You don’t change the name of your company on a whim.
With Facebook, renaming itself to Meta was an important milestone. It was also a hint of things to come. The social media platform has been rupturing lately, mostly due to a policy change at Apple where iPhone users can opt-out of tracking, which has absolutely destroyed Facebook advertising revenue.
Users that cannot be tracked cannot be targeted with ads.
This is worrisome, if your name is Mark Zuckerberg. Another milestone happened just a couple of months ago when user growth finally stalled. That led to a big stock price drop and a lot of head-scratching about what has caused all of the cratering lately. Have users finally wised up? Did Apple burst the bubble? Do we now all hate Facebook? When you have almost 2 billion active users, it’s hard to say the sky is falling, since every Silicon Valley tech giant would love to brag about that kind of dominance. (Twitter only has about 229 million active users.)
Yet, something is amiss. Facebook first launched in 2004 and it has become part of our daily lives. I still chat with friends at bookstores and coffee-shops and ask which apps they use most often, and it’s almost always Facebook.
Many “everyday” users don’t even know why they keep scrolling and liking, they just do. It is part of their routine. Like drinking Pepsi, buying a breakfast sandwich at Wendy’s, and watching the NBA playoffs, we don’t always know why we do things, but when it becomes a habit, revenues soar and then keep on soaring.
Think of any massive company and it’s likely the secret to success is tied to when we do something (or use something) on a routine basis.
My theory (and believe me, I always have one) is that Facebook has started to see habits shifting, and they would know. They not only provide analytics to advertisers about how often we look at posts and what we click on, they use this same data to determine whether the app is successful. They eat their own analytics dog food.
When there’s a slight shift and they don’t see as much constant scrolling and the engagement drops an inch, they know it’s a problem.
Think of it this way. Let’s say Pepsi sees a big drop in sales over a quarter. Okay, that’s not good. When your sales are based on the routines of a mass population and they suddenly stop buying a case of the sugar water after work, you have to react. In the past, Pepsi has invented new flavors and created new advertising campaigns. You could make the case that the great companies of our age, from Apple on down, are great because they react efficiently and thoroughly to market trends and whenever user interest starts to slip. (You could also argue that companies like Apple make great products and that’s the reason they stick around.)
With Meta, the data suggests some waning interest among users. We’ve stepped out of the cave, and we see the sunlight pouring down on the reality of what social media is doing to us. Some of us have realized that Facebook doesn’t really offer a good value proposition, and we know that revealing our interests and scrolling habits to a giant mega-corporation so they can in turn sell that data to the highest bidder is not a great business arrangement. Once again, Meta knows this.
That’s why I’m not exactly thrilled with the new direction of the company. One recent report nailed it squarely, suggesting this is all about “neglecting the real world” and looking at our phones even more than we do now.
Meta is a company run on algorithms. Think of algorithms as the engine that runs the addiction machine. The apps all shift and change constantly to suit our own taste, which keeps us hooked. Guess what? The entire corporation is also about to shift. The algorithm has told them it is time to reinvent itself, to create a metaverse that keeps us hooked (read: using their apps).
I want to believe it is a desire to make compelling products. I want to believe it’s because the metaverse will be wonderful.
But I know better. The more we click the more Meta attracts advertisers, and that is ultimately the goal. I’m sure the shareholders would agree.
Now we get to find out if it is possible to make a great product and generate revenue at the same time, as opposed to just making a new type of addiction machine.