There are concerns circling many aspects of Facebook’s platform – dubious political affiliations, a wilfully addictive user interface, and a confused stance on whether it’s really a publisher or not, to name a few.
Facebook still hasn’t worked out how best to use its hoard of data, and its change to the newsfeed in January shows that it is capable of getting things very wrong.
But over half of the world’s four billion internet users are Facebook users. That’s a significant amount of first-party data.
Brands will likely be reassessing the value of Facebook advertising, given its ageing user base, and these lackluster results. However, with its arsenal of Instagram and WhatsApp (which it hasn’t monetised yet), and developers doubtless working around the clock on improving the newsfeed algorithm, there are huge opportunities for growth.
Facebook is hedging its bets in so many ways, through acquisitions of innovative businesses like Oculus VR. Mark Zuckerberg’s monster isn’t going anywhere anytime soon.
Fergus Hay, chief executive of creative agency Leagas Delaney, says NO.
As a media company, Facebook relies on the quality and quantity of its consumer base, and – for a young company – it has got an age problem.
The under-30s are far more concerned about the accessibility of their data and the value of their network. These results show that they are “voting with their thumbs”.
Brands can see that young consumers aren’t on Facebook, which hugely undermines a business model where 97 percent of revenue is through media sales. Facebook is seen as a monolithic rigid media company that has been leapfrogged by Tencent in China, which has a series of e-commerce enabled products and services delivered through one platform, WeChat.
Tencent is a product and service business built around consumer experience, not a media company. Crucially, Tencent’s model, therefore, isn’t reliant on selling space – it is able to sell valuable engagement.
No one would bet against Mark Zuckerberg, but Facebook needs to grow out of being a media business, or the hipster will become the dad on the dance floor.
Frontpage October 14, 2019