How to fix social media and why it matters for investors

Fixing problems now clearly evident with global social media products is much easier than their parent companies make it out to be.

The playbook from tech corporations, including Facebook and Twitter, has been simple but effective: confuse the possible with the profitable.

The key to tech organisations protecting their profit engines has been to delay and obfuscate.

Firstly, they claim that they are only just learning about the issues, they need to and will do better and only they can fix them, usually through an internal artificial intelligence (AI) program newly designed to predict and avoid the troubles caused by their unregulated media.

This line of reasoning deftly positions the management and remedies to these issues as only possible in the realms of Big Tech. Reassuring platitudes of progress are intermittently doled out to mollify external criticism until the next crisis emerges on their platforms. At this point, it becomes evident that the AI purported to be the solution hasn’t been as effective as it was touted to be.

We should now see through this charade to recognise a never-ending game of whack-a-mole, because AI can only ever know what we program it to be. Its predictive qualities are perpetually over-stated, and this is coming from someone who wrote his first lines of code in 1983.

In order for state-of-the-art AI to be really great at human-oriented tasks, there are three simple questions we should ask about the problem it needs to solve:

1. Can you answer the question you want the AI to do in a second or less?
2. Would five of your colleagues give you the same answer to that question?
3. Do you have millions of examples of a correct answer to the types of questions your machine will need to learn from? Eg 'is this a traffic light?'

If you have answered yes, yes and yes, then AI is a possible solution. If there is even one ‘no’ to any of the above questions, then it’s best left to humans.

You can already see that the nuance of social media moderation is going to end up with many ‘no’ answers to these questions. It’s not nearly as simple as training a machine about road rules, flying planes or even recognising human faces.

A broken business model

Fixing all the issues we have with social media is both possible and simple. Unfortunately, for investors, it will make the firms less profitable.

Social media’s product is to sell attention. Attention itself is a scarce resource of which we have, at most, only 24 hours to give each day. In order to capture as much attention as possible, social media firms seek engagement. On the social web, enragement equals engagement.

We, humans, have a predilection to pay attention to events that trigger anger, fear and other negative sentiments more than we do to hope, love and joy.

It turns out that the human operating system, or Human O/S as I like to call it, is running a 200,000-year-old piece of software.

Deep down in our amygdala, we know that paying attention to fear keeps us alive – safe from threats. It’s our most important survival mechanism. While the world around us has changed dramatically in the past 200,000 years, what drives us to survive hasn’t changed much at all.

The net result is that mistruths, violent content, gamified financial scams, crime – you name it – all do a better job of reaching an audience than sane, civilised content does.

Social media has provided tools to weaponise and prioritise opinion over fact, erode trust in our public institutions and cause the wider public to descend into tribalism. Zuckerberg and Dorsey know this and still, they choose to ensure their secret algorithms leverage whatever maximises our attention.

So, we have a broken business model – one that isn’t broken for the owners, but broken for society. It needs to be fixed and it is an economic imperative.

What we need to remember, both as investors and beneficiaries of democratic civilisations, is that the destructive impact of unregulated social media can thwart the growth of emerging industries and investment opportunities. Examples are easy to find:

If lies about the climate emergency were not spread on social media, how further advanced might our renewable sector be?

What type of risk does the continued anti-vax movement fuelled on social media pose to our post-COVID economy?

More importantly, how do governments around the world respond to ill-informed pockets of our populace on issues that shape economic policy? The threat of misinformation to our future stability and prosperity is real, with far-reaching consequences for us all.

How to fix social media

There are many ways to fix social. Here are just three simple steps to ameliorate many of the current issues.

1. Know your customer: Users of social media should be forced to register with 100 points of ID before they are permitted to use any platform. Immediately, this thrusts upon users a new level of accountability and traceability. Doing this will go a long way towards removing bots pretending to be people.

Bots that are used to gamify social media, distort amplification of issues and force trending topics and mistruths. This is not anything Rupert Murdoch doesn’t already do – it’s just on a much larger and exponentially faster-growing scale. These same bots for which advertisers are currently over-charged to sell their products.

It’s astounding to think that we need to provide our identity to drive a car, buy securities, open a bank account, obtain a credit card, board a plane, operate machinery, purchase a mobile phone, use a SIM card in another country, even to ride on a train – and yet social media doesn’t face the same scrutiny, especially given it is the most powerful communications tool ever invented.

It’s time we added a KYC element to the digital world.

2. Regulate algorithms: It’s time we exposed the ingredients in the algorithms that shape our digital existence. We need this in the same way we have transparency in the ingredients of packaged food.

Algorithmic Nutrition Panels that clearly outline what we are seeing and why, plus the ability to turn them off in our feeds. It may well be that certain ingredients in the algorithms need to be outlawed altogether. It’s hard to know which algorithms might be causing the problems when they are still regarded as corporate secrets.

Nearly a century ago, the packaged foods industry used this playbook too, when secret ingredients included cocaine (in tooth drops), heroin (in cough medicine) and lithium (in 7 Up). In real terms, algorithms are editorial decisions. What we let social media feed our minds is surely just as important as what we put in our mouths.

3. Responsible for platform content: Social media is media. They cannot be compared to telecommunication companies, for instance, who are not responsible for the content of one-to-one conversations on their phone lines.

Social media content has a distribution element that clearly propels to the broadcast media category and they should be responsible for everything that is published on their platforms. It’s no wonder that traditional media categories can’t compete. If it means that all live video feeds on Facebook should be vetted by humans to avoid the issue of inadvertently live-streaming terrorism, then so be it.

Remember, if we know who their customers are, we can implement a rational policy that allows fair use and a system to protect both users and platform providers if abuse does occur. Of course, once we know who everyone is, behaviour on the platforms will be, by default, more moderate. Just compare LinkedIn to Reddit and the differences are stark.

Conclusion

So, there you have it – three simple ways that are not very profitable for social media businesses, but all very possible.

At present, social media is incredibly anti-social and we are still in its nascent phase. If we want to avoid the calamities we’ve seen in other countries facilitated via social media – then we should act.

There is little doubt about how it has been and can be a tool for emancipation, but we should never forget that the fabric of society is what we actually invest in for tomorrow, and tearing it apart won’t help anyone’s portfolio.