Social network usage is starting to drop

2014 has been a great year for social media marketing. A number of our companies have enjoyed great success advertising on Facebook and they’re not alone. Facebook is forecasting Q4 revenues of $3.6-3.8bn, up 40-47% on the year ago quarter. Yet, paradoxically in some markets social network usage is starting to drop:

weekly social network access

As you can see from this chart it is in the US, China, and particularly the UK that consumers are turning away from social networks, and it’s a fair bet that the trend in these countries will be seen more widely next year.

The best guess is that users are shunning Facebook et al for messaging apps, which goes a long way to explaining Facebook’s $19 billion purchase of WhatsApp earlier this year.

This means that we can expect Facebook advertising to become more competitive next year. Buoyed by the success stories from 2014 bigger brands and bigger budgets will come to the platform whilst inventory remains the same or declines, at least in the UK or US. That means higher prices. We’ve seen the same trend play out on Google over the last few years where paid search in many categories is now too expensive for startups.

As this plays out entrepreneurs will be forced to look at newer platforms and one of the interesting things will be whether messaging apps emerge as an interesting advertising category.

  • Yele Bademosi

    “Social Networking” as an activity is still immensely popular but this trend can be attributed to people spending more time using social network apps rather than their websites. People are with their phones 24/7 so check these apps more frequently in shorter intervals instead of visiting the websites after work or school depending on the demographic.

    Facebook will love this trend – in July 2014 Facebook reports showed Mobile ads (especially app installs) were responsible for 62% of their total revenue, think this % will grow in 2015.

    Some more posts on this trend –
    – Chris Dixon’s post on the decline of mobile web: http://cdixon.org/2014/04/07/the-decline-of-the-mobile-web/
    – In-depth post on mobile app installs: http://techcrunch.com/2014/11/30/like-advertising-a-needle-in-a-haystack/

  • http://www.theequitykicker.com brisbourne

    I think these stats include mobile social networking alongside desktop.

  • Yele Bademosi

    I think you’re right. I was able to find the full report and although the question they asked the participants was a little ambiguous – my response would have been to social networking as a whole. Insightful post as always 🙂

    Also this quote from the report may be of personal interest to you – “At almost £2000 per person, the UK had the most valuable e-commerce market among our comparator countries in 2013”

  • http://www.theequitykicker.com brisbourne

    🙂 It’s not a total coincidence that we’re doing ecommerce in the UK…

  • Yele Bademosi

    haha! lovely response 😀

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