Tag Archives: Social network

April 17, 2013 · 9:31 am

Is Facebook Becoming A Ghost Town?

How many of you are familiar with Facebook?  OK, silly question.  After all, it’s the biggest social media site.  Let’s try again.

"Ghost" Town - NARA - 543356

(Photo credit: Wikipedia)

How many of you are familiar with Wanelo, Vine, Snapchat, Kik, or 4chan?  If you have a teen in the house, you might be, since these are, according to a Piper Jaffray study, the social sites in which teen interest is rapidly growing.  Final question:  how many of you are familiar with, and used to frequent, Friendster, MySpace, or Second Life?  Emphasis on the “used to” since they’re pretty much gone.

If I was a Facebook shareholder (which I’m not), I’d be very concerned.  Not just about a couple of things I’m going to mention but also about management’s plans to grow revenues.  Let me explain.

First, the research.  According to Tech Crunch’s reporting of the aforementioned study:

Interest in Facebook seems to be declining heavily among teens. Though teens still dub Facebook their most important social network, Piper Jaffray reports that the numbers are down regarding how many teens see Facebook as the most important social media website. Over the past year, the number of teens who deem Facebook as the most important social media site has dropped from more than 30 percent to just over 20 percent.

I realize teens are fickle, but they’re also trendsetters in a lot of ways.  They’re also a notoriously difficult group to reach via ads, and the social media chatter about brands—positive or negative—is a big factor in their purchasing decisions.  Which leads to my second concern.

AdAge reported on Facebook’s plans to insert video ads in users’ news feeds:

While the format of the units isn’t totally nailed down, it’s widely assumed that they’ll be autoplay and presented in a video player that expands beyond the main news-feed real estate to cover the right- and left-hand rails of users’ screens on the desktop version of Facebook.

It won’t matter if the user or any of his or her friends have engaged with the brand on Facebook.  Users will at most see three ads a day. Now I will shut almost any site that autoplays video, especially if it’s advertising.  Let’s think about how strong the user backlash is going to be if the autoplay report is accurate, and will that backlash spill over to affect the sponsors as well as Facebook?  It just might.

One doesn’t have to look too far into the future to see the beginnings of a ghost town in the making.  If a town’s young citizens are moving away for greener pastures, can businesses and their parents be too far behind?  What do you think?

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February 21, 2013 · 11:13 am

Is Facebook Viable?

There’s been a lot written since Facebook did their IPO a while back questioning their business model.

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Some analysts say that once the company solves monetization of the mobile traffic all will be well. Others speculate that a better, more marketer-friendly platform is needed. Personally, I like to let the companies themselves identify where the problems may lie. Facebook did exactly that in their S-1 filing a year ago as they prepared to go public:

If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed.

Fair enough.   After all, without users continuing to add content, what’s there?  Which is why a couple of things I’ve read lately have me wondering if Facebook is a viable business in the long-term.  I know – it’s huge, it takes in a lot of money, and it seems sort of ubiquitous.  At one time, many of those things were said about MySpace or the walled-garden version of AOL, so bear with me.

A decent amount (low double digits at one point) of Facebook’s revenue came from Zynga‘s games.  Is anyone you know still “Villing”?  That goes to the engagement point.  More important than that (since revenue sources are fungible), is the fact that younger people don’t seem to be using the service.  In fact, the real young crowd – those reaching the age when they would normally join Facebook – seem to be focused on other services.  Instagram and Tumblr, by many accounts, are more popular with the young teen set than Facebook is, and that’s been the case for a year.

A Pew study came out the other day that should set off te fire alarms at Facebook HQ.  What it found was:

  • 61% of current Facebook users say that at one time or another in the past they have voluntarily taken a break from using Facebook for a period of several weeks or more.
  • 20% of the online adults who do not currently use Facebook say they once used the site but no longer do so.
  • 8% of online adults who do not currently use Facebook are interested in becoming Facebook users in the future.

They asked the 61% of Facebook users who have taken a break from using the site why they did so, and they mentioned a variety of reasons. The largest group (21%) said that their “Facebook vacation” was a result of being too busy with other demands or not having time to spend on the site. Others pointed toward a general lack of interest in the site itself (10% mentioned this in one way or another), an absence of compelling content (10%), excessive gossip or “drama” from their friends (9%), or concerns that they were spending too much time on the site and needed to take a break (8%).  Many of those reasons are NOT things Facebook can fix since they’re a result of what users are doing and not the platform.  That’s troubling.

So I’ll put it out there:  is Facebook a viable business in the long-term?  If it’s just old folks like me catching up with high school pals we haven’t seen in 40 years or our grandkids, is it going to be long before all we see are supplemental Medicaid insurance ads and sponsored posts for hearing aids?  What do you think?  Have you taken a break from Facebook?  Have your kids?  Is Facebook viable in the long-term?

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January 10, 2013 · 12:43 pm

How Educated Do Consumers Need To Be?

A piece came out yesterday that got me thinking.  The article was a write-up of a study conducted by Harris Interactive for the folks at The Search Agency and you can have a look at the results here.  The highlights are that most consumers have no clue how much of digital works from a business perspective even though they do know how to use the services:

  • 70% of U.S. online adults know how to post to a Facebook wall, but only 54% understand how Facebook makes money
  • More than one-third of U.S. online adults believe search engines sell users’ personal data to marketers
  • Nearly 29% believe that companies pay annual dues for use, while 20% believe that users pay for premium search features

That got me thinking about why that is or isn’t important.  The author of the piece thinks that “it may seem incidental, but a better understanding would produce higher engagement and conversion rates.”  She says this believing that understanding would increase participation.  I’m not so sure.  In fact, it might have just the opposite effect.  Knowing about EdgeRank and how it affects what information passes into your news feed as well as about the plethora of information Facebook has about everyone on the service could bother some folks and scare quite a few others.  Many people don’t understand that the search results they see are skewed (unless they are savvy enough to turn off the personalized results).

Here is a question for you:  do you know how your car works?  What happens when you turn on the ignition?  I can probably answer this for you – you don’t have a clue.  You do know, however, when the car is NOT working.  I think that’s the same with the digital services we use – we don’t need to know how they work as long as we know that they are, in fact, working.  That said, we probably do want to know if our cars are tracking where we’re going and how fast we’re driving (they are, by the way) and I continue to believe that privacy and data collection are big consumer issues that will continue to grow in importance as the details of those activities become more widely known.

What do you think?

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