How to Get Ahead on Facebook Without Really Trying

Not long ago, I decided that it was time to finally get serious about my social-media presence. No, please don't titter. While my fellow journalists had been building large followings on Facebook, I'd kept my page locked down, limited to people that I at least sort of knew IRL. Frankly, it was a bit of self-preservation: more than once I've inadvertently informed the 13,000 followers of my public Twitter account that I'd be somewhere for a drink around 6:30 if they'd like to stop by.

But with more than a third of traffic to many media sites coming through social media, peers solemnly assured me that as long as I didn't have a public Facebook persona, I was not living up to my traffic potential.

Enter Facebook Pages, designed to be the outward face of a business or public figure. It's sort of a cross between a Web page and a Facebook account: you put up a cover image and a little information about yourself, and then post periodic updates—daily specials, tips for using your product, or just pictures of the staff acting silly. If users like your page, your updates will show up in their newsfeed, along with all the news from friends and family.

Facebook Pages have proven surprisingly popular with users, in part because users' liking the pages is a way of affiliating themselves with a person or brand they think is cool. And for businesses, the advantage is obvious. It might cost a few bucks in promotions to acquire a new follower—Hampton Inn offered a chance to win a free weekend getaway, while Pizza Hut gave away free P'Zones—but once followers are hooked, businesses can blitz them with messages at no extra cost. If those friends like the message, then their friends will see it, and so on, ad infinitum.

So I dug up a head shot and within minutes, I'd created my own Facebook Page. Whereupon Facebook immediately asked me if I wouldn't like to promote it. Not, of course, by genially informing a few close friends that I now had a public page; Facebook was inviting me to buy an ad.

This is the crux of the most recent (but certainly not the last) controversy over Facebook's advertising services, as the company seeks more and better ways to monetize its services. As the company's algorithms have made it harder for some page owners to reach their audience, many have cried foul, most recently New York Times tech writer Nick Bilton, who complained, "It seems as if Facebook is not only promoting my links on news feeds when I pay for them, but also possibly suppressing the ones I do not pay for." His lament is familiar: every round of complaints unleashes a complementary bout of commentator hand-wringing over the Internet middlemen who are controlling how we interact with the Internet. And yet, what did we expect? We wanted those middlemen to help us survive the onrushing torrents of information on the Web—to sort and search and serve it up in carefully customized chunks. Those of us in the content business wanted them to give us new ways to reach our audience. Did we really think that they were going to keep doing it all for free?

The latest controversy goes back to last fall, when Facebook made some substantial changes to its "EdgeRank" algorithm, the little virtual robot that assembles your newsfeed. Business content was suddenly a lot less likely to show up in a user's newsfeed unless they had "engaged" with the page—liking, sharing, or commenting on its content. Facebook said the change was a response to user complaints about corporate spam. But around the same time, the company also introduced a new product, the "Suggested Post," that allowed businesses to inject their content directly into a user's newsfeed—thus helping said user to "engage."

Critics went wild: if Facebook was so worried about protecting users from spam, they said, how come they were letting companies pay to target specific viewers? The critics had their suspicions. "Facebook's noisy, overvalued IPO means they need a better revenue model," wrote content-marketing guru Sonia Simone of the website Copyblogger. "Page owners are being strong-armed encouraged to pay to 'Promote' posts to get a wider reach to the audiences they built in the first place."

Simone argues, though, that the move was inevitable, part of a longstanding cycle of what she calls "digital sharecropping ... [the] practice of building your online business on someone else's (virtual) land." Businesses tried Digg, she points out; then Reddit links or a MySpace page; and now, of course, there's Facebook. The cycle usually ends the same way: the value of that hard-won audience melts away, either because users desert the network or because the network starts exerting more power over how businesses can interact with the people who follow them there.

It's possible, of course, that Facebook will go the way of MySpace, but at the moment, it is the best virtual real-estate value around. So I put some money down to find out if its advertising is so much more powerful than just building a page and waiting for the followers to find me.

As soon as I opened the ad manager, I could see why companies were willing—reluctantly, even angrily, perhaps, but nonetheless willing—to pay. Department-store mogul John Wanamaker once famously remarked that he knew half of his advertising budget was wasted, but unfortunately, not which half. You don't have that problem with Facebook. Want your ad to be seen only by recently engaged Renaissance Faire enthusiasts between the ages of 20 and 24 who might want to buy your size-4 Maid Marian–style wedding dress? Facebook can easily find all 460 of them—and no one else.

The abundance of information was actually rather daunting. What age group did I want to target? Surely 13-year-olds wouldn't be interested in my posts about personal finance and Walmart strikes, but what about 17-year-olds? And how about my occasional cooking columns? Should I add people who listed an interest in food? Or would I just alienate them with all that boring stuff about the economics of an aging workforce? Then more questions: Should I pay for clicks, or trust Facebook to maximize "engagement" with my page? Did I just want a sidebar ad, or should I also tack on "Sponsored Stories"?

In the end, I chose blindly. I selected some likely demographics—over 17, interested in politics or business, in the United States—and told Facebook to charge me up to $10 a day on making me famous. And much to my consternation, it worked pretty well.

Four days after I created my Facebook Page, I had accumulated 13 "likes." Then I began paying for promotion, and the "likes" began mounting—23 on the fifth day, 26 the next day, 40 the day after that. Within 11 days, I'd accumulated 201 Facebook followers, 75 of whom, according to Facebook, had come from ads and Sponsored Stories. But after seven days and $70, I stopped the ad. In the days that followed, the pace at which I was acquiring new followers once again slowed to a painful trickle: some days three, some days one, some days, alas, none.

I ran the ad again, for another week, just to test. Same upward leap in the number of followers, as well as what Facebook calls "reach": the number of users who are seeing and engaging with your content. Same abrupt stall-out when I stopped paying.

Both times, the majority of my new followers came, not from ads, but from Sponsored Stories—those items that show up in a reader's newsfeed notifying them that "John Doe and five more of your friends like Megan McArdle!" Over the seven days of my second advertising "campaign," I ran a lot more sidebar ads than Sponsored Stories—40,000 compared with 11,000—but my Sponsored Stories got four times as many clicks.

This is what Facebook ads are really selling: your friendships. Though sidebar ads can be better targeted on Facebook than on most websites, they still suffer from what marketers call "banner blindness": with so much going on, readers tend to simply tune out the advertising. Sponsored Stories, on the other hand, show up in exactly the thing you're paying attention to: your newsfeed. Moreover, they come with the imprimatur of your friends, which makes you more receptive to the idea of clicking. Analysis from multiple sources show that users are more likely to engage with Sponsored Stories—which feature your friends front and center, and the brands as an afterthought—than with ads, where the primary focus is the marketing content.

There's something a little uncomfortable about that fact. How many of the people who liked my Facebook Page knew that I'd paid for them to see when their friends liked my page? (Sorry, guys. I'll understand if you unlike me. But I'll also be really sad, so please, y'know, don't.) It's one thing for Facebook to show me an ad for a wedding photographer when I get engaged. It's another thing when Facebook pins a book I've linked to to the top of everyone's newsfeed for a week because Amazon has paid them to do so. Or doesn't show me the things that companies haven't paid for me to see.

Of course, it's not just Facebook whose algorithms are choosing what we see—nor the only company that is getting paid to change what we see. Google searches, which used to be a sort of democratic vote on the most useful links for a given search term, are now customized according to what Google thinks we'd like, based on the ever-growing amount of information it has about us—not "us" as a demographic, but each individual one of us. And they're also customized to the search terms—so if you search "LG dishwasher," what fills your screen is not search results but sponsored ads. Merchant sites like Amazon also customize your pages. And who's to stop them from "customizing" your feed with the highest-margin items?

Whatever you think about these developments, it's hard to escape the conclusion that this is the next generation of the Internet. Fifteen years ago, we Web users broke out of the sheltering confines of AOL and CompuServe, the My First Internet where you mostly got the content that the curators had decided to feed you. We wanted to be free from the unbearable nannying of the dial-up companies (not to mention the slow speeds and high charges). With the giddy power of the Web browser, we burst through the walls and stampeded into the wide-open spaces of the World Wide Web, where we could stake out our own little seastead in the vast ocean of information, reading and talking to anyone we liked.

But after a decade out in the open, we are moving back behind walls. More and more we're using gatekeepers like Google and Facebook to contain the chaos. Doing so serves their purposes—but it also serves ours. In a 2012 Pew Survey, 21 percent of Americans reported getting news from Twitter or Facebook in the last day, and the number is only increasing; the Atlantic Media Group recently reported that almost half its traffic comes from social media.

Complain as we might about privacy violations and the invisible hand and all that, the reason this is happening is because, in some sense, we want it to. We're the ones herding onto Facebook and Twitter to get our news rather than using older, more open technologies like RSS readers. We're the ones who have chosen to let their algorithms aggregate for us what, in the dizzying world of Internet content, we would otherwise have to uncover for ourselves. We're the ones who complain bitterly whenever anyone on the Internet tries to charge for anything. But how did we think all those servers and Web developers would be paid?

Besides, the reason that companies are running the ads is that they work. "People say they don't like ads," says tech evangelist Rob Scoble. "Oh, really? You don't watch the Super Bowl? You don't like catalogs?" When ads are contextual—when they're feeding us the right content at the right time—we like them very much. My friends have all complained about the torrent of wedding ads that pop up once you announce an engagement on Facebook. But they also click. The ads don't necessarily work for every product—GM famously announced that it was paring back its Facebook advertising last year, after concluding that no one goes to Facebook to buy a car. But for businesses with a select clientele, it's hard to beat Facebook's targeting ability. Who else can pinpoint the exact day you got engaged, moved to Wisconsin, or had a child?

The danger, of course, is that these companies will go too far. Information like media content is a classic example of what economists call a "two-sided market": you're buying the content, and the advertiser is buying your eyeballs. Bond ratings are a two-sided market, too, with banks paying and the rest of us using the ratings to buy their bonds. We all know how well that worked out in the financial crisis.

On the other hand, what's the alternative? Having the government intervene to set rules for how and when these companies can sculpt our content? That wouldn't alter the fact that hidden decisions are shaping what we see; it would just change the decision maker. We could turn the tracking off entirely, of course—go back to the old, dumb Web that doesn't know who you are. But judging from our own behavior, that doesn't seem to be what people actually want.

"If you can't tell what product they're selling," runs the old marketing saw, "then you're the one being sold." Perhaps it's time for an update: whenever you insist on getting something for free, someone else is getting what they paid for.