SaaS or Software as a Service is a way of delivering centrally hosted applications over the Internet—as a service. SaaS applications are sometimes called web-based software, on-demand software, or hosted software.
Most SaaS business models rely on the idea of the software residing on a cloud infrastructure and users pay a monthly fee accessing and utilizing that software.
Businesses rely on the SaaS company to maintain the cost of hardware, upkeep, maintenance, security, and upgrades. Additionally, most SaaS only charge what is needed, allowing the business to pay on need. You can see how attractive this can be.
One of the more known SaaS is social media platforms. The social platform is provided to the users as a online service. While the service appears free, there is always a cost.
Facebook is a SaaS?
When we think of this type of business model, we wouldn’t think of Facebook being a SaaS. We don’t pay money toward Facebook, to use it as a service. It’s free right?
Well no.
The returns for Facebook are the provided content of the users, and selling of that content. Having one of the largest base of users provides incentives for other companies to purchase ads with Facebook. Additionally, Facebook has algorithms, allowing those companies to hone in on better prospects for their ads.
Some Facts on Facebook
- Worldwide, there are over 2.38 billion monthly active users (MAU) as of March 31, 2019.
- There are 1.15 billion mobile daily active users (Mobile DAU) for December 2016, an increase of 23 percent year-over-year.
- 1.56 billion people on average log onto Facebook daily and are considered daily active users (Facebook DAU) for March 2019. There are 1.74 billion mobile active users (Mobile Facebook MAU) for December 2016 which is an increase of 21% year-over-year.
- On average, the Like and Share Buttons are viewed across almost 10 million websites daily.
- In Europe, over 307 million people are on Facebook.
Age 25 to 34, at 29.7% of users, is the most common age demographic - Five new profiles are created every second.
- Facebook users are 76% female (out of 100% of all females) and 66% male (out of 100% of all males).
- Highest traffic occurs mid-week between 1 to 3 pm.
- On Thursdays and Fridays, engagement is 18% higher.
- Photo uploads total 300 million per day.
- Average time spent per Facebook visit is 20 minutes.
- Every 60 seconds on Facebook: 510,000 comments are posted, 293,000 statuses are updated, and 136,000 photos are uploaded.
50% of 18-24 year-olds go on Facebook when they wake up. - One in five page views in the United States occurs on Facebook.
- 42% of marketers report that Facebook is critical or important to their business. Source
When we understand the massive engaging audience Facebook provides, we have an insight how they make their money through ads.
Each time a user is on Facebook, their content, information, and activity are being catalogued, indexed, and used.
Mark Zuckerberg goes to Congress
Misuse of this data is what brought Zuckerberg in front of Congress. Technically, it all started with reports of 50 million users having their data harvested by a private firm, for the sole purpose of identifying the users personalites and influence their behavior during an election cycle.
This breach of security caught the eyes of Congress. They didn’t really care on data security. They could understood a little bit how the American public can be persuaded to keep them in power or push them from their positions.
However, if you watch any amount of time of the Congress hearings, it became painfully obvious Congress had no idea how Facebook works.
Zuckerberg isn’t the first Silicon Valley chief executive to sit before Congress.
Source
In 2013, Apple’s chief executive, Timothy D. Cook, addressed senators about his company’s tax practices. In 2011, Google’s chairman at the time, Eric Schmidt, spoke about the company’s search practices in front of the Senate Judiciary Committee. And in 1998, Bill Gates, who was Microsoft’s chief executive, defended his company against lawmakers’ assertions that he was building a monopoly — an argument he eventually lost in court.
What I find most interesting is Congress’s concern over how to persuade public opinion rather than Facebook becoming a monopoly. I wrote a small article on Lifelog (genesis of Facebook), discussing how much social media Facebook actually controls. Facebook uses it’s revenue to aggressively acquire other companies.
The Power of Persuasion
Since Facebook holds the captive audience, they can be influenced or persuaded to buy, vote, or think a certain way.
This pyschological warfare has been used for years. The difference today is a more captive audience. Note tactics we see being used everyday in persuasion.
- Reciprocation – the key is to provide information that is helpful and positive, because, as Cialdini puts it, “there is a natural human tendency to dislike a person who brings us unpleasant information, even when that person did not cause the bad news.
- Social Proof – we view a behavior as more correct to the degree that we see others enacting it. This is why in situations which are awkward or difficult, people tend to look across the room at others before behaving, in order to ensure their reaction is socially acceptable and/or “correct.” After all, no one wants to be the odd man out.
- Commitment and Consistency – the use of the commitment and consistency principle is to remind someone who is hesitant to side with you of decisions they’ve made in their past. By highlighting how your request is similar, you indicate that the decision they are currently facing should be consistent with one they’ve made in the past. Similarly, be careful of these techniques being used on you, and feel free to quote the economist John Maynard Keynes: “When the facts change, I change my mind. What do you do, sir?”
- Liking – Receiving compliments and finding similarities between ourselves and another also helps us be persuaded when we otherwise might not be.
- Authority – It saves us time to put our trust in an authority; it’s cognitively resourceful and also helps shift the blame if the products we purchase don’t turn out to be as wonderful as we’d been led to believe by the authority.
- Scarcity – The principle here is creating the impression that we are losing something: “The idea of potential loss plays a large role in human decision making. In fact, people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value.” Source
After Thoughts
At the end of the day, nothing is free. There is always a transaction occurring between two entities.
