create content that perfectly matches what that person is searching for and they land on that piece of content. That is what SEO is, and obviously there’s a lot more that we can get into depth in this. Not going to do that on this episode because we don’t have a whole lot of time, but what I do want to say is when we’re talking about conversations of SEO and starting to slowly, because SEO is not a fast path. It’s not going to be this overnight success where you just have a video, go viral and TikTok and that’s it.
It’s something you do in tandem as you transition is you’re building and compounding interest over time with assets like blogs, our YouTube videos, our Pinterest posts, that are utilizing search engine platforms like Google, like YouTube, like Pinterest, that focus on users who are coming to the platform with a specific intent of finding information, finding answers, and your content, if you’ve answered that question, is what will be pushed in front of them.
So, instead of you trying to compete on a platform for attention, instead you’re creating high value content that’s perfectly answering the questions of the people who are actually searching for that information, thus creating a beautiful match point, which is where SEO becomes this incredible space for you to grow your business without having to rely so much on the need to keep up with trends and the need to always be posting or commenting or creating content. So that is it for today’s episode. I hope that this is starting to provide a little bit more insight on what the attention merchant to business model is, how it works and some of the benefits of starting to transition off of that. Obviously, if you want to learn more, make sure that you subscribe. We’ll be sharing a lot more in future episodes and I cannot wait to see you there. All right, y’all, i’ll see you in the next episode.
Listen in as I unpack the attention merchant business model and its connection to social media platforms like Facebook, TikTok, and Instagram. I explain how these platforms provide free access to their platform with an intentionally curated, endless scroll, and use the data collected to sell advertising space to businesses. I also discuss how there is often a stigma around paid ads, and explain why it is important for businesses to have a return when investing in ads on these platforms. Finally, I emphasize that advertising does not have to be a negative thing, and discuss how it can be used to share important messages or provide education.
Join me as I explore how to use social media to support your business, the tools the platform provides to better support your message, and the importance of not relying solely on social media. We also discuss transitioning people off of the platform and onto your email list or other forms of content. Additionally, I touch on the attention merchant business model and the importance of creating content that interrupts and disrupts someone’s scroll in order to grab their attention. Don’t miss this insightful discussion on maximizing business growth beyond social media.
The revenue model of social media platforms
Social media platforms provide free access to users, but they make money from the data they collect from users’ activities on the platform, which they use to sell advertising space to businesses. The longer the platforms keep users engaged, the more data they collect, and the more businesses are willing to pay for advertising space.
Advertising is not necessarily bad, but organic marketing is competing with an algorithm that prioritizes paid advertising and content that keeps users on the platform the longest, such as entertaining, emotionally charged, or polarizing content. The more the content keeps people engaged, the more data the platforms can collect and use to sell to advertisers. It’s important to recognize that the platform is primarily a giant business that leverages user data to generate revenue.
Here’s an infographic I posted on my Instagram of how the platforms we leverage for our own personal gain work:https://www.instagram.com/p/Cou2R8brVgi/embed/?cr=1&v=14&wp=540&rd=https%3A%2F%2Fsophiekessner.com&rp=%2Fep-2-unpacking-the-attention-merchant-business-model%2F#%7B%22ci%22%3A0%2C%22os%22%3A2111.2000000029802%2C%22ls%22%3A1587.5999999940395%2C%22le%22%3A2019.7000000029802%7D
It shows that social media platforms like Facebook and Instagram are designed to keep you scrolling for as long as possible. They collect data on how you engage with their platforms and use that information to create profiles of you as a user. This data is then sold to businesses that want to put paid ads in front of you.
In fact, in 2021, Facebook generated over $114.9 billion USD in revenue from ads alone. The algorithm pushes different ads to users based on their behavior patterns, even if they don’t purchase anything, which benefits Facebook by collecting even more data. To boost user engagement, these platforms incentivize creators to produce more free content to keep users on their platforms for longer periods of time. They even introduced “creator payments” for users who push high volumes of content that keep users engaged, leading to the trap of faux influencers.
So the next time you find yourself scrolling endlessly on social media, remember that your data is being collected and sold to businesses.
Building a business strategy that isn’t solely dependent on social media
It’s crucial to understand these business models and develop a strategy for your business that is not solely dependent on social media. Business owners who rely on organic content are competing with an algorithm that prioritizes paid advertising. While it’s challenging to compete, it’s still possible to use social media to reach specific audiences and share potent messages.
Also, it’s essential to recognize that the user is the asset being sold, and their data is what’s being sold and leveraged. However, this can also be empowering, as users can take advantage of the opportunities within advertising and recognize the value of their data.
Using social media strategically as a starting point
Now, I’m not saying that you shouldn’t use these platforms or that you should be investing in ads, but it’s important to recognize that social media shouldn’t be the only place where you’re building your business. These platforms can be risky, and they can shut down your account at any time, which can be frustrating and emotionally exhausting.
That’s why you should be using social media to bring people off of the plat
form and into other spaces where you can engage with them more consistently, like email lists, YouTube, or podcast content.
The benefits of SEO for long-term growth
Another thing to consider is search engine optimization (SEO), which is the practice of creating content that’s optimized for what people are searching for on platforms like Google, YouTube, and Pinterest.
With SEO, you’re not competing for attention on a platform, but instead, you’re creating high-quality content that perfectly matches what people are searching for. This can be a great way to grow your business without having to rely so much on keeping up with trends or posting constantly.
So, when it comes to social media and building your business online, remember that the end goal isn’t to stay on social media forever. Instead, you want to use these platforms as a step in the right direction and focus on bringing people into other spaces where you can engage with them more consistently.
If you want to learn more about the attention merchant business model and how to transition away from it, make sure you subscribe to my podcast for future episodes.
MENTIONED IN THIS EPISODE:
Attention Merchant Business Model, Social Media Platforms, Facebook, TikTok, Instagram, Data Collection, Targeted Advertising, Paid Ads, Business Growth, Maximizing, Tools, Message, Email List, Disruptive Content, SEO, Questions, Potential Customers