Caveat: My employer is one of the largest players in the social media marketing space. This post does not necessarily mirror my company’s viewpoints and constitutes my own opinion.
Yesterday, there were some statistics released by Inside Facebook with the requisite commentary from several other media outlets. Here’s one such commentary from Business Insider. And here is the set of data from Inside Facebook. What does this mean for marketers?
I’ve gotten floods of forwarded headlines in my inbox from colleagues with things like “Has Facebook Peaked?” and “Has Facebook Finally Jumped the Shark?” and “Is Facebook Doomed?”
Let’s not get too carried away.
Basically, the good news for Facebook and marketers spending money on Facebook, is that the service is still growing overall. It is nearing 700 million users, in fact. To call that sizable and impressive would be an understatement.
The not-so-good news is that overall growth is slowing and that the service is actually losing users in key territories, most notably the United States, Canada, UK, Norway and Russia. More than offsetting those losses, the service added users in territories like Mexico, India, Brazil and Indonesia.
Obviously, the caveat to these numbers are the variety of factors that happen on a month to month basis like seasonality, college graduations, and other things that can affect them not systematically. So the month to month trend is much less important to look at; instead, we’ll really need to look at these numbers in a couple months.
Do I think Facebook has reached its peak? No. Do I think some of the user losses in key countries, notably the U.S. and Canada is concerning? A little bit, yes. The reason why it is only a little is that it is impossible for a business to grow all the time. Especially with the meteoric growth rate Facebook has had. There will be peaks and valleys in their ramp up, and like I said some seasonality involved, and some people who early-adopted who don’t care for the service anymore. All of this is normal in the life cycle of a business, and especially a digitally-based business.
One colleague of mine immediately responded to these statistics with something along the lines of “MySpace Round 2″. Again, I wouldn’t go that far. I do think like any other business, there are early adopters and in this case hordes of early adopters. There is a honeymoon period, which Facebook has been in for years. Then there is a plateau, because no website or business can be all things to all people forever. Before we make any major long-term conclusions, let’s just watch the data for another month or two.
What I would REALLY like to see is a comparison of time spent on Facebook, rather than number of users, since that would be what most people and most marketers should care about. In other words, if I wanted to market my product or service on Facebook, I would immediately know there is no way I’d want to market it to all 700 million users anyway, but rather a much smaller subset of that number. Even if the number of users dropped to, say, 600 million, it wouldn’t matter to me. Or even 200 million. As long as the subset of people I was marketing to was still engaged and usage and time spent on the site were still holding firm with my audience, I’d be happy. I haven’t seen those statistics released publicly, but I believe those figures will be a lot more telling than just a drop in users in a couple key countries. Whole numbers of users isn’t something I would necessarily care about since I wouldn’t be targeting everyone anyway. If time spent and actual engagement was dropping, in addition to users, then that could be something more of a tell-tale sign.
But, like I said, we will have to keep watching it for at least a few more months. For now, I wouldn’t at all say anything has been lost from the standpoint of marketing and the potential value of the service to advertisers on Facebook.