Business Trends Of Facebook

Section 1-Introduction

Facebook is a social media platform which allows users to connect with friends colleagues or people they don’t know online. Currently Facebook has 1 billion users worldwide. Facebook was set up in 2004 when a group of friends set up a social platform in order to connect students in the Harvard University. (Sabrina Barr 2018)Facebooks main founder was Mark Zuckerberg while attending Harvard along with classmates Eduardo Saverin, Dustin Moskovitz, and Chris Hughes. Mark Zuckerberg had previously developed a number of social networking websites such as Coursematch and Facewash. In 2004 Mark Zuckerberg launched “The Facebook” as it was originally known; the idea for the website originally came from sheets of paper profiling students and staff.(Sarah Philips 2007) Facebook has become a huge success mainly due to its ability to appeal to both businesses and people and its ability to interact with other site across the web.(Mary Bellis 2020) In 2019 Facebooks number of employees was 44,942 which was a 26.29% increase from 2018. Some of Facebooks main competitors include Snapchat and Instagram even though Instagram is currently owned by Facebook. In terms of advertising Facebooks, biggest competitor is Google. (Prinona Das 2019). Google currently has more than 73,000 full time employees and commands a search share of 78.65% of traffic in the US alone as of October 2017(Hitesh Bhasin 2018)

The culture at Facebook is largely influenced by the values that have been spread throughout the company since its creation. (Jessica Lombardo 2018) Examples include;

1. Be Bold- The culture in Facebook encourages taking risks even if it involves employees making mistakes. Facebook also aims to maximise the company’s flexibility in addressing business issues.
2. Focus on impact- Employees are encouraged to focus on the biggest and most important problems. This is one of the downfalls in Facebook where employees waste a lot of valuable time on and focus on the smaller less important problems
3. Move fast- Facebook prefers its employees to carry out tasks quickly and efficiently which in turn helps employees to learn faster. Facebook is based on a culture of builders. Facebook is of the opinion that that it HR react quickly to the needs of the multinational market.
4. Be open- Facebook believes that an open world is a better one. Intelligent informed people make better decisions and Facebook tries to provide as much information as possible in order to complement these informed decisions
5. Build Social Value- Facebooks main goal was to ensure the world was more open and connected. Facebook encourages it employee to work every day on bringing real value to the world.

Section 2-Business Trends

1. More shifts to private channels- At the annual F8 developed conference last year, Mark Zuckerberg shared “A Privacy Focused Vision for Social Networking” (Sehl, 2020). Nearly two thirds of people feel that using messaging apps is a safer and more secure way of sharing valuable information. A recent poll shows that 55% of markets agree that the rise of private channels has made them rethink their content strategy (Christina Newberry, 2019). Mark Zuckerberg has recently announced that Facebook plans to integrate WhatsApp, Instagram and Messenger into one messaging system. Zuckerberg is of the opinion that that users are increasingly using group or private messaging as opposed to posting to the public news feed which everyone and anyone can see. (Axon, 2019). The Facebook scandal with Cambridge Analytica was another one of the huge influencing factors in Facebooks idea to shift to private channels. In April 2018, Facebook announced that the scandal had affected over 87 million users. (Stewart, 2018) Companies and brand-side teams need to be aware of Facebooks changes and have strategies in place, which understands how interact with audiences in more private social environment. (Garner, 2019). With Mark Zuckerberg’s vision of Facebook becoming more private orientated, there are many implications. Facebook puts ads into user’s feeds and messaging apps do not have these feeds. Those ads are very valuable to advertisers because Facebook can target people based on the information they get from their profiles. If Facebook goes private and everyone is using messaging apps with high levels of encryption, it will become very difficult for Facebook to target people with ads moving forward. (Axon, 2019) (Wagner, 2019)

2. Social Commerce- Social Commerce is a combination of social media and e-commerce. A recent survey in December 2019 that 11% of shoppers used Facebook as a platform to purchasing channels on black Friday and 14% on cyber Monday. This shows the influence Facebook has today in luring customers by attractive offers and brands who simply want to increase their revenue and brand. (Team, 2020) Today Businesses can create an entire store within Facebook. The website ConversionXL carried out a case study on a brand, which was experimented with a Facebook shop. Results from the case study showed;

• Within 90 days approximately 60,000 users visited the store
• These visitors purchased at a 0.5% conversion rate which lead to more than $15,000 in revenue (Pusztai, 2019)

Although Facebook’s user experience is not dedicated to social shopping, the social platform is a key influencer for retail brands, which makes it a key driver to ecommerce sites. According to Adobe, Facebook drove 80.4% of all US social referral to retail sites in Quarter 1 of 2019. (Lipsman, 2019). There are clear signs that Social Commerce will continue to grow. North American e-commerce agency Absolunet has identified the following keys stats:

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• 87% of e-commerce shoppers believe social media helps them make their decision
• 1 in 4 business owners are selling through Facebook
• 40% of merchants use social media to generate sales
• 30% of consumers say they would make purchases directly through social media platforms (Llewellyn, 2019).

There are positive effects of Social Commerce on Facebook such as Facebook Shopping reaching new heights. Companies are now taking Facebook shopping to a new level with F-Commerce. Stores that are heading towards this social business Facebook nirvana are stores such as Baby and me gifts which has its Facebook page powered by Big Commerce. The Integration with Facebook provides approximately 50% of all their online sales and is proving to be as effective as e-mail marketing. (Bullas, 2020)

3. Mounting Political Pressure- Already this year, Facebook executive Andrew Bosworth found himself in the news after an internal memo was leaked to the New York Times. Facebook has added more control and transparency for political pages and ads. (Sehl, 2020) Facebook which is one of the most powerful social media platforms will not be changing its controversial policies about political ads: It will continue to run them, it will not prevent politicians from lying in ads they buy on Facebook, and it will not restrict campaigns ability to target groups of voters with their ads. (Kafka, 2020) Mark Zuckerberg speaking on Facebook’s earnings call doubled down on his policy, reiterating his argument that private companies should not have the power to censor politicians. Politicians spend millions buying “reach” but they are not a significant contribution to Facebook’s earnings (Nuttall, 2019). Future effects for Zuckerberg not banning political ads could be damaging and costly. Elizabeth Warren (D-MA), ran a fake ad claiming Facebook CEO Mark Zuckerberg has endorsed Trump’s re-election. Warren also, without evidence suggested that social media had adopted the policy as part of a backroom deal with Trump (Stewart, 2018)

4. Upgrades to Messenger, with pivots to desktop- Mobile reigns supreme. In fact, 94% of all ad revenue comes from mobile. (Sehl, 2020) Facebook plans to pivot into private messaging now have a desktop software component. The company said that it would bring messenger, its popular messaging client, to Mac and Windows later this year. (Newton, 2019) The revisions add to the new features to promote group-based communications instead of news feed, where people publicly post a cascade of messages and status updates. Company also plans to continue emphasizing its stories product that allows people to post updates, which disappear after 24 hours. (Isaac, 2019) Unfortunately, Facebooks pivot to privacy is missing something crucial. Zuckerberg listed the six privacy principles, but there was one glaring omission: He said nothing about how Facebook plans to approach sharing and ad targeting in this privacy-focused future. (Thompson, 2019)

5. Video Marketing- In the modern era more than half of consumers swear by video marketing as a major part of their online purchasing. Meanwhile 72% of businesses have said that video marketing has boosted their conversion rates in some way (Murphy, 2020). Video marketing has numerous advantages such as;

1. You’re Customers are watching the videos- The statistics prove that your audience is watching the video which is the only benefit you need to hear:
   1. 92% of B2B prospects consume online video
   2. About one third of shoppers will purchase a product after viewing a video add
2. Video ads do well among mobile users- The number of people watching videos on mobile devises continues to rise. One interesting statistic for companies distributing video is that 88% of short pieces, around 30 seconds are watched through to the end of the mobile. The same isn’t true for viewing an add on a computer
3. People share videos- Those who view a video add and find it interesting or valuable will share it with their followers on social media. (Daly, 2020)

In terms of the future of video marketing on Facebook in response to live video’s overwhelming popularity, Facebook has adjusted its algorithm to emphasize videos that generate conversation between users, which tends to be from Facebook live. As a result 81% of businesses prefer Facebook for their video marketing. By 2020, Facebook’s video revenue is expected to surpass 10 billion dollars.