You may have been hearing it for a while now. The voice in your head that’s questioning, “Is Facebook dead?” It’s true, the social media giant continues to scramble to keep up with its competitors. A quick walk down memory lane reminds us that Facebook addressed the challenge of Instagram by acquiring it in 2012, it took on Snapchat by rolling out Facebook Stories in 2017, and it has attempted to compete with TikTok by rolling out Instagram Reels in 2020. But is it too little, too late for Facebook?
Undoubtedly, Facebook’s biggest competition is TikTok, a short-form, video-sharing app that has ranked as the #1 most downloaded app over the past two years. An eMarketer report projects TikTok’s US net ad revenue to reach $5.96 billion in 2022. The app’s total revenue is predicted to be larger than Twitter and Snapchat combined. This is all just three years since TikTok launched its advertising platform.
What’s Next for Facebook?
As expected, leaders at Meta (formerly known as Facebook, Inc.) are trying to find new ways to adapt and learn from the success of TikTok to keep advertisers on board and users visiting their apps on a regular basis. According to a leaked internal memo shared by The Verge, Facebook’s proposed solution is transforming the app into a “discovery engine.” The platform is essentially looking to mimic TikTok’s “For You” page by recommending posts on Facebook’s main feed outside of accounts that people expressly follow. Meta is also looking to combine Messenger and Facebook once again, a reversal of their 2011 decision to separate the apps. This choice takes aim at TikTok’s private messaging feature by making it easier to share content with friends. As expected, Facebook will continue to emphasize video content by prioritizing Reels and Stories across Facebook and Instagram.
Meta’s ultimate goal is likely to lure more Gen Z users, an audience that makes up roughly 35% of Facebook’s userbase. By making the Facebook app more visual and user-friendly, Meta executives believe that they can continue to grow the app and reach new audiences. If Facebook fails to stay relevant for upcoming generations, however, who media buyers are able to target on the app will be heavily impacted.
What’s Next for Advertisers?
While Facebook’s net ad revenues are growing, competition between social platforms and privacy changes, such as Apple’s iOS14 update, make success an uphill battle. We predict that advertisers will look to diversify their media mix to lessen reliance on Facebook, particularly as costs climb and advertisers fight back against walled gardens, seeking alternative solutions to the cookie-less future. After all, people are not solely consuming media within walled gardens. That being said, Facebook is still the third most-visited site in the world and the largest social media platform. Media buyers can’t and shouldn’t ignore that. Facebook has some of the most advanced targeting capabilities and is deeply efficient at reaching audiences on a large scale. Even if the “who” we target on Facebook changes over time, it’s certain that an audience will still be there. It all depends on the advertiser and whether or not targeting that audience is right for their business.