Facebook and the value of its symbolic data
by Mark Austen Whipple
To a historic degree, culture and socialization have come to drive economic activity. The use of symbols as data is central to this business environment. We are now well-acquainted with large-scale attempts to collect the symbolic data of culture and society — the business models of Google and Facebook have created whole new economic objects that have never before been priced. The question then is: Which symbols are valuable, and which aren’t? In particular, do Facebook and Google collect valuable symbolic data?
This question right now is not widely asked, and instead presumed, which can seem strange when you consider that Google has been publicly owned since 2004 and Facebook’s IPO is scheduled for this year. Are these companies’ assets really worth what they’ve been assigned? (Or in Facebook’s case, will be assigned later this year?)
On the face of it, and to their credit, Facebook and Google have developed highly efficient (and attractive) ways of collecting symbolic data. The question is, are the data valid? Or alternatively, do they trade validity to gain the efficiency? Another way of putting it is: do their loads and loads of data lead to valuable insights? The answers to these kinds of questions are still to come as the data are increasingly analyzed and conclusions in time become acceptably verified. Only then will the data be fully accountable in anything close to an objective fashion, and only then will we know the proper price to assign Facebook’s property.
My hypothesis is that Facebook’s data are valuable, but face at least one notable limitation. Facebook’s strength is that, by tallying clicks and likes and such and finding out who responds to you, they collect a lot of data. Furthermore, Facebook can help an economic or social actor locate his or her audience. The weakness of the data is that they don’t uncover ‘why’ someone likes you, or perhaps more important, why another someone didn’t like you, or why someone used to like you but really doesn’t anymore. While Facebook can help you get at these someones, you still need a more direct contact with them to be able to confidently say you know the culture and socialization of your audience members. In other words, you then need data collection instruments that Facebook doesn’t offer.
My best guess is that a lack of contextualized, qualitative knowledge on Facebook’s part is their weakness as an economic organization, as a data collection firm. Over time, companies/clients/their consumer base will need and demand more localized, contextualized insight.
It’s not a complete critique: Facebook brings value. It does so largely through efficiency gains; it is able to collect a lot of data. I get that. And, as they can pinpoint an audience like nothing before, they can help lead you to collect more local data. But that’s the point: local data are a clear avenue by which future companies could trump Facebook.