#110 - 30th July 2024 - A theory...

Imagine you run an imaginary social media firm that wants to optimize two things:

a) revenue

b) consumer happiness, assuming that it maximizes screen-time which in turn maximizes revenue long-term

The scarce resource is the consumers' screen time - for obvious reasons, due to a broken DeLorean.

Imagine further that due to your platform's popularity, you have got very fitting content for your users in abundance. You live in an age in which "influencer" is the #1 job wish that teenagers have.

With that, your supply is not scarce at all - in fact, suppliers fight for the best spot on the market place so that consumers see them with their limited screen time.

In such a scenario, how will you treat your suppliers that do not pay for better placement on the marketplace? Those that think, by simply standing in the corner, enough consumers will eventually pass by to let them grow big enough and finally get a place with the big boys in the front rows of the marketplace.

Will you let them get that place? Or will paying suppliers with equally good or perhaps even a little worse content get the slot?

What are your incentives in this scenario? How do you nudge all parties to maximize your goals a) and b)?

My theory is Instagram (and others...) give non-paying channels exactly as much reach and views as Instagram believes they should have to not loose faith and motivation. They want to have them on the platform, because if nudged just right, they will eventually buy an ad. But they will never let them grow nor reach their target audience.

Yeah, I know, big reveal. Organic is dead.