Just as Facebook reported positive earnings and its stock was up 15%, CFO, David Ebersam publicized that they saw a decrease in daily users for younger teens. That immediately slammed the stock as the young teen demographic is very important to Facebook's future performance. Piper Jaffray also performed a study that 23% of young teens cite Facebook as the most important social media platform, down from 33% 6 months ago. Many people wonder if Facebook is losing its "cool" image as a much older audience including parents are becoming Facebook users. They may be losing early adopters as other social platforms are taking on more importance. Facebook feels a lot less exclusive now and is open to a very large audience when initially it was just for college students. In addition, its heavy focus on advertising is seemingly turning off users. As a Facebook user, I get irritated by the amount of advertising (e.g. malpractice lawyer display ads on the sides) and I feel this strongly correlates with it becoming less "cool."
Forrester also came out with research showing that advertising on Facebook is very ineffective. Clearly Facebook advertising requires scale and although a small percentage of ads may reach the intended audience, there still is no better way to effectively target ads to users because Facebook has so much information on them. However, if they lose young teens and user engagement decreases, this significantly hurts their business as I would imagine many large advertisers are using Facebook to target young teens. The future of Facebook is uncertain, but what is certain is that they will still heavily focus on making their advertising more effective. Currently, it is argued that only 15% of ads are intended for the targeted audience and this percentage must improve.
No comments:
Post a Comment