Why Should an Entrepreneur Watch Out for Digital Sharecropping?

Why Should an Entrepreneur Watch Out for Digital Sharecropping?

When I first heard the term digital sharecropping, I did not immediately understand its meaning, but the sentiment of the headline had me believe it was something bad. Now I have researched it, and I know it could potentially be something bad, but not necessarily. In this blog, I will explain what digital sharecropping is, what its dangerous implications could be and how you can avoid them. After this blog, I hope that you can check whether your online marketing strategy is the right one for your business.

‘Why Should an Entrepreneur Watch Out for Digital Sharecropping?’ In this blog, I explain what digital sharecropping is, what its dangerous implications could be and how you can avoid them. After this blog, you can check whether your online marketing strategy is the right one for your business. Read the blog at https://budgetvertalingonline.nl/business/digital-sharecropping/

What is digital sharecropping?

KVNW describes digital sharecropping very concisely, so it is good to start out with this definition: “Digital sharecropping occurs when you build your online presence on a platform you do not own (i.e. Facebook, Google+, Medium, Tumblr, etc.). The content essentially belongs to the platform, not you.”

Digital sharecropping is a term first coined by Nicholas Carr in December 2016, when MySpace and Facebook were the two major social networks, in order to describe a peculiar phenomenon of Web 2.0.

“One of the fundamental economic characteristics of Web 2.0 is the distribution of production into the hands of the many and the concentration of the economic rewards into the hands of the few. It is a sharecropping system, but the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money, and, besides, the economic value of each of their individual contributions is trivial. It is only by aggregating those contributions on a massive scale – on a web scale – that the business becomes lucrative. To put it a different way, the sharecroppers operate happily in an attention economy while their overseers operate happily in a cash economy. In this view, the attention economy does not operate separately from the cash economy; it is simply a means of creating cheap inputs for the cash economy.”

Who reaps the profit?

In a Copyblogger blog, Sonia Simone elaborates on this: “In other words, anyone can create content on sites like Facebook, but that content effectively belongs to Facebook. The more content we create for free, the more valuable Facebook becomes. We do the work; they reap the profit.”

The term sharecropping refers to old farming practices: a big landholder allows individual farmers to work their land and takes most of the profits generated from the crops. As Simone explains: “The landlord has all the control. If he decides to get rid of you, you lose your livelihood. If he decides to raise his fees, you go a little hungrier. You do all the work and the landlord gets most of the profit, leaving you a pittance to eke out a living on.”

The economics of digital sharecropping

In May 2012, Carr revisits his blog. MySpace is no longer a major social network, but Facebook still is:

“With a reported 900 million active members, Facebook is, by far, the largest digital-sharecropping operation that the internet has yet produced. About one out of every eight people on the planet sharecrops for Facebook today – and their collective labor is expected to put a billion dollars of cash into CEO Mark Zuckerberg’s pocket when the company goes public in a few weeks.”

Two economies

Car says that Facebook’s most recent financial filing [at that time] provides a great illustration of the “two economies” that underpin digital sharecropping. According to Techcrunch, Facebook earned an average of $1.21 in revenue from each of its members during the first quarter of this year, which is what Facebook calls ARPU (average revenue per user); it is one of its crucial financial measures.  He says: “Because Facebook’s content is created by its members, ARPU also tells us the monetary value of each member’s labor. If the average Facebook sharecropper were to be paid a revenue share for his or her work on the site, that member would make a buck and change every three months – about enough for one crappy cup of coffee. Needless to say, the amount is so small that Facebook members never think about it. The amounts only become economically interesting when you aggregate them on a massive scale.”

Blurred lines

Carr goes further by saying: “I would argue, in fact, that while Facebook very much wants ARPU to grow steadily, it probably does not want the number to get so large that it becomes a meaningful amount to its members. If that happened, members might start thinking about the cash value of their labor rather than just its attention value. The line between the two economies would blur. By keeping ARPU modest (and focusing on scale), Facebook maintains the all-important divide between the attention economy (in which members see themselves as working) and the cash economy (in which the company reaps the monetary value of the members’ work). The last thing a for-profit social network wants is for its members to start seeing themselves as laborers.”

Dependent on the digital landlord

I think Simone uses a great parallel story to explain the dangers of digital sharecropping: “We have a great bookstore in my town — the kind of place you picture in your mind when you think of a great independent bookshop. They do everything right, and they have always had plenty of customers. Nevertheless, they still closed their doors last year.

Not for the reasons you might think. It was not Amazon that killed them, or the proliferation of free content on the web, or the crappy economy. They closed the store because they were leasing their big, comfortable building… and when that lease ran out, their landlord tripled the rent. Literally, overnight, their business model quit working. Revenues simply would not exceed costs. A decision made by another party, one they had no control over, took a wonderful business and destroyed it. That is precisely what you risk every day you make your business completely dependent on another company.”

Putting your brand or business’s livelihood into their hands

Jared Williams agrees: “I do not really care if Facebook gets rich, but what I do care about is putting your brand or business’s livelihood into their hands. Think about it. You invest a good amount of your time and resources into building up your “likes”, or “followers”. I have talked to many business owners who say that this is their only means of communicating with customers (by communicating they mean constant-hard-selling).

Some have even asked, “Why do I need a website when I have Facebook?” Well, you are helping Facebook and Twitter drive people back to Facebook and Twitter. You are not collecting valuable data on your customers (you may not even know who they are), and they are certainly are not going to your site. I wonder how many actually visit your page or see your statuses. By building your business on rented land, your business becomes vulnerable and at any point, these social networks can pull the plug.”

4 reasons why digital sharecropping can be dangerous for your company

  • You have no rights over the content you share as you do not own it.
  • There is no guarantee you can have your page or profile as long as you want.
    As Williams says, these social network sites can “shut you down for whatever reason. There are no “Facebook Rights” that guarantee that you can have a Business Page. One incident or breach of their Terms of Service and you are deleted!”
  • The terms of the social networks and platforms change quickly.
    As Simone says: “What happens when Facebook changes the way you are allowed to talk with your customers? Facebook is a particularly fast-changing platform, but it is not the only one. An entire industry has sprung up based on trying to figure out what Google is going to do tomorrow, both as a search engine and as an advertising platform.”
  • The landlord (the site on which you sharecrop) may or may not be here next year.
    Simone explains: “sharecroppers have put millions of hours into sites like Digg or MySpace. Those sites still exist — but they are no longer bringing the traffic they once did. Sharecropped land, in other words, has a tendency to become less and less fertile over time.”

How to avoid the dangers of digital sharecropping

According to Simone, there are three assets that you should be building today and that you should continue to focus on for the lifetime of your digital business:

  • A well-designed website with your own hosting
  • An opt-in email list, ideally with a high-quality autoresponder
  • A reputation for providing impeccable value

Developing these assets is the equivalent of buying your building instead of renting it. Any of these can still fall prey to outside influences. Yes, your site can be hacked, your email account can be closed down, and your reputation can be smeared. Nevertheless, repairing your assets is in your control.

List

Taewoo of FreshSuperCool has made a list he thinks is best.

  • Yes, be social but focus on what matters, your website.
    Your website is the only asset that you have full control over. Remember social media will come and go, so never forget to invest into your own website.
  • Do not buy fans.
    That is ridiculous. If you are going to spend any money, use the ads to promote your message that drives traffic back to your website.
  • Do not try to game the system.
    You will lose.
  • Focus on metrics for your website.
    Do not improve Facebook. Do not improve Twitter. Stop giving them content and your brains. Use it analyze your stuff.
  • Write quality content.
    If the Internet is the information highway, your website is like the little store on the highway. Not everyone is going to stop there, but some will. If you show them crap, do you think they will give you business? No.

Sequence

William Comcowich sees this differently: “a true multichannel approach treats content syndication and social media networks as more than outposts. Today’s most effective content marketing strategy melds the corporate blog with digital syndication of original content.  Here is the sequence:

  • Publish engaging content on the corporate blog.
  • Promote the owned content on appropriate social media networks.
  • Revise the corporate blog content and republish it in third-party websites and social networks. Publication on multiple sites is acceptable, but it is wise to check out each site’s terms.
  • Promote the republished content in social networks (Twitter, Facebook, and LinkedIn Groups).

Many digital publications require an exclusive period for their published content. After that period, most of them allow authors to publish the piece elsewhere including the corporate blog. That enables what might be viewed as an upside-down content marketing strategy: publish first on well-targeted digital publishers or and then publish on the corporate blog. However, be sure to conform to the republishing policies of the publisher where the piece originally appeared.

Carefully watching the changing landscape for digital publishing will help marketers optimize results from content marketing.”

Questions to ask before you share your content

Jeff Atwood says that if you spend much time creating content on someone else’s website, you should be asking yourself some tough questions:

  • What do you get out of the time and effort you have invested in this website? Personally? Professionally? Tangibly? Intangibly?
  • Is your content attributed to you, or is it part of a communal pool?
  • What rights do you have for the content you have contributed?
  • Can your contributions be revoked, deleted, or permanently taken offline without your consent?
  • Can you download or archive your contributions?
  • Are you comfortable with the business model and goals of the website you are contributing to, and thus directly furthering?

“There should always be a healthy, reciprocal relationship between you and any websites you are contributing to. Ultimately, you have to decide which is more important — building your own brand, or building the brand of the website to which you are contributing? While these two concepts are not necessarily opposed, I strongly urge everyone reading this to err on the side of building your own brand whenever possible. Websites tend to come and go; the only sensible long-term strategy is to invest in something that is guaranteed to be around for the rest of your life: you.”

Do you need social networks?

Yes! Social networks are great! Those places are for sharing content that ultimately gets customers back to your site or into your store. Participate in discussions on social networks and share content. They are great marketing tools to add to your mix. Just do not build your business on there so much that you rely on them. Digital sharecropping can be devastating: why rebuild when you can just keep building? Think about the amount of time you spend growing your “likes”. Now think about how much great content you could create using that time.

What can I do for you regarding digital sharecropping?

Not much more than warn you, as I have done here. I can help you with your content though.

You have researched exactly who your customers are and you know how you can best reach them. Consequently, you have written high-quality content for them. Language is one of the techniques that marketing uses to make an impression on customers. It is, therefore, likely you will need your content in more than one language. I am the owner of translation agency BudgetVertalingOnline, which offers affordable translations into English or Dutch. Would you like to get in touch? Send me an email (info@budgetvertalingonline.nl), send me a Tweet (@GdenHolder) or fill out the quotation form.

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