Saturday Dec 15, 2012

Where Facebook Stands Heading Into 2013

2013confettiIn our last blog, we looked at how Twitter is positioned heading into 2013. Now it’s time to take a similar look at Facebook.

2012, for a time at least, seemed to be the era of Facebook-bashing. Between a far-from-smooth IPO, subsequent stock price declines, and anxiety over privacy, the top social network became a target for comedians, politicians, business journalists, and of course those who were prone to Facebook-bash even in the best of times.

But amidst the “this is the end of Facebook” headlines, the company kept experimenting, kept testing, kept innovating, and pressing forward, committed as always to the user experience, while concurrently addressing monetization with greater urgency.

Facebook enters 2013 with over 1 billion users around the world. Usage grew 41% in Brazil, Russia, Japan, South Korea and India in 2012. In the Middle East and North Africa, an average 21 new signups happen per minute. Engagement and time spent on the site would impress the harshest of critics. Facebook, while not bulletproof, has become such an integrated daily force in users’ lives, it’s getting hard to imagine any future mass rejection.

You want to see a company recognizing weaknesses and shoring them up. Mobile was a weakness in 2012 as Facebook was one of many caught by surprise at the speed of user migration to mobile. But new mobile interfaces, better mobile ads, speed upgrades, standalone Messenger and Pages mobile apps, and the big dollar acquisition of Instagram, were a few indicators Facebook won’t play catch-up any more than it has to.

As a user, the cool thing about Facebook is, it knows you. The uncool thing about Facebook is, it knows you. The company’s walking a delicate line between the public’s competing desires for customized experiences and privacy. While the company’s working to make privacy options clearer and easier, Facebook’s Paul Adams says data aggregation can move from acting on what a user is engaging with at the moment to a more holistic view of what they’re likely to want at any given time.

To help learn about you, there’s Open Graph. Embedded through diverse partnerships, the idea is to surface what you’re doing and what you care about, and help you discover things via your friends’ activities. Facebook’s Director of Engineering, Mike Vernal, says building mobile social apps connected to Facebook in such ways is the next wave of big innovation. Expect to see that fostered in 2013.

The Facebook site experience is always evolving. Some users like that about Facebook, others can’t wait to complain about it…on Facebook. The Facebook focal point, the News Feed, is not sacred and is seeing plenty of experimentation with the insertion of modules. From upcoming concerts, events, suggested Pages you might like, to aggregated “most shared” content from social reader apps, plenty could start popping up between those pictures of what your friends had for lunch. 

As for which friends’ lunches you see, that’s a function of the mythic EdgeRank…which is also tinkered with. When Facebook changed it in September, Page admins saw reach go down and the high anxiety set in quickly. Engagement, however, held steady. The adjustment was about relevancy over reach. (And oh yeah, reach was something that could be charged for).

Facebook wants users to see what they’re most likely to like, based on past usage and interactions. Adding to the “cream must rise to the top” philosophy, they’re now even trying out ordering post comments based on the engagement the comments get. Boy, it’s getting competitive out there for a social engager.

Facebook has to make $$$. To do that, they must offer attractive vehicles to marketers. There are a myriad of ad units. But a key Facebook marketing concept is the Sponsored Story. It’s key because it encourages content that’s good, relevant, and performs well organically. If it is, marketing dollars can amplify it and extend its reach.

Brands can expect the rollout of a search product and an ad network. That’s a big deal. It takes, as Open Graph does, the power of Facebook’s user data and carries it beyond the Facebook environment into the digital world at large. No one could target like Facebook can, and some analysts think it could double their roughly $5 billion revenue stream.

As every potential revenue nook and cranny is explored, there are the users themselves. In addition to Gifts, Facebook thinks users might pay a few bucks to promote their own posts so more of their friends will see them. There’s also word classifieds could be purchased in News Feeds, though they won’t be called classifieds.

And that’s where Facebook stands; a wildly popular destination, a part of our culture, with ever increasing functionalities, the biggest of big data, revenue strategies that appeal to marketers without souring the user experience, new challenges as a now public company, ongoing privacy concerns, and innovations that carry Facebook far beyond its own borders.

Anyone care to write a “this is the end of Facebook” headline?

@mikestiles
Photo via stock.schng

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