June 11th, 2012
Recent articles, news and commentary got me thinking about how the whole landscape of social media is shifting and that mobile is key to how people will use and interact with social media which will affect everyone operating in this space, including Facebook.
Seeing this chart from Chetan Sharma Consulting makes me think that the world has gone slightly mad if there are more mobile devices out there than people who have access to fresh water.
The growth of smartphones – especially over the last few years – has been phenomenal. And it is these devices that are the norm for the consumers of tomorrow (i.e. the teens of today).
Some recent stats from the latest Cisco VNI Mobile Research make scary reading. In 2011, mobile data traffic was 8 times greater than all of the entire global Internet traffic in 2000 (597 petabytes vs. 75 petabytes). That was only a dozen years ago, but it may as well have been eons. Within a few years Smartphones will account for nearly 50% of all web traffic. Given the number of mobile devices in the world is nearing the amount of people on our planet, that is one hell of a lot of smartphones.
This raises a few more questions.
Have we finally reached “the year of the mobile”? Why did Facebook buy Instagram? Will HTML5 get round compatibility issues across varying mobile platforms or be another flash in the pan that didn’t amount to much (like WebOS)?
But whilst mobile is spreading like wildfire, recent data and articles have talked about the demise (or not) of social readers, the decline of Zynga and the growth in video sharing platforms. Are all of these telling us something about a shift that is happening?
Is Facebook on the way out and are we starting to get fed up of its intrusiveness and its big brother attitudes towards providing content that “is right for us”?
Are Facebook worried that as web usage becomes more and more prevalent through mobile that their current platform/app is not fit for purpose?
When Facebook launched, MySpace had become old, messy and unusable and quickly lost critical mass. Is the same about to happen to Facebook with the growth of less structured platforms such as Pinterest and Tumblr?
Other recent trends also add to the overall picture that things are changing. Social readers launched in a blaze of glory last year (Built on Facebook’s Open Graph Platform). Trouble is, you like a few pages and suddenly your timeline is filled up with articles they [Facebook] think you should be reading. And users are tailing off rapidly, as people get fed up of being lectured.
John Hermann from Buzzfeed writes “And god, why would I sign up for the thing that seems to have tricked its way into my timeline? It’s an app that broadcasts Internet illiteracy for everyone to see.”
We know Facebook are constantly tweaking their algorithms and they are testing the concept of fewer trending articles and shorter feeds. They also claim that whilst users are down, engagement levels are up. Facebook’s response to the recent swathe of articles on this “We’re trying to get the right content in front of people, to up the signal to noise ratio.” (Quote from Mashable)
Whilst this would seem an altruistic endeavor, for higher signal-to-noise ratio, read higher engagement levels. For high engagement levels, read more advertising dollars.
So are people being put off by social readers or are they getting bored of Facebook and running off to the next shiny bright object?
Maybe. I recently asked my daughter if she wanted a Facebook account, to which she replied: “I am not sure I want Facebook, it’s for old people and they control things too much!”
Perhaps some young people don’t have any sense of ownership or sense of belonging to Facebook? Is its rigid control over look and feel, forceful implementation of new features and opaque security model alienating the next generation of users?
It is hard to be definitive but there are many signs that things are changing and that Facebook has to change. Consumer habits are changing in the way they use the web and social media in particular, any of the social media platforms have to adapt to stay ahead of the curve, especially as new – and different – competitors enter the market.
The growth of mobile and Social 3.0
Latest Comscore data shows that whilst Facebook maintains a huge lead in terms of average minutes per visitor, aggressive new kids on the block like Tumblr and Pinterest (despite the recent copyright furore) are making inroads into their ‘face time’, leaving other established players like Twitter far behind.
To counter these threats, and knock out another quickly growing competitor, and one that had grown even quicker than them, Facebook bought Instagram for a billion dollars!
The method in this seeming madness (Instagram only had 13 employees) is that it was recently the most downloaded photo-sharing app globally (its Android app was adding 1 million users a day, its IOS app 25 million) and a lot of Facebook’s traffic is from photo sharing. Facebook also has to get better at mobile, and in buying Instagram, they’ve acquired a piece of technology and a user base to help them do that. They knocked out a threat and got some cool tech into the bargain. Other companies were beginning to look at Instagram as well, despite being in the middle of an IPO Facebook had to move quickly and decisively.
If we look at the latest data from AppData on Facebook Apps, this also gives us an idea of a shift occurring from social networks to social sharing amongst app users in a social network environment. Especially in images and video.
In this recent report, SocialCam, Viddy and Chill, two video sharing platforms and an app that generates random noise. No games!
SocialCam is now the largest app on Facebook with over 42M monthly average users. Chill went from nothing to over 7M MAU in a week!
And if we look again at the Cisco VNI Mobile 2012 data, we can see that it is predicted that by 2016, 70% of web traffic will be mobile video. This, combined with the growth of video sharing apps means that if Facebook doesn’t adapt and embrace mobile then their revenue growth will stall even quicker than it is currently doing.
This apparent move away from gaming is backed up by latest data on Zynga. Their acquisition of DrawSomething (OMGPOP) in March for $200M instantly bought them around 12M (source AppData) users. But since then, life has not been so pretty. Daily average users of Zynga games are now back to pre-DrawSomething levels only two months later. Is this the start of a terminal decline or just a blip? The halving of its share price would seem to indicate a long term problem.
Part of Zynga’s troubles can be traced back to changes made by Facebook (there’s a surprise), limiting the viral channels the games makers use to invade your newsfeed with updates and requests. Though, going back to my earlier comments on intrusiveness, this is probably no bad thing as far as users were concerned. But, these changes forced companies such as Zynga to look at creating their own platforms, trying to divorce themselves from Facebook. So ironically, the very intrusiveness of the gaming platforms initial growth that was welcomed as innovative at the time, ended up back-firing on them as Facebook sought to counter criticism by changing the rules.
Going back to my comments on Instagram, interestingly Zynga’s biggest area of growth is mobile. Games such as DrawSomething and WFF have a vast amount of mobile users. Is this the way forward for them? Facebook Camera app has just launched; funny, looks just like Instagram but not as good. Perhaps a billion dollars was not such a bad price after all. Could Instagram become Facebook’s You Tube?
Rumours are also gathering apace that Facebook will launch a smartphone this year. Now that Google’s purchase of Motorola has gone through, is this yet another defensive move?
Recent data from the US would seem to indicate that whilst mobile advertising (and let’s face it, advertising dollars are what they are all after) is a huge growth area, it might be a little bit misleading, as it might never catch up to time spent on mobile devices.
Then there is also the whole native app versus HTML5 debate. At the moment, ad spend through Nexage (one of the leading mobile ad exchanges) would seem to show an even split with both having their merits and weaknesses. There is no right or wrong answer as to what will win, remember BetaMax vs VHS, the better technical product lost in the face of marketing and content.
So where does this all leave us?
There are interesting times ahead. Will Facebook become the new MySpace and become old and uncool? Will Pinterest get round its major copyright issues? Will Tumblr ever actually make sense? Will Google ever admit that Google+ is a monumental failure? Or are we all actually living in a new world created using Unreal Engine 4?
Only time will tell.