Has Facebook fluffed it?
Andy Ball, Managing Director of Balls2 Marketing, talks about Facebook’s second quarter results and how the biggest social media platform in the world is clawing back its integrity.
Facebook’s second quarter results, announced in late July, saw its market value decrease by $119 billion and shares drop 19%, despite making $13.2 billion profit. It came as a shock to Wall Street analysts who expected stronger user growth and revenues.
Unsurprisingly, chairman Mark Zuckerberg has blamed investment in security and privacy for the unexpected results which also made a $17 billion dint in the CEO’s fortune. But, could these results actually be good for users?
Since the Cambridge Analytica scandal, Facebook has reportedly lost three million users across the EU and user growth in the US has been stagnant for a while. These are the areas that drive most revenue for Facebook, so it’s vital for them to get these lost users back on board. That’s the reason for this big push on privacy and security, to re-establish trust in its platform – without that, those users aren’t coming back, and Facebook is missing out on potential revenue.
Some of the changes to the platform have also limited Facebook’s ability to make money. Introducing Stories, which offers great engagement for businesses without paying for advertising, has made an impact. It won’t be long before Story ads are available to Facebook Business Pages too, just like on Instagram.
Getting users back is the focus for Facebook. That’s obvious because while Mark Zuckerberg and his team plough $billions into Facebook’s security and privacy, the company’s advertising team is resorting to traditional platforms like bus shelters and TV to communicate its new-found passion for user privacy.
For local businesses that are using Facebook advertising, there’s nothing to worry about. Facebook will remain the social media giant that it is. However, it’s probably worth keeping a keener eye on your ad results over the next few weeks and tweaking messages to stay interesting and relevant to the millions of users who continue to login morning, noon and night.