Participation equates profit. Most South African users don’t need figures thrown at them to realize that their Facebook experience has devolved.
The first troubles began with Groups and Pages approximately 3 years ago. Music is a good example as bands were the quickest to embrace FB which, in turn, attracted the My Space crowd who aimed to gain as many “Friends” as possible so as to win an unseen yet all-important popularity contest. Signing up to many exuberant bands correlated to receiving too many newsletters and event invites. The latter is particularly significant. Initially, given the options of Attending, Maybe and No, most answered truthfully. Overtime, users started pressing Maybe even if they weren’t attending so as not to maintain “good relations” with their hundreds (even thousands) of “friends”. Now, they simply ignore (and refrain from joining new groups). An example was a Group that I managed for a nightclub 2 years ago. At it’s peek, it had 1380 members. When the venue closed down 6 months ago, traditionally a big draw card for a party, only 8 people confirmed that they were Attending. What happened to cause such a radical drop in interactivity? Smartphones.
As the reading of website content was replaced by social media, so instant messaging, as an entity rather than a component, is replacing social media. Even if the content has no meaningful substance, the trend has been for messages to be as short as possible (with less grammar and incorrect spelling, a degradation matching attention span.) Initially, Facebook’s instant chat was the most laudable application. Highly convenient, it encouraged interaction but within Facebook’s bigger framework of groups, galleries, music etc. MXIT was opposition but in a limited context until people skipped using their PCs in lieu of instant messaging via Facebook on their cellphones. Some may be addicted to Farmville or Texas Hold ‘Em but, overall, less attention is being paid to the broader Facebook which results in less attention to adverts. Less interaction (less “social” in “social media”) means less profit!
Google realized a market niche for more specific advertizing when it acknowledged the decline of banner ads. Facebook hasn’t. For example, if you do a Google search for “accommodation in Knysna”, the top results would be relevant and clickable even though they are paid for. But if you are wanting to chat to a FB friend about going to the beach, what advert could possibly appear in the sidebar as relevant and screamingly clickable? Consequently, Facebook advertising campaigns have clickthrough rates as low as 0.04% (even less, 2 weeks into the campaign). Groupon, the biggest ad start-up the past 3 years, and FB advertizer, ran $146.5 million into the red in the first quarter of 2011.
Read Part 3 here.