09 May Has Facebook Peaked?
It has certainly been a trying time for Facebook these last few months. First, it was fake news, and now privacy concerns have hit an all-time high. Facebook lost about $100B in market value over these issues. Is the mistrust among users and a significant loss in valuation enough to take Facebook down? Let’s take a look at how Facebook is weathering the storm in terms of users and advertisers leaving the platform to help answer the question: has Facebook peaked?
Are Users Leaving Facebook?
The short answer is no. Across the Facebook brand pages we manage we saw a brief drop in fans around the middle of March when the Cambridge Analytica news broke. This was likely an immediate reaction by some people deleting their Facebook accounts. By the end of the week, things had leveled back out.
Additionally, we found data from online survey done by Tellwut that 69% of respondents who had a Facebook account had no intention of closing their account amid recent privacy concerns. Only 3% of people had closed their accounts because of the Cambridge Analytica news. Here are a few interesting stats:
- Females were far more likely to keep their account open at 71% versus males at 62%
- 18-34 age group, 5% had already closed their account because of recent privacy issues versus only 2% of the 50+ crowd
- User’s top areas of concern over a privacy breach included: location, about me, photos, birth date, relationship details, online presence, hometown, work history, website and check-ins
We were able to get additional insight on user growth when Facebook’s Q1 earnings report came out at the end of April. This past quarter, Facebook added 48 million daily active users to hit 1.4 billion users. These user numbers are a 3.42% increase over the past quarter. Daily and monthly users were up 13% year-over-year.
Are Advertisers Leaving Facebook?
Good news for Facebook, it seems that advertisers are sticking around, too. Based on Facebook’s quarterly report, they brought in $11.97B in revenue, beating Wall Street’s projection. Facebook had strong advertiser gains in Europe and Asia-Pacific which helped with a 30 percent year-over-year growth in revenue. Average revenue per user reached $5.53.
According to an article by Adweek, marketers aren’t shifting budget, but they are being more cautious.
What’s Next?
So, what is next for Facebook? My two cents is that this will make Facebook better, in time. I think users will be much more skeptical of how they are engaging on Facebook and what data they are sharing for a while, but it will take a lot more for advertisers to leave. I think all of this will require Facebook to do some soul searching and take a look at their internally on how they are capturing and using user’s data and tighten up the loopholes. Other social channels should take note and do the same.
