On a recent earnings call, Mark Zuckerberg said that “people around the world spend on average more than 50 minutes a day using Facebook, Instagram and Messenger.”
Facebook has more than 1 billion active users every single day, more than 1.6 billion active users every month.
An average of 50 minutes a day.
On the one hand, like any average, Facebook’s average daily usage number is distorted by the heavy users spending many hours a day on Facebook. “Internet addiction disorder” might eventually be classified as a psychological problem.
But on the other hand, an average of 50 minutes a day over a global user base of 1.6 billion people is a massive, almost unbelievable number. It is hard to comprehend the huge impact that Facebook is having on our personal lives, on its competitors, on the technology industry, on media, on advertising, on our world.
The earnings call came at the end of a week of earnings reports by technology companies.
• Google: missed projections.
• Microsoft: missed projections.
• Twitter: missed projections.
• Apple: missed projections.
• Facebook: wildly exceeded expectations, nearly tripling its quarterly profits.
From the New York Times: “In the first quarter of 2016, 85 cents of every new dollar spent in online advertising will go to Google or Facebook, said Brian Nowak, a Morgan Stanley analyst.”
Facebook may not be responsible for the collapse of online and print media, but it is almost the only company benefiting from it. All publishers except Facebook are increasingly fragile. Mashable and Salon have both had recent layoffs. BuzzFeed is signaling trouble ahead. Gigaom collapsed last year. And of course even before this most recent meteoric rise by Facebook, newspaper advertising revenue had fallen by 70 percent between 2000 and 2014.
But there is another aspect of Facebook’s global domination, and it’s even more important than those overall numbers suggest.
Mobile ads accounted for roughly 80% of Facebook revenue in the first quarter. In the earnings call Mark Zuckerberg added that “in recent weeks Facebook is consistently seeing more than 1 billion people using Facebook on mobile every day.” Derek Thompson reports in the Atlantic that “Facebook so dominates the market for mobile attention that it is projected to command almost 30 percent of total display advertising revenue in the world this year.”
We are shifting our time and our attention to our phones instead of our computers, and Facebook is the overwhelming beneficiary of that shift.
Ben Thompson of Stratechery summarizes it this way:
“Mobile is a great market. It is the greatest market the tech industry, or any industry for that matter, has ever seen, and the reason why is best seen by contrasting mobile with the PC: first, while PCs were on every desk and in every home, mobile is in every pocket of a huge percentage of the world’s population. The sheer numbers triple or quadruple the size, and the separation is increasing. Secondly, though, while using a PC required intent, the use of mobile devices occupies all of the available time around intent. It is only when we’re doing something specific that we aren’t using our phones, and the empty spaces of our lives are far greater than anyone imagined.
“Into this void — this massive market, both in terms of numbers and available time — came the perfect product: a means of following, communicating, and interacting with our friends and family. And, while we use a PC with intent, what we humans most want to do with our free time is connect with other humans. It turned out Facebook was most people’s natural habitat, and by most people I mean those billions using mobile.”
Facebook is gearing up now to deliver live videos as the next step in its evolution, hoping that the bloom will fade for Snapchat and that live video will be the next big thing to grab people’s attention. Facebook also confirmed that it is in talks with the NFL about buying the rights to stream live football games. It has opened conversations with agents about bringing in “actors, athletes, music artists and others into its live-streaming fold.” In other words, Facebook intends to become a content provider in addition to being the platform where users share content.
Last year Pew Research Center found that almost two-thirds of Facebook users say that it serves as a source for news about events and issues outside the realm of friends and family. Facebook is trying a number of different initiatives to give you news so you’ll stay in the Facebook app on your phone instead of opening a browser window to another site when you click a link. At this point Facebook’s dominance over the media can make almost anything controversial, so there was quite a fuss recently when an anonymous source alleged that Facebook was systematically suppressing conservative news headlines. That story deserves some attention because it turns out on close study to be completely uninteresting.
When you open the Facebook app on your phone or visit Facebook on your computer, you’re looking at your News Feed, aka your Timeline, showing the content posted by your friends. You probably thought that’s what the story about suppressing conservative news was about, right? Nope. The News Feed is generated by a bunch of algorithms. If your friends are conservative and you follow conservative businesses and causes, your news feed will show you conservative posts. Nothing to do with the headlines about “Facebook suppresses conservatives.”
The headlines were about Facebook’s “Trending News” feature. Go take a look at it so you know what we’re talking about. I’ll wait.
Yeah, you couldn’t find it, could you? Nobody can. Maybe someday it will be meaningful but right now it’s uninteresting and ignored. It’s buried in the search menu on the mobile app. It’s at the bottom of the right column on a computer screen. It’s impossible to make your eyes focus on it. They keep sliding over to the News Feed.
The headlines about “suppressing conservative news” came from anonymous sources complaining about an unused Facebook feature. It was played up because conservative media adores stories about being suppressed by biased liberal media. Complaining about the bias of the “mainstream media” is a reliable standby for Fox News – you know, the most popular and most influential news channel in the country.
Nilay Patel of The Verge has the right take on this odd story:
“The entire Republican party is in disarray because of Donald Trump, who successfully rode a wave of social media to the Republican presidential nomination — social media that was shared by people on Facebook and amplified by Facebook’s algorithm displaying what was shared to audiences that might like it.
“You might notice the extreme disconnect between the idea of Facebook suppressing conservative speech and the rise of an outsider conservative politician who came to power by “speaking his mind” in ways that basically no one in either party or the media really endorsed, but spread like wildfire on social platforms like Facebook because it connected with long-simmering frustrations.
“To be more clear: it’s pretty weird to complain about human curators maybe not posting links to conservative stories in a garbage nothing box when at the same time Donald Trump says crazy racist shit and Facebook’s algorithm serves it up to an eager audience of millions instantly.”
Ignore the phony controversy. Focus on Facebook’s impact on our personal habits, on media, and on advertising. It’s obvious that we’re engaged in a long term shift away from PCs for anything other than business productivity tasks. We’re doing everything else on phones. The easy conclusion is that Apple and Google are the beneficiaries of that shift – Apple because it gets almost all the profits in the industry from selling smartphones, and Google because it’s supplying many of the ads we see on those phone screens.
In the long run, though, it may be Facebook that is the real winner, as it scoops up an increasing share of the ads and monopolizes our attention.
There is one more important thing for small and medium-sized businesses (SMB) to consider about this shift: it may affect how you advertise your business.
Ten years ago businesses advertised in the Yellow Pages. The most aggressive might place a TV commercial. In the last decade businesses have focused on their websites and tried to figure out (mostly unsuccessfully) how to rank higher in Google search results.
This is what Facebook COO Sheryl Sandberg said about small and medium-sized businesses (SMBs) on the earnings call:
“SMBs we think are a very core competitive advantage for us. It’s prohibitively expensive for most small businesses to reach people digitally. Thirty-five percent of small businesses in the United States, which is often the most advanced market, don’t have a web presence at all. And setting up a mobile app, getting people to find and download a mobile app, can be even more expensive.
“And so what’s happening is that SMBs are turning to Facebook pages as their mobile solution. They’re free, they’re easy to set up, and they already know how to do them because almost all of them are already Facebook users in the first place. And so the onboarding has been incredibly important and incredibly effective. We announced last year that we have over 50 million small business pages active on a monthly basis. Eighty percent of those are active on mobile. We then work on helping them use our ad products and upsell them to our paid ad products as well, and we announced this quarter that we hit 3 million active advertisers on Facebook and 200,000 on Instagram.
“What’s interesting is that what you see is SMBs are able to use the pull of some of the biggest brands in the world. So over 2 million SMBs have posted a video, both paid and organic, in the last month. And that happens to be many times the number of SMBs that have shot or placed a TV commercial.”
Maybe you should be focused on building your Facebook business page. That’s what your potential clients and customers are looking at.
