Less Facebook users = greater ad costs

Posted: 2018-02-15 03:18:47


Facebook has been working hard to change its News Feed experience for users. CEO Mark Zuckerberg has said he wants to improve people's well-being and society overall.

And it seems to be working. The social media platform reported a drop in user numbers and usage time – a change Zuckerberg said had been expected.

Zuckerberg also recently revealed the company had seen a 20% increase in net income to £10.5 billion last year.

Having fewer users, but more revenue is due to the higher cost of adverts on the platform. The average price of an ad increased by 43% over Q4 last year, while the number of ad impressions increased by just 4%. For marketers, reaching Facebook users is becoming more challenging – and more expensive.

Zuckerberg is keen to point out that this growing price tag means better quality experiences for users. "When you care about something, you're willing to see ads to experience it," he explained. Focusing on meaningful social interactions instead of viral video that's viewed passively means more quality connections and conversations.

Facebook claims that the changes already implemented reduced the time spent on the site by 5% (or 50 million hours a day) over the last quarter of 2017.

We can expect engagement levels to continue fluctuating with more changes on the horizon. Facebook has already announced it will be focusing on: greater priority for trusted, quality content; reducing the volume of fake news and hate speech on the platform; moving emphasis away from the News Feed; and placing more emphasis on Watch (its premium video service) and Stories (its Snapchat-style photo and video collections that disappear after 24 hours).

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