Taking Aim at Facebook: Start-up “Ello” Takes on Goliath

By Matt PerlOctober 6, 2014

The statement is quite clear: “Your social network is owned by advertisers.” Those seven words begin the manifesto of the social network garnering buzz not because of what their product offers—but rather what it doesn’t. Ello is the ad-free social networking brain-child of co-founder Paul Budnitz and even though Ello isn’t ready for its IPO yet, what they’ve created is a disruptive ripple in the Facebook pond. Their approach, as you will see, looks to drastically distinguish them from the folks in Menlo Park through a number of changes and as marketers, all of these have an impact on the way we currently (and will) do business.

One of the most notable claims Ello is pushing is evident in their initial manifesto: they will never sell data to advertisers. Clearly this effort is central to their identity and drastically contrasts the $7.8 billion in revenue Facebook brought in during 2013. The manifesto alludes to this reality: “Every post you share, every friend you make and every link you follow is tracked, recorded and converted into data. Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.” They’ve got a point there, right?

The fact that Ello will never be able to show advertisements and sell data isn’t really that newsworthy in the age of a startup trying to distinguish itself. What is significant is the fact that there is a marketplace for consumers who are tired of Facebook (and other social networks—looking at you, LinkedIN) using their personal information as a monetary tool. Entire blogs are dedicated to pointing out all the ways Facebook and other social media giants are watching us. This “Big Brother” attitude prompted Sucharita Mulpuru-Kodali, an analyst at Forrester Research to tell the Wall Street Journal that Facebook’s impact might be waning. "A few years ago, there was a frenzy, but the interest has peaked…There's the fear of, 'Oh my God, I'm going to click something and God knows what's going to show up on my Facebook wall.” The backlash against the all-knowing Facebook has certainly taken many shapes and forms—but one has to recognize that Ello itself is a direct result of this reality. Again, while Ello hasn’t made inroads yet with soccer moms and iPhone-toting grandparents, the reality is there is a marketplace for this product and the numbers are evident in the fact that Ello continues to double in size every 3-4 days, according to the company.

Additionally, Ello is trying to distinguish itself in other areas including a no-tolerance stance towards hate speech, a “liberal” policy towards NSFW-content and a visually simplistic approach. What does all of this actually mean for users? A completely different experience and a wait-and-see-if-your-friends-join approach.

With any startup in this space there is clearly going to be some pushback from both a functionality and a usability perspective. The folks at PC World have already pointed out that Ello isn’t available in a smartphone environment and “apps shouldn’t be an afterthought—they should launch with or before a website.” Its flaws could make it another MySpace, Diaspora or Google Plus—or it could just be a poor product and never catch on. Or it could spread like wildfire, displace Vine as the hot social upstart and be on the cover of Forbes in a few months.

Regardless of what lies ahead for this one company, the very concept that backs this entire social network is a singular idea that finishes their manifesto and runs contrary to many of the current options out there for marketers using social media to drive traffic generation: “You are not a product.” Now we have to wait and see if that translates to a generation of consumers used to being just that.

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