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Facebook’s Local News Problem

Facebook has been in the hot seat this year. The Cambridge Analytica scandal was such a debacle that it won Mark Zuckerberg a two day trip to testify before congress. Facebook’s admitted lack of oversight compromised millions of Americans’ data and spread fake news from big cities to the smallest of towns, and Uncle Sam still wants to know what happened. In the wake of this scandal, as Facebook tries to Humpty Dumpty their consumers’ trust, they’ve made a big to-do about their preemptive foray into local news and their new set of tools to support local publishers.

In February, Facebook created a Local News Accelerator. The program allots $3 million dollars for marketing to help newspapers get digital subscriptions. Publications from Boston, Dallas, San Francisco and other major news hubs will divide up Facebook’s ad dollars. The jury is still out on its success, as no reports from the companies in the accelerator have confirmed increased digital subscriptions. But there has been one study done that confirms a recent decrease in the reach of local news publishers on the Facebook platform.

The Takeaway:
  • Facebook is a groundbreaking tech company with a global vision, but local journalism requires microscopic detail, not just global vision.
  • Facebook is still not sure how to tackle the news space and with Pew Research deducting that 44% of U.S. adults get their news from Facebook, that’s not the best conundrum to be in.
  • The jury is still out on the success of Facebook’s News Accelerator, as no reports from the companies in the accelerator have confirmed increased digital subscriptions.

Which local publishers? Ironically, the very ones participating in the Local News Accelerator. In fact, only 2 of the 13 have seen a single digit percentage increase in reach on Facebook since their enrollment, while reach has actually decreased by double digits for 9 of those 13 participants. The Denver Post claims the unwanted crown with a staggering 56% decrease in reach since it entered the program. If Facebook is going to hurt more than it helps, then it needs to re-think its strategy. Communities need the localized information and journalistic accountability to connect them to their local ecosystem, and that connection is important.

Studies show that local newspaper closures are followed by rate hikes on the cities’ borrowing costs, sometimes as much as 11%. A pattern emerges where a few years after a local paper closure, people begin to take advantage of the lack of oversight, especially in revenue bonds. Revenue bonds are the instrument used to finance schools and hospitals, projects that generate ongoing revenue. This debt is then repaid to the city from the revenues generated by the project. Without hard-nosed, local journalists there to make sure no one dips their hand in the cookie jar and money starts to go missing.

Apart from an investment in local news, Facebook has also taken away their global trending feature and are testing ‘Breaking News’ features in the newsfeed and on the Watch platform. Nothing’s figured out and with Pew Research deducting that 44% of U.S. adults get their news from Facebook, that’s not the best conundrum to be in.

Facebook is right. They do have a responsibility to help local news. All the big tech companies do. Google’s ad revenue grew $86.3B from 2004 – 2016. Companies in that same time frame spent $31.5B less on print ads. Organizations like Facebook are great and most people use them everyday. They’re a groundbreaking tech company with a global vision, but local journalism requires microscopic detail, not just global vision. We’ll wait and see if that’s a problem Facebook is equipped to solve.

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