As is my normal morningtime ritual (and in this I’m like most women my age), today I made a cup of tea and opened my Facebook page to be greeted with a message encouraging me to connect with more friends using Facebook’s Friend Finder email address book plugin. In recent weeks I noticed I hadn’t added any new Facebook friends in quite a while, so it was an opportune moment to receive the message. Then again, I feel I’m connected with alot of people already – over 250. Most of these people I know from the “real world”; school friends, family, close confidants or people I met while traveling or through work. How many more people do I have in my social network that I need to connect with online? Do I really want to be Facebook friends with my elder brother’s secondary school classmate and how is this going to benefit me?
Later on in the morning I came across this article from Gizmodo which discussed the fall off in new Facebook sign-ups for the month of June in the US. While sign-ups were still happening (over 320,000 for the month), there was a significant drop from the massive 7.8 million sign-ups in May. Analysis revealed that the fall-off was happening in the 18-44 year old age group while teen and older audiences were still increasing. Where previously a teenager might be expected to join MySpace (or Bebo in the case of Ireland and the UK) they are now joining Facebook. The growth in the 45+ year age group is a more interesting trend given that these are individuals who would likely never have had a social network profile before, but have been attracted to Facebook because of its ubiquity. When more photos are stored on Facebook than on any other site in the world that’s at least one very compelling reason to join in.
The sign-up figures indicate that Facebook is coming into an interesting point in its life-cycle. You could say that Facebook is ‘growing up’ and like any business as it ages it has to adjust. The strategy needs to move from one focused on growth to one focused on retention of users. We all remember the excitement of first joining Facebook; the addictive nature of adding new friends, finding long-lost connections and tagging embarrassing photographs. Four years on since the addition of the News Feed feature and explosion in Facebook users, the challenge now is in keeping Facebook as an integral part of peoples online lives. In addition to this, Facebook have to figure out a way to monetize the site without alienating users. The recent privacy controversy shows that people will react negatively if they feel their private information is being shared for the sake of advertising revenue.
Facebook are addressing this retention issue and they are still at the vanguard of an evolving social internet. Around about lunchtime today, and aptly enough, via Facebook, I came across this very interesting presentation which discusses the shift from an internet driven by consuming content to an internet driven by relationships. Consider that almost anywhere you go on the internet, you have the ability to share with your Facebook friends without actually being within the Facebook interface? That’s a powerful change.
From a monetization point of view, the constant innovation and openness of its API has meant that businesses are migrating to Facebook because it’s where their customers spend their time online. Their “Like” button is ubiquitous, although only introduced at the end of April this year. But what we must not forget is that while Facebook continues to grow, so too do its users continue to evolve. While we don’t believe that Facebook will cede its dominance of the social networking sphere within the next 2-3 years, what may happen is that its users will become more selective about what they will or won’t “Share” or “Like”. Where the response rates for Facebook ads and applications are very high now, the likelihood is the rates will drop over time as the novelty factor wears off. Ad-blindness is a phenomenon well-known to the traditional marketing industry and there is no reason to think it won’t be repeated in the case of Facebook ads.
On his own blog Peter has spoken about the necessity not to sacrifice the user experience in this quest for profit. For now, as Facebook hits the awkward years of puberty after a growth spurt we’re sure there will be some mistakes made. The challenge is to mature into the type of social network that users want to grow older with too.