6 Reasons Why Facebook Continues to Succeed
Is Facebook the most resilient brand in the world? It sure seems that way. Here is a business that has weathered one public relations storm after another in recent years, and yet the global business is getting stronger than ever. In the past couple of years alone, we’ve seen Facebook experience some serious threats, such as:
- Widespread criticism that the platform tolerates hate groups.
- Accusations that Facebook has been used as a tool for malicious parties to interfere with the election of public officials in the United States and internationally.
- Anger over Facebook’s failure to contain egregious breaches of user privacy.
- Speculation that Facebook’s internal culture is imploding.
- Anxiety that Facebook exerts an unfair advantage over its competition and needs to be broken up.
What have I missed?
These, and many other concerns, have resulted in some concrete actions that normally would cause some serious problems for a business, such as:
- An advertising boycott by a number of powerful brands in July.
- CEO Mark Zuckerberg being hauled into public hearings to face a public grilling by Congress, most recently the week of July 27 over Facebook’s competitive practices.
And yet, in Facebook’s most recent quarterly earnings report, the world’s largest social media network reported:
- $18.7 billion in revenue, up from $16.9 billion a year earlier and above analysts’ expectations of $17.34 billion.
- Profit for the second quarter nearly doubling to $5.18 billion, or $1.80 a share, exceeding Wall Street estimates.
- An increase in monthly active users to 2.7 billion, from 2.6 billion in the first quarter. More than three billion people now use at least one of Facebook’s products on a monthly basis.
Now look at Facebook’s stock price, rising year after year:
Facebook’s resilience has prompted many to ask, Why? Well, I can think of a number of reasons:
- Clearly, the negative PR does not speak for everyone.
- Facebook continues to enjoy an advantage of being the first major social media network to break through globally. When you gain a foothold on a market, it’s awfully hard for anyone to dislodge you.
- Facebook has stayed true to a fundamental brand promise of connecting people. If you want to stay connected with Aunt Mary in Topeka or your old college buddy Jim in Montana, Facebook delivers.
- It’s not the only social media network fraught with controversy over free speech versus fringe activities. Every major platform – TikTok, Twitter, YouTube, and others – faces the same fundamental challenge Facebook does, and no one has anywhere near a perfect solution. Investors and advertisers understand this reality, and so long as social media platforms appeal to them, Facebook does, too.
- Facebook continues to make smart moves to expand its global reach, a recent example being its investment into Jio Platforms of India.
- The company is delivering on its 10-year growth plan unveiled in 2016, including continued investments in virtual reality.
Reason 6 above is especially important. Investors like to see businesses create a compelling growth plan and stick to it. Facebook has never lost sight of its own aspirations to grow globally and to use technology to connect people. As a result:
- Facebook attracts more investors.
- Those investors fuel the company’s expansion.
- The company’s expansion attracts more users.
- More users attract more advertisers. And advertisers are crucial to Facebook’s future.
My advice to advertisers:
- If Facebook is delivering the audiences you want, continue to rely on Facebook as a crucial element of your game plan. Capitalize on new tools to reach your audience, such as Facebook’s recently unveiled ways to connect people and businesses on WhatsApp. If you work with an agency, ask them about how they’re using these tools to help you.
- Be patient, and don’t let negative PR distract you (but if you’ve stuck with Facebook thus far, you probably know that already).
- As with all social networks, assess your own tolerance for the risk versus reward of having a presence on Facebook. As I blogged recently, being on social media presents the possibility that your ads and organic content will appear alongside questionable content. At the same time, being on social also means benefitting from the surge in traffic on social media occurring in 2020. Bottom line: be vigilant (and your agency partner, if you have one, should be vigilant, too).
- Keep a close watch on all the news affecting Facebook, especially Facebook’s ongoing issues with Congress. It’s important to understand the potential changes that legislation could have on Facebook. Being aware is always a good course of action.
- Get comfortable living with the wild card in the deck: the effect of the COVID-19 pandemic. The biggest impact the pandemic may have on Facebook is fluctuating advertising revenues from businesses looking for ways to reduce their ad spend as they react to uncertain economic conditions. But one thing is clear: the Facebook community itself is only getting bigger, and it probably will as people increase their usage of online platforms amid spikes in COVID-19 rates.
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Photo by Austin Distel on Unsplash