We were reading today some user complaints about Facebook's (yet another) redesign, this time an interface shift that pushes less-noteworthy friend updates to a "Ticker" in the top right of the Facebook page. What was Facebook thinking? Trying to copy Twitter? Trying to fend off Google+?
Actually, it's as simple as making more money.
Facebook has been enormously successful pulling in advertising dollars; the social network made $2 billion in revenue in 2010, and is forecasted by eMarketer to surpass $4.2 billion in revenue in 2011. Because Facebook ads are sold both on a CPM (cost per thousand impression) and CPC (cost per click performance) basis, to earn more ad revenue, Facebook must increase both impressions and the number of times its users click on, or respond to, the ads. It needs to boost both page views and response.
While in the past Facebook has simply grown its way to more page views, now with 750 million users, the customer base may be capping -- so Facebook's redesign cleverly encourages current users to click around more near ads...
1. The Ticker is placed at right, just above the Facebook advertising slots. Previously, users interested in only their friends' updates could scan solely down the center of the page, ignoring most ads, but now your eyes are drawn to the right to catch the Twitter-like stream of secondary updates from friends as well. You are forced to look in the direction of advertising.
2. The Timeline, another Facebook innovation, provides an ego-boosting look at yourself and everything you've done before. Of course, you're probably curious as to what it holds, and once you see it, you'll want to spend time updating it. Facebook could have more accurately labeled the Timeline the Come Back Infrequent Users Motivational Page; it's a hook to increase share of customer and regain current registered users who now spend little time at the network.
3. Third, and this is most important, all these inclusions are likely to increase page visits per day -- you now have more things to update (Timeline) and more friend updates to respond to (Ticker). More page views equals more ad inventory. More ad inventory equals more impressions and clicks.
It's a clever gambit, really, launching a redesign professed to improve the user experience, when what it really does is improve Facebook advertising revenue. If the UI shifts attract 10% more advertising, next year Facebook makes an incremental, cool $420 million.
4 comments:
Well, you're kind of pointing to the desperation of facebook's position. How doe they grow? How they better monetize their user base? I'm not sure they have real answers. Their revenue per visit is not that good when compared with some other powerhouses.
Yes, from one point of view, FB is a drop compared to Google's waterfall. But it remains a giant in display and in social.
FB has problems with growth, and the only real way to gain greater share of marketers' dollars is to improve performance. This is always tricky; running more ads diminishes the user experience and clutters communications, leading to diminished ad response.
I think in this round FB has struck the right balance, launching perceived user benefits while also forcing users to see more ads as they click around.
Not sure how much further FB can take this. One additional growth area is mobile; FB has one of the leading mobile apps, more than 250M mobile users, yet doesn't run ads there. Surely it could find a way to make that work as well, likely in the next round of "improvements."
Thanks for stopping by, Bud.
I am gleefully adding Firefox blocks all Facebook Ads. So the ticker is really just annoying to me. And when I crunch the Unique Monthly Visits, Total Visits, and all their activity such as time spent etc on a per user basis the amount of activity is dropping like a brick. I think if they never took the investor money like they did, or IPOed sooner they wouldn't be so desperate.
However the people on facebook ARE the source of revenue for the advertisers that make money for facebook. If the people using facebook get frustrated and disgusted (which they are) and leave, then facebook's revenue will go down. If a website is not user friendly, it will not be of much use. I hope they fall flat on their face on this one and people continue to complain or leave. Maybe they will eventually get the message.
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