Is Monetization Killing Facebook?

by Jennifer Beever

Facebook MonetizationUsage of Facebook on desktops has declined in recent months. I think it’s due to Facebook’s heavy emphasis on monetizing the social platform for advertising.

Don’t get me wrong. As a marketer, the concept of advertising on Facebook, where the platform has access to a treasure trove of demographic and psychographic information about its users, is like gold. It seems like a marketer’s dream.

But as a Facebook user (I like to stay in touch and share information with family, friends and classmates), it is creepy to know that every “Like” I give to a company, video, song or news update on Facebook is recorded, as well as all the details about my interests in my profile and what I do online are part of that Facebook marketing treasure trove, being shared with advertisers and perhaps available to others.

Add to that Facebook’s many changes to privacy settings so that we users have to learn and re-learn as they change. It all makes for an uncomfortable feeling.

Apparently, the specific decline is with younger people and on desktops, not mobile devices – according to Henry Blodget of Business Insider, “The declines are primarily attributed to age groups 12-17 and 18-24, which declined 42% and 25%, respectively.” This demographic is very oriented to mobile. In addition, many of them are being admonished by parents and by career advisors to limit social sharing on Facebook – which seems to be the platform on which many get themselves in trouble.

So, is that why usage of Facebook is declining – its users feel uncomfortable with the sale of their personal information to advertisers? Is it because (as I wondered recently) more people are working and can’t spend time on Facebook in their office? Or, is it because there are easier, more mobile ways to share, such as Instagram (which Facebook owns – by the way).

Instagram was founded only a few years ago, and it’s usage has already exploded to 100 million registered users (one-tenth of Facebook’s global users). Instagram has yet to be ‘monetized,’ but given its emphasis on visual images, it’s not hard to imagine that it could eventually be an effective advertising medium.

Facebook Has A Big New Problem You Need To Worry About, Henry Blodget, Business Insider

I think the biggest reason is the first answer – that when Facebook focused on advertising monetization and went public, what was a social media darling became tainted in the minds of its users. Older generations value online privacy, and younger generations are learning to – and both are creeped out by Facebook’s increased focus on advertising. Just yesterday Facebook acquired another advertising tool, making a disclaimer as they did so, reports Josh Contine of Techcrunch:

This afternoon I spoke to Brian Boland, head of monetization product marketing at Facebook, and Dave O’Hara, the CFO of Microsoft’s online services. Boland started by bluntly denying speculation, saying “Why we’re doing this is not to launch an ad network, and why we did do this is to improve measurement. We heard loud and clear from advertisers that they want to understand multi-touch attribution instead of just looking at the last click.”

Below are links to the good articles I read in researching this post. What do you think? Did monetization kill Facebook? Other social media platforms?

Facebook Confirms It Will Acquire Atlas Advertiser Suite From Microsoft To Close The Ad Spend Loop by Josh Contine, Techcrunch (February 2013)

Facebook Usage Is On The Decline…So Who’s Next? [Infographic] by Diana Adams, Editor, Bit Rebels (December 2012)

ANALYST: Facebook Has A Big New Problem You Need To Worry About by Henry Blodget, Business Insider (September 2012)

Facebook (FB) Stock Woes: FB Launches Real-Time Advertising Tool to Stop Decline  by Alex Marin, policymic (Summer 2012)

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