Jeff Bezos made some headlines recently when he declared that Amazon was not too big to fail. “In fact, I predict one day Amazon will fail,” CNBC reported him as saying. “Amazon will go bankrupt.”
Can the same be said of Facebook? In April, I wrote an article saying there’s no point in boycotting Facebook. It’s too big, too pervasive and besides, it owns Instagram and Whatsapp – two other services that are pretty indispensable to modern life. But if you take Instagram and Whatsapp out of the equation and just focus on Facebook the social media platform, is it really too big to fail?
I used to think Facebook would continue to grow from strength to strength for the foreseeable future but lately I’m beginning to wonder whether that’s still true. Let’s look at Facebook as a social network, a corporate marketing platform and a content platform.
SOCIAL NETWORK
You’re unlikely to see any direct competitor rise up and lure Facebook’s members away.
With 2.2 billion people on Facebook, it has a strong network effect. People wouldn’t want to migrate to a rival platform because everybody they know is already on Facebook.
No doubt, lots of young people prefer Instagram. Its appeal is obvious. Firstly, it’s very much a mobile based-platform and young people do everything on their phone. Secondly, it’s a picture-centric platform which suits the millennials well. They want to share what they’re buying, eating and doing in visual form. That’s why Instagram has erupted in popularity. But practically all of these people are also on Facebook. So, it’s not either/or situation as would be the case when it comes to a direct rival.
Instagram is an indirect rival as are Twitter and LinkedIn. All serve very different purposes.
Twitter, for example, is a micro-blogging site for people to share quick updates and links to stuff they want to share with others. LinkedIn is a professional workers’ site where people network for business purposes and to share business-centric content. As with Instagram, people on LinkedIn and Twitter are also usually on Facebook too.
So, you will not see a mass exodus of people from Facebook. What will happen over time though is that updates on Facebook might become less and less frequent as people start spending more time on indirect rivals that better serve their purposes.
If you’re young and active, there’s a high chance you’ll want to chronicle your activities on Instagram. If you’re a political activist or a news junkie, you’ll probably prefer Twitter. And if you’re looking for business opportunities, you’ll probably prefer LinkedIn. Will you delete your Facebook account? Probably not but you might not update it that much anymore.
CORPORATE MARKETING PLATFORM
When the concept of Facebook Pages first emerged, it was great news. You could create an official page for your business which came with analytics (called “Insights”) built in. All you had to do was post up interesting content and over time you could develop a following (called “Likes”). It was a great way to reach out to your customers and potential customers. Best of all, it was free. But like all good things, it came to an end. And it was Facebook’s fault.
Facebook gradually tweaked its algorithm so that Facebook Pages would have lesser and lesser organic reach (this refers to the ability of those posts reaching their intended audience).
Facebook doesn’t publish exactly what the organic reach are for Pages but a few years ago, it was estimated to be about 2.5 per cent. That means if you have 100 followers, fewer than three people will see your content. If you think that’s a small number, you might be shocked to know that today the organic reach for Pages is estimated to be at most 1per cent. Yes, that’s right: 1 out of 100 followers will see your content.
The reason for this throttling is obvious, Facebook needs to make money so if you want to reach your target audience, you have to pay for it by way of boosting a post or taking out some Facebook ads. No more free lunch.
This was a big mistake. Instead of throttling the organic reach to such an incredibly low level, Facebook should have come up with premium functionalities that companies could pay for to better manage their relationship with their followers.
Because the organic reach has been so severely throttled, companies will pay for outreach until they have a big enough database of their own. Then they’ll stop paying. At that point they’ll stop posting content on Facebook too. What’s the point of posting new material if less than 1 per cent of your followers will see it?
CONTENT PLATFORM
Facebook definitely wants you to post content directly onto Facebook rather than merely share a link from some other platform. If you post a video directly onto Facebook, you’ll get more reach and more engagement than if you were to post a link for the same exact video hosted on, say, YouTube.
It’s the same for any other type of content. If you were to post a picture or some text directly onto Facebook, those posts will get more reach and engagement then if they were in the form of links from some other platform. But nobody really uses Facebook as their primary content platform. Many video bloggers will use YouTube while bloggers will use Wordpress or Blogger. And a lot of picture-based social influencers will simply use Instagram.
The reason is three-fold. Firstly, while Facebook is easy to use it doesn’t have the kind of functionalities that specialised content platforms have.
Secondly, it’s not easy to monetise your content on Facebook. In contrast, content platforms like Patreon are designed to make it easy for your audience to pay a subscription or pay per item for the content you generate.
Thirdly, it’s that whole throttling thing again. If you use Facebook to host your work, you’re not going to get much of an audience through your postings unless you pay for them to be boosted.
A GRADUAL DECLINE
Because Facebook is such a juggernaut, we’re not going to see a sudden drop in membership despite its throttling policy. People are not going to leave Facebook en masse. After all, there’s no harm in having a presence in the world’s largest social network. But they might just become inactive on it.
Can Facebook turn this around? Of course. It can tweak its algorithm so that it can once again be a place where people can post content and know that it will reach their friends and followers. But will it? Who knows but if it doesn’t, it will be to its own detriment. Nobody’s too big to fail.
Oon Yeoh is a consultant with experiences in print, online and mobile media. Reach him at oonyeoh@gmail.com.