Can anyone challenge Facebook’s dominance in social?

Over the years, Facebook has encountered a number of challenges. A recent survey compiled by media analysis company Freckle in North America found that 46 per cent of people found Facebook to be the least trusted social media site following their involvement in the Cambridge Analytica incident, which is considered one of the biggest data scandals of our time.

Despite this, you may be surprised to hear that Facebook reported a 27 per cent increase in revenue year on year, the majority of which is attributed to advertising growth. The fact is that Facebook is incredibly resilient, and this has allowed them to transcend the traditional definition of a social media network and ultimately become a global marketing powerhouse.

Listen now: In our latest episode of the Inside Marketing podcast, Amy Doody, head of social media at iProspect, sits down with the Inside Marketing team to discuss Facebook's dominance of the social media market.

Some of the main reasons for its success comes down to constant platform upgrades, clever acquisition tactics, and not to mention a good public relations team. While Facebook’s ongoing growth may appear inevitable, nothing is certain. Like any advertising platform, there will always be a host of challenges to overcome.

Competition will always be one of the biggest and most obvious threats to Facebook’s dominance, the existence of another platform that could outperform Facebook’s current capabilities from both a consumer and marketing perspective poses a risk to Facebook’s profits.

Competition

Companies and individuals alike have continued to challenge the company. Jason Calacanis, a successful tech entrepreneur, went as far as launching a competition called the “Open Book Challenge” in a bid to replace Facebook with a new platform altogether.

Large tech giants have made attempts at releasing their own versions of social networking (such as Google+) but have ultimately failed to penetrate the market. WeChat, the largest social network in China, has the potential to challenge Facebook if it were to successfully infiltrate other markets but as its focus is on China, it is not making big gains in the United States or the European Union. To date, no person or company has come close to successfully emulating Facebook.

While Google, Amazon, LinkedIn and other large tech companies don’t directly mimic Facebook’s social offering, they still pose a threat as they provide social, media and communication services which engage users online. Each platform also offers its own unique and powerful advertising capabilities that compete with Facebook’s main source of income: ad revenue. There is a multitude of factors Facebook needs to consider in order to be able to compete effectively, however, there will always be aspects that are beyond its control such as government regulation.

One of the key factors which have enabled Facebook to remain a market leader is its aggressive acquisition strategy. Some of Facebook’s most high-profile acquisitions include Instagram and WhatsApp, which they now plan to merge with Facebook Messenger to streamline communication and offer more secure messaging on all platforms. As private messaging, small groups and ephemeral messaging are the fastest growing areas of online communication, this is sure to strengthen its product offering.

Facebook’s ability to adapt to market scrutiny and pressures has been another key factor in its success. In recent years, awareness of user habits and the impact social media has on mental health has prompted many to kickstart their digital detox, a term officially added to the Oxford English Dictionary in 2013.

Facebook acknowledges that passive consumption of social media may not have a positive impact on mental health but argues engagement could improve wellbeing. The company vows to continue to invest in this area as it adheres to social pressures and have already made advancements in its mental health efforts, from an artificial intelligence-based suicidal post-detection tool to promoting Facebook groups for mental health.

Today, users also demand greater privacy, security and transparency, all of which are big areas Facebook has invested in. It’s no surprise that the term “cookiepocalypse” has once again gained momentum with Google announcing its plan to eliminate third-party cookies by 2022 as it evolves to meet increasing demands for user privacy. While this may be alarming to advertisers, companies such as Facebook will continue to flourish as they gain an advantage in the ad market with access to first-party data.

Facebook also continues to test and expand its current offering which is vital in order to remain relevant. One of the more recent examples of this is its launch of Facebook Dating in 2019 which promises the user a more holistic view of their potential match in comparison to other available dating apps.

As we look to the future, we don’t see Facebook’s dominance being challenged as it continues to quickly adapt to market and consumer changes as well as disruptive technologies. In 2012, it was criticised for not being “built for mobile” at the time of their flotation and within 12 months had turned that around as the company shifted its entire focus on mobile. In recent years, Facebook has made large investments in ecommerce to test and diversify revenue streams as it also looks to launch its own cryptocurrency.

Brands and consumers 

The social media giant also offers many benefits to consumers and businesses alike. It offers great advertising solutions to brands with many aspects making it more effective and attractive than other means of marketing. Facebook has proved to help drive both online and offline sales, increase unique website visits, lower costs, increase brand awareness and drive reoccurring business.

Facebook offers one of the most targeted forms of advertising and is also one of the cheapest, making it extremely cost effective. The ability to measure the direct impact of campaigns in real time enables fast learnings which brands can use to their advantage. Facebook also goes beyond its own borders with the ability to integrate and boost the overall performance of other channels.

Facebook is ultimately so much more than just a means to stay connected. For advertisers and brands, it is used as an outlet to communicate, build communities, drive sales, shape opinions and ultimately grow businesses, making it an integral part of any marketing strategy as it can successfully infiltrate every part of the funnel from awareness to retention, often outperforming more predictable means of advertising.

There is yet to be another platform that can offer the same benefits to users and advertisers. While there may not be a looming threat of a similar platform in the immediate future, there will continue to be hurdles in which Facebook will need to overcome in order to maintain global dominance in the long run.

[ irishtimes.com/insidemarketing ]

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