The Future of Facebook
The Future of Facebook
By now it is clear, the future of Facebook looks bright but what can small business owners, Facebook users and the Internet itself expect? It’s a question every social media consulting firm in the nation is watching carefully but thanks to the recent S-1 and other paperwork, we now have a much better idea.
Payment Business Explosion!
While most social media consultants agree that advertising will be a major push, far fewer are preparing for the expansion of the payment business. Big mistake! Payments are now a significant part of the Facebook strategy and a fast growing segment of the total corporate profits with 15 percent of the 2011 revenue generated exclusively from payments. But keep in mind, most of that comes from games and Facebook didn’t even begin generating real revenue from payments until the Q4 of 2010. The fact that payment revenue now comprises 15% of total revenue is awe-inspiring and demonstrates a pent-up demand…as well as willingness by consumers…to use Facebook payments. Expect to see more games but also the rapid expansion of virtual goods and services.
Bottom Line for Business: The Facebook S-1 description says it all…” Payments integration is currently required in apps on Facebook that are categorized as games, and we may seek to extend the use of Payments to other types of apps in the future.”
With 28 percent of all display ads in the United States being served up by Facebook alone, it might seem like the company has little room for growth in this area. Don’t underestimate the influence of Facebook. Not only are the advertisements extremely inexpensive, but by selling via an auction basis and keeping prices far below those of other online advertisers (not to mention traditional print advertising), Facebook opens the doors to literally millions of small business owners that would otherwise find it difficult or even impossible to launch major advertising campaigns.
Bottom Line for Business: Facebook is expected to expand the total reach and influence of advertising options available for small business owners well into the future. Combined with mobile marketing and payment solutions, Facebook may become an “all in one” solution at some point in the future.
Facebook specifically cited mobile as one of the primary growth areas to be targeted with small advertisements to be expected as early as Q2 of this year. With more than half of the current 845 million active Facebook users accessing the site via cell, tablet or other mobile devices, a mobile advertising strategy is listed as a top priority.
Bottom Line for Business: According to industry insiders, one of the upcoming features coming soon to a site near you is the inclusion of “featured stories” which will be pushed to readers via mobile news feed. In fact, the newsfeed along with sponsored links are one of the hottest trends in social media marketing. Combined with targeted lists and location specific targeting, these powerful tools may totally revolutionize marketing for years to come.
In the past, search engines provided the majority of all information courtesy of keywords prompting and complex algorithms. While search isn’t going away, a new type of search is poised to gain traction…social search. Rather than base a search on keywords or other imprecise variables, social search builds upon your prior interest areas, affiliations, relationships, location and other constants to provide meaning and relevant results. Zuckerberg said it best in his open letter to shareholders:
“Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries. There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future…. By helping people form these connections, we hope to rewire the way people spread and consume information.”
Bottom Line for Business: Traditional forms of Internet marketing and advertising are changing fast. In the not so distant future, relationships are likely to matter as much as keywords. Those that are connected to “movers and shakers” will have social clout and influence. Those that lag behind may find it difficult to impossible to catch up once a critical saturation point is met for each given industry.
Data, Data, Data
Facebook is more than a social network – it is now big business and part of that business is the collection, analysis and distribution of user data….and boy-oh-boy does Facebook have a LOT of data! With one of the most sophisticated computing systems in the world, Facebook is actively compiling a growing amount of information about every user both in the United States and globally. You might forget…but chances are Facebook won’t. Deleting doesn’t remove the information from the database…only from your personal view. So, why all the information? Well for one, it is the cornerstone of good advertising and marketing. Demographic data has always been the lifeblood of the marketing and advertising community. In the “old days” it may cost $1 or more per contact to acquire basics such as name, address, household income and age. Facebook not only knows that but also where you like to eat, shop or spend your leisure time.
Bottom Line for Business: Facebook has taken on the role of both advertising and marketing medium as well as demographic researcher. By collecting extensive user data then offering it ‘on demand” to advertisers and marketing concerns, Facebook has created a perpetual motion machine for marketing. Expect enhanced insight into user trends, targeted advertisements and other pertinent offerings in the near future.