Watching the Facebook controversies, the blunt truth becomes obvious. Facebook makes money by manipulating people, their perceptions of reality and their emotions. In fairness, it's not alone in doing this. To some extent, the purpose of advertising since the days of traveling patent medicine salesmen has been the same. Facebook is simply another form of advertising, using a different hook as it were to keep people watching. Truth be damned.

The Internet itself does the same. Founded to facilitate the spread of information, the Internet also facilities the spread of unreality. Kids (and adults) lose themselves for hours or days in games that have no objective value.Some players have been known to play themselves to death, omitting eating and sleeping until the final sleep arrives. People disrespect others by gluing their eyes to their cell phone. It's all pretend and escapism that gets in the way of making life better. The Chinese government, in placing limits on time online, may really be focusing on quality of life rather than control of ideas (or perhaps both).

What the Internet does as well is to blur the line between truth and hucksterism. Ultimately, that destroys the value of Internet advertising. If we assume that almost everything on the Internet is fake, and probably half of what we see really is, how do we know what to trust? The logical thought is to discount everything. Don't bother reading and don't buy.

That's provided new life to some traditional advertising media, such as direct mail. Direct mail isn't cheap, particularly if it is well done, and the investment connotes a sense of legitimacy that isn't possible online.

Nerdwallet offers the following statistics on direct mail:

  • Direct mail spend—at $38.5 billion—accounts for the largest portion of US local advertising spend.
  • US advertisers spend an average of $167 per person on direct mail.
  • These US advertisers also earn an average $2,095 worth of goods sold through direct mail per person.
  • 70% of consumers say direct mail is more personal than online interactions.
  • 54% of consumers say they want direct mail from brands that interest them.
  • Direct mail open rates can reach up to 90%.

Online advertisers can't even dream of coming close to these figures. Instead, they have to recognize that online users have learned to ignore ads. If an online ad costs a penny per view, it's perhaps too expensive for what it's truly worth to the advertiser.

Is it time for the Internet bubble to burst?

And when Facebook management suddenly raises the threat of hyperinflation, which may or not be real, is that done to be informative or as a distraction or misdirection, to move public focus away from "the Facebook papers."?

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