Have you heard the news? According to Eric Jackson, founder of Ironfire Capital, an event-driven activist hedge fund, Facebook will be gone by 2020. That’s quite a statement about a company who single-handedly redefined what it means to “like” something.
And what will bring this social media networking juggernaut down? The way Mr. Jackson sees it, it will be the continued emergence of the mobile web and Facebook’s struggle to adapt to this paradigm shift. Even Facebook has recently acknowledged mobile as a potential stumbling block for sustained growth.
To illustrate even further the possible decline of the social media giant, Facebook had its initial public offering on May 18th, 2012 and its stock opened at $38 per share. It quickly lost nearly a third of its trading value and closed at $26.90 and as of this writing is around $27 per share.
Facebook’s traffic has also taken a hit. According to comScore’s latest numbers, Facebook had 158.01 million unique visitors in the US in June, 2012, and that’s down from 158.69 million in April and 158.93 in March. All of these numbers may indeed suggest that Facebook has reached the peak of its appeal – at least for the time being.
So what is the future of Facebook? Will it follow Yahoo’s example and eventually fade into normalcy? Not if Facebook has anything to say about it. Here are some ways the company plans on staying competitive and relevant:
Bidding:
In an effort to address claims that it’s been struggling to come up with effective advertising, Facebook plans on launching Facebook Exchange – a real-time bidding tool that will let advertisers engage targeted users on the social network based on their browsing history.
According to TechJournal.com, researcher IDC estimated that real-time bidding will account for about $6.47 billion, or 27% of the projected $18.9 billion that will be spent on online display ads in the United States in the year 2015. As its stock has declined amid concerns about lagging sales growth, Facebook is definitely working to show advertisers its website is an effective way to reach consumers.
Banks
Another market Facebook plans to tap into is the online banking market. According to David Robinson, Facebook’s director of global marketing solutions and U.S. financial services, the company is looking to offer a solution to one-on-one personal engagement with banking institutions. Their first application, which is set to launch sometime in late 2012, will allow Facebook users who are Commonwealth Bank customers, to make payments to third parties as well as Facebook friends directly through the social media channel.
Brand Behavior
Andrew Lipman is V.P. of comScore Industry Analysis and is a proponent of the potential for brand marketing on Facebook. He was recently quoted in a comScore press release stating, “The Power of Like research sheds new light on how brands are able to deliver earned and paid media at scale, amplify its effects from Fans to Friends of Fans, and understand how exposure to these media can drive the desired consumer behaviors, including online and in-store purchase.”
Facebook allows brands to maximize the impact of their social marketing campaigns by leveraging a framework that assists in moving beyond Fan acquisition to delivering reach and measurable ROI. In this way, the social channel presents a unique marketing opportunity that serves as a platform for marketing communications that reach Fans as well as Friends of Fans.
In a recent study of brand media exposure using Facebook, it was found that Starbucks experienced an increase in sales by creating impactful social campaigns. And they’re not alone. Target also saw a cumulative lift in sales among exposed Fans and Friends of Fans, as did many other companies. These examples indicate that perhaps Facebook remains—and will remain— a major player in brand advertising.
The verdict is still out on the future of Facebook, but one thing is clear: the social networking giant is still a viable and powerful resource for individuals as well as businesses, and you can bet they won’t go down without a fight.
Photos are property of Facebook.
This guest post was provided by Jessica Edmondson who contributes on social media training and Internet marketing training for the University Alliance, a division of Bisk Education, Inc.
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