Last month, I suggested that investment managers revise their stance on Facebook in light of changes proposed by Mark Zuckerberg to reduce the platform’s negative impact on elections, partisan politics, and fake news. In short, the product team at Facebook will de-emphasize helping users find relevant content in favor of more meaningful social interactions.
Consider this Facebook’s attempt to put the “social” back into social media.
After laying out three recommendations for how investment managers should respond, one of the most common responses we received was, “well, how should we be thinking about Twitter?”
Frankly, Twitter is inherently more nefarious than other social media platforms because of the ease with which bad actors can create fake accounts to spew nonsense. It’s also been reported that famous people are buying fake followers to seem more relevant. Now raise your hand if you are surprised to find that 31% of President Trump’s followers are fake.
If you’re looking for actual fake news, Mr. President, start there.
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So I tend to believe that Twitter’s Q4 profit -- its first quarterly profit since going public -- is more of an anomaly than a harbinger. In addition to its ease of use for malicious intent, the format itself encourages sensationalism and clickbait. Jordan Teicher, editor-in-chief of Contently, a content sharing platform, recently said:
"Even though creators will keep manipulating algorithms and peddling clickbait, I think we’ve finally reached the threshold of fatigue. Companies that treat their audience with intelligence will gain a huge advantage when customers are ready to make a purchase.
This threshold of fatigue is likely to have an adverse effect on Twitter’s relevance. Conversely, it is likely to be a boon for content platforms such as Apple News, Flipboard, or Harvest Exchange, for that matter, because publishers are vetted by each of these respective platforms to ensure quality control.
As investors are increasingly conducting pre-buying research online, it will be imperative for investment managers to leverage platforms that align the incentives of both user and publisher. With Facebook seeking to emphasize social interactions, the aforementioned content platforms stand to benefit. Investment managers must recognize this in order to connect with investors in more meaningful ways.
Where does that leave Twitter? Ask one of the President’s followers...