A decade of Facebook: So what’s next?
Facebook turned 10 on Friday [4 February], giving us the opportunity to reminisce about the world’s leading social network, its remarkable achievements in just 10 years, and allow us to take a glimpse at what’s to come from the social media pioneer.
While 2014 is just another year for the social media giant to collect users, data, and revenues, it’s also a reminder of how quickly the tech world evolves.
Facebook has collected a billion-plus users, connecting people from every corner of the planet. Its global brand recognition may be the best in the tech world, rivalling only Google and Apple, both of which had a substantial head start.
As Facebook approached the ripe, old age of 10 (that’s 70 in tech years, right?), the company continues to face questions about its functionality in the social media industry it created. We’re not talking about Facebook disappearing — in fact, all indications point to another year of increased user metrics and revenue, in keeping with its years of steady growth.
Instead we’re talking about Facebook’s identity, which could be lost amid the new features and ad rollouts that have defined the company’s most recent years of growth.
Let’s get some perspective on their massive success …
Facebook accounted for 5.7% of all global digital ad revenues last year, up from 4.11% in 2012, according to eMarketer. Google, by comparison, accounted for 32.4% of all digital ad spending worldwide in 2013, up from 31.5% in 2012. Globally the digital ad market grew 13% to $117.6 billion in 2013, according to eMarketer, up from $104 billion in 2012.
Mobile advertising revenues soar
The company said it had 1.23 billion monthly active users, a 16% increase year-over-year but up just 3.4% compared with the third quarter of 2013, a sign that growth may be slowing. Monthly active mobile users totalled 945 million as of 31 December, an increase of 39% year-over-year and 8.1% higher than the third quarter. Revenue from advertising was $2.34 billion, a 76% increase from the same quarter 2012, and mobile advertising revenue represented approximately 53% of the total, up from approximately 23% in the fourth quarter of 2012.
Facebook accounts for more mobile minutes in the US than YouTube, Pandora, Yahoo, Twitter, Pinterest, Tumblr, AOL, Snapchat and LinkedIn — combined.
The company made a profit of $1.5 billion for the year
Facebook is worth around $135 billion and will probably become the fastest company in history to reach $150 billion. Its recent financial results have impressed Wall Street. Social networks are evolving at lightning speed and so are its users. Facebook has everything. It’s a search engine, a dating profile, a family photo album, an address book, and a newspaper, all rolled into one. For many longtime users, it’s also a neverending class reunion, featuring a stream of life updates and photos from long-forgotten high school or varsity acquaintances.
The problem staring Facebook in the face, however, is that there is so much information and connectivity on the platform that it’s becoming hard to keep any of it straight. Other social networks, such as Twitter, Snapchat, or WhatsApp are filling the ‘niche’ cases like photo sharing or status updates that used to be Facebook’s domain.
Facebook is sitting on possibly the greatest cache of user data ever compiled. Certainly they know more about users’ affinities — their tastes and preferences — than anyone ever has. What an incredibly powerful position to be in!
A big part of using this data and information revolves around Graph Search, the platform’s Google-like internal search engine that allows users to find more specific data from their network of friends. A Google search will return a list of nearby restaurants. In a perfect Facebook world, you would get a similar list, with the added caveat that these recommendations are coming from your friends, the people you trust and, in theory, with which you share common interests.
Expect Facebook to bring the service to mobile in 2014, a move that will test its functionality as people use it on the go.
Improving its ad service may be the most important element for both its bottom line and its relationship with users. There are few things more frustrating on Facebook than coming across an irrelevant ad — one that doesn’t apply to the user’s interests or personality. It’s intrusive in the News Feed, and ultimately leads to a negative experience.
The platform encourages users to engage with the ads they come across, in an effort to better identify which ads work and what people want to see. It’s a lofty challenge with more than one billion users and one million advertisers, but it’s also a challenge Facebook will likely come closer to solving in 2014 as its efforts continue.
With Facebook launching its first auto play video ads, ad revenue should soar in 2014. Pressure from advertisers to get video ads in front of appropriate users will also be higher.
The company is rolling out the ads slowly, and only to a select number of users. Once the ads are expanded to all users (sometime later in 2014, presumably), we will get a glimpse of how effective the ad algorithm is. You can scroll past a News Feed post, but auto play ads are harder to ignore. Sending irrelevant ads to users will not only be more noticeable, it will be bad for all parties involved, including Facebook.
Another major play for Facebook will be around the development of its app ecosystem. In a recent interview in Bloomberg Businessweek, Facebook founder Mark Zuckerberg said, “We just think that there are all these different ways that people want to share, and that compressing them all into a single blue app is not the right format of the future.”
Currently Facebook offers three other apps, in addition to the main one, which are Messenger, Instagram and the soon-to-launch news reading app, Paper. As Facebook goes down the multi-app strategy it will need to think carefully about the possible fragmentation of the Facebook brand.
Of course, advertisements only work when users engage with the platform, and Facebook spent the tail end of 2013 dealing with a cloud of suspicion regarding teens on the social network — more specifically, how often they are using the site.
The most recent evidence that Facebook may be concerned about losing teen users surfaced when Facebook reportedly tried to acquire Snapchat for $3 billion in November. The photo-sharing app is popular with teens — it claims users send 400 million photos and videos per day — and it would certainly help keep Facebook relevant to the youngest generation of social media users.
We should find out in 2014 whether or not Facebook is cool when it comes to teenagers, and if it isn’t, how it plans to get back in their good graces. No matter the revenue numbers — and they should be healthy, especially with video ads in the fold — Facebook investors will undoubtedly listen carefully to what happens with the site’s youngest adopters.
As Facebook crosses the threshold into its second decade of existence, it will deal once again with the question we initially asked after the then-Harvard undergrad launched the site from his dorm room: what is Facebook, and how does it fit into our lives? As the company continues to expand its reach, we remain eager to discover the answer and whether it will continue to command social supremacy.
Facebook is not going anywhere any time soon. People always want to communicate with other people. Humankind is naturally gregarious. Social networking has been around since the Romans exchanged papyrus rolls! And while it is unknown how the next 10 years will play out for its many evolving guises, given the huge impact Facebook has already made, we can certainly expect more success to follow.
As Zuckerberg puts it, “We’re looking forward to our next decade and to helping connect the rest of the world.”
Facts you didn’t know about Zuckerberg
• Mark Zuckerberg is red-green colour-blind, which is part of the reason why the Facebook we know today is blue. • He is able to read and write in five different languages: English, Hebrew, Latin, French, and Ancient Greek • Zuckerberg claims he doesn’t own a television.• He hates public speaking, which is probably a bad thing, considering his job involves a lot of public speaking. • Zuckerberg has a very eclectic taste in music, enjoying the talents of Green Day, Daft Punk, Lady Gaga, Jay-Z and Shakira. • In 2009, following the 2008 recession, Zuckerberg decided to wear a tie for the entire year, citing the importance of the year as his main reason for the decision.• Zuckerburg lists his cell phone number on Facebook • You can’t block Mark Zuckerberg on Facebook.
Sean Sullivan is associate media director at The MediaShop. This post was first published by The MediaShop Shop Talk.
Sources include: Mashable, The Guardian, Businessweek, Techcrunch, Likes.com
IMAGE: Wikimedia Creative Commons