Monday 20 November 2017

Facebook grows up: putting user numbers in perspective

Mark Zuckerberg started Facebook in his Harvard University room in 2004
Mark Zuckerberg started Facebook in his Harvard University room in 2004

Matt Warman

WHAT does ‘on Facebook’ mean?

 For some people – me, for instance – it means it’s one of my dozen permanently open tabs in Google Chrome, looked at sporadically. For others it means checking it every few days or weeks or months, and for others it means obsessive, regular engagement. No photograph can go unliked, no status without comment.

But not all of those categories would show up as 'active users', Facebook’s own rather conservative measure. More than a billion people use the social network, which is growing strongly in India, Brazil and other emerging markets. Just a tiny percentage falling outside the range makes a huge difference.

As Jan Rezab, chief executive of SocialBakers, puts it “The monthly active user count is statistically vulnerable to more casual users of the platform, users that don't use it that often and might fall out of the 30-day range from time to time. And yeah, my grandpa might sometimes not be an active user on Facebook, even though he is using it.” The company, who claims its data has erroneously been used to report huge falls in Facebook’s user base, believes usage is essentially flat because adoption is at saturation point.

“The UK is inflecting in terms of numbers at near full penetration on Facebook,” says Rezab. “I can't imagine their fans could grow by 10–20M new users, although this depends if they allow teens under 13 on the platform and furthermore largely depends on their mobile adoption.”

So we can safely assume it’s not true to say that more than one in 20 UK users gave up on Facebook in the last month alone. Or fiar to imply that it completely lost 6m US visitors, down 4 per cent, and 1.4million UK users, a fall of 4.5 per cent.

Nonetheless, the company itself warned investors recently that "younger users" may be opting for "other products and services similar to, or as a substitute for, Facebook". It’s not so much in decline as stabilising, and working out how best to appeal to those users who really are valuable.

Those rival services are thought to include other social networks and messaging apps such as WhatsApp, although the network is continuing to grow strongly in new territories such as Brazil and India, which saw growth of 6 and 4 per cent last month respectively. Facebook needs to make sure it can continue to engage with its users, and to make advertising really work for them.

Indeed, the site is preparing to reports its latest profits on Wednesday, with revenues expected to reach $1.44bn, up from $1.06bn. Mobile currently accounts for a quarter of that. Facebook is clearly getting better at making serious amounts of money from users, and also at making sure businesses pay for using it as an advertising platform.

A number of businesses have begun complaining that if they want to show up in their fans’ news feeds, Facebook makes it much easier if they pay, and seems to have made it much harder if they don’t. As one local business owner told me recently, “That’s fair enough, but it’s not like it used to be.”

Facebook itself also warned that its users are switching from using it on computers to smartphones and tablets. The company recently announced its Facebook Home app, which it said would mean the site was “best” on a mobile device. It is wrestling with how best to monetise the number users on mobile phones and tablets, where smaller screens make adverts less attractive.

In that sense, I doubt founder Mark Zuckerberg loses much sleep about how he gets to 2billion users. But new converts to the site, especially those in the developing world, will see a much more refined version of Facebook, and are likely to be more valuable to potential advertisers. Existing users, not least through apps such as Facebook Home, will meanwhile be cajoled into endlessly engaging with their friends, and also with the brands that want to be their friends.

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