Facebook: Will The Next 15 years Be As Favourable To The Social Media Hegemon?
Yesterday (4th February) marked Facebook’s 15-year anniversary. Arguably no other company, with the notable exception of Google, has had as significant impact on our collective digital lives as the US social media giant. From its questionable early days as a dorm-room side-project of college student founder Mark Zuckerberg, the application was formally re-booted in 2004 and by the end of 2005 had six million registered users. Since its relocation to San Mateo in Silicon valley, its rise has been meteoric- to the extent that the majority of all digital consumers use Facebook (69% weekly active use (WAU) according to MIDiA Research’s 2018 Global Survey, reaching as high as 86% in developing countries such as Brazil).
15 years is a lifetime for a tech company and in that time Facebook’s growth has only been tempered by troubles in 2018, which proved to be the corporation’s first truly challenging year from a growth perspective. The 2017 fake news controversy following on from Brexit and the US presidential elections may have been uncomfortable for Facebook’s management, but it had zero impact on the willingness of consumers to willingly trade their data for access to the platform.
Revelations about Cambridge Analytica in 2018 started to erode that complacency, with the first glimmers of public disquiet emerging over what business theorist and social scientist Sohshana Zuboff has termed surveillance capitalism. Facebook and Alphabet-owned Google between them now dominate this process of monetising big data sets generated by mass consumer engagement with ad-supported digital services, which are increasingly being used to predict consumer behaviour as opposed to merely report upon historic engagement behaviour.
Q4 2018 shows that digital consumers continue, for now, to deprioritise privacy
Last week’s strong Facebook numbers were impressive both from a financial perspective and, crucially, from an engagement perceptive. Global daily active users (DAUs) increased by 1.9% to 1523, and monthly active users (MAUs) up 2% to 2.3 billion. Quarter-on-quarter revenue growth was even more dramatic, with global revenues increasing by 23%. Clearly for the digital consumer it is as if the Cambridge Analytica scandal never happened.
However, the danger of predicting the future is to extrapolate current trends into a similar future trajectory. The key difference between Facebook in 2019 and Facebook in 2016 is that the surveillance capitalism underpinning the platform is no longer hidden from view. While mainstream consumers still rely upon the social media giant as a de facto public utility, Facebook can longer expect its users to work for free to deliver it engagement data to monetise with third parties. At some point the value distinction between a privacy-first company like Apple and what Apple CEO Tim Cook identified as the “ data industrial complex”, will become a publicly understood distinction between what you pay if you do not pay up front for your use of a public service. This will result in a two-tier digital class system: those that can afford to do so will be able to maintain digital privacy, and those that either cannot or will not, will be subjected to a blend of targeted advertising and repurposing of their personal engagement data without their ongoing explicit consent.
For now, Facebook has a get-out-of-jail-free card—one that is more lucrative than ever before. Much of its growth has been underpinned by lax regulation in developed markets and willingness to tolerate the ad-supported model in emerging markets. But, as both current market realities are unlikely to remain constants over the next five years, let alone the next 15 years, it will be revealing to see just how effectively and quickly Facebook will adapt to the changing digital zeitgeist.
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