Social media platforms have revolutionized the way we connect and communicate with each other. Facebook, in particular, has become a ubiquitous platform that serves not only as a tool for social interaction but also as a new kind of phonebook of sorts for businesses and their customers.
The Rise of Digital Marketing
As traditional phonebooks like the Yellow Pages have declined in popularity, digital marketing stepped in to fill the void. With over 2 billion active users worldwide and traditionally a much lower advertising cost, Facebook became one of the most effective ways to reach potential customers and clients. Businesses can easily create pages that showcase their services and products, and individuals can use the platform to find and connect with people they know or want to know.
Facebook’s Problems
However, with this increase in popularity comes a rise in advertising costs. As more businesses and individuals turn to Facebook as a way to promote themselves, the competition for attention becomes more intense. Another issue is Apple’s App Tracking Transparency feature on iOS. Apple’s App Tracking Transparency framework requires apps to request permission to track the user and access the device’s advertising identifier. The framework also requires the app to include a purpose string in the system prompt that explains why it would like to track the user. Meta (formerly known as Facebook) has cited ad revenue losses from this feature, which could also be the reason why Facebook ads may not as effective as before. Finally, an issue that many critics are citing is the huge research and development costs that the virtual reality (VR) side of Meta’s business is inflicting upon the company.
All of these things put stress on Meta’s profits. One example of this trend can be seen in the recent announcement by Meta of a new subscription service. The service, which is expected to launch in the coming months, will offer users access to exclusive content, features, and experiences on Facebook and other Meta-owned platforms. This move is seen as a way for Meta to generate more revenue from its users as its user growth stagnates and revenue avenues struggle.
Platforms Can Only Charge So Much
When I first started my career in digital marketing, businesses commonly cited the phone book as a reason why they couldn’t invest more in their online presence. However, as the cost of phone book advertising increased and usage decreased, the overall performance and benefit to the phone book ads ultimately suffered for these businesses. This forced them to diversify their advertising efforts to not only be successful, but to even survive.
Similarly, Facebook historically offered two advantages to businesses: a large user base and affordable advertising costs. Even if a Facebook campaign was less effective than a Paid Search advertisement in terms of click through rate, the low cost justified its use. However, recent trends show that Facebook ads can now rival the cost of Google paid search campaigns, negating Facebook’s key advantage.
Diversifying Is Key
This over-reliance on a single platform, whether it’s phone books or Facebook, can be problematic for businesses. We saw this recently with Etsy and payouts due to the SVB banking situation.
It’s crucial for businesses to diversify their advertising strategies and avoid relying solely on one platform. This can help them reach a wider audience and reduce their dependence on any single platform. This is where McNair Media can help. We are skilled in assisting our clients navigate an over-reliance on a singular platform and diversifying into a platform you control, a website. Websites feed into search engines, voice assistants, and now even AI. Contact us today and we can help you get started!
