Why Mobile Continues To Be The Key To Facebook’s Future
By Mike Weston
Facebook’s latest earnings report provoked a mixed reaction amongst analysts, shareholders and commentators. Some experts focused on the social media giant missing its targets, others pointed out the shares were overvalued and the rest paid more attention to the headline revenue or hiring figures. From my point of view, the most important figure in Facebook’s results is the growth of monthly mobile users by 24% to 1.25 billion.
Facebook has been a shining light in the mobile space, betting heavily (and correctly) on it being the main driver of revenue. This has set it apart from other platforms like Twitter which has struggled to leverage its data and users into an attractive avenue for marketers. Any marketer worth his salt knows that data and context are paramount to effective advertising. Consequently, mobile presents one of the strongest paths for advertising revenue growth because of its potential to create even more targeted marketing campaigns. The ad tech industry is only at the beginning of its journey in the mobile space with location-based advertising the tip of the iceberg. By marrying mobile information with data collected from, for example, wearable devices, beacons or mobile wallets, the most complete picture of the behaviour, preferences and needs of consumers will be created. Crucially, because of the personal nature of mobile phone use, many of the issues surrounding attribution will be solved.
Facebook will face two important challenges in the mobile space over the next few years – privacy and relevance. When ads delivered via Facebook become more targeted on the back of additional data, such as the lifestyle information wearable devices can deliver, there is a risk that many users will feel that the company knows too much about them. Similarly, social media users are notoriously fickle and recent history has shown this as devices rise and fall rapidly in popularity – tablet use is a case and point. The advent of smart watches poses a dilemma for Facebook in relation to how heavily to bet on it as a key channel or as a supplement to its approach to mobile. At the moment, Facebook has maintained its popularity amongst users through a very smart acquisition policy. WhatsApp and Instagram have undoubtedly helped to maintain the social media platform’s relevance amongst the key, younger demographic.
Despite these headwinds, if Facebook continues to maintain its user base on mobile, revenue is only going to go up. Marketers will create more imaginative and targeted campaigns, and be able to prove worth. As this happens, brands will invest more and more money into their marketing campaigns. Factoring all of this in, it’s easy to see why monthly mobile user growth really is the only result that matters at this point for Facebook.
Mike Weston is CEO of data science consultancy Profusion. He has 18 years’ experience in digital marketing and has founded and run several successful, pioneering tech companies. In 2003, Mike founded and became Managing Director of digital marketing agency Digital Oxygen. The agency specialised in rich media advertising and email marketing. Mike sold Digital Oxygen to US-based email marketing solution provider Silverpop in 2005. He then became Managing Director of Silverpop and founded its UK office. In only three years, Mike guided Silverpop to a market leading position in the UK, with a strong and growing presence in Europe. After leaving Silverpop in 2008, Mike became VP of International Sales at behavioural advertising and content technology platform wunderloop. He led the sales function for wunderloop in Europe and had responsibility for P&L, revenue growth and margin accountability. In 2010, Mike became General Manager and Senior Vice President EMEA of internet marketing company Lyris, establishing the agency’s London office and expanding its operations into France. Mike left Lyris in 2012 to become CEO of Profusion. Mike was educated at the University of Auckland. His speaking experience, in the UK, United States and across Europe includes eTail, eTail West, Internet World, TFM&A, Local Social Summit, e-Commerce Expo, Ad:Tech and MediaPro.