Digital Trend Alert
Facebook Trends: 2020 - 2026
by Carol Ingley
President, Media Mogul Enterprises
Week of September 9 through Week of October 7, 2019
Digital Trends: privacy, global connectivity, artificial intelligence, blockchain technology, virtual reality, augmented reality, video
Future of Facebook. Facebook’s future - 2020 through 2026 - lies in leveraging trends for its large user base. It is reliant on those users to continue using its main services: Facebook, Instagram and WhatsApp. Now that they have such a large subscriber base, the big issue is retention.
Facebook has had a tumultuous few years. There have been data breaches. Mark Zuckerberg has testified in front of Congress. He has even extended an olive branch of sorts, asking governments to help control the internet in the following four areas: harmful content, election integrity, privacy and data portability.
Whether any type of government regulation happens in the near future, what is clear is that Facebook is a massively successful company and it shows no signs of stopping. Indeed, the intention seems to be to become even more massive. Its market capitalization puts it in the top 10 companies in the world. From an annual revenue perspective, its ranking is significantly lower, currently #57 on the Fortune 500 list.
Early in 2019, Facebook announced its plans to integrate its three messaging services while keeping them stand-alone: Facebook Messenger, Instagram and WhatsApp. Facebook has said this will be a long process, according to the BBC. Over the past few years, Facebook has launched Facebook Watch and Facebook Live, both video services. Significantly, video ads have become a big revenue producer for the company.
User Numbers. And here are the numbers. According to USA Today, as of January 25, 2019, “Facebook has about 1.5 billion daily active users, while WhatsApp, the world’s most popular messaging app, has 1.5 billion users. About 500 million use Instagram daily; 800 million use it at least once a month.”
Five Key Trend Directions.There are five key trend directions that Facebook is involved in, examined here, in order to grow its business over the next 5 to 7 years: 1) Shift to privacy; 2) Improve global internet connectivity; 3) Incorporate artificial intelligence (AI) and blockchain technology; 4) Lead in virtual and augmented reality; and 5) Leverage video.
1) Shift to Privacy. According to the publication recode, Mark Zuckerberg believes that the future of Facebook is private messaging. In short, Zuckerberg thinks that privacy platforms will become even more important than the current open platforms. It’s a dramatic shift in thinking and priorities. Putting the privacy of the individual first is not how Facebook is perceived or even works today.
Zuckerberg sees six areas in this shift to privacy: private interactions, encryption, reducing permanence, safety, interoperability and secure data storage.
There may be another reason, other than providing the privacy many Facebook users want, that the head of Facebook is now so keen on privacy. And that is its entry into digital wallets. “To earn people’s trust, we are going to have to make strong commitments on privacy,” says David Marcus, the leader of Facebook’s new digital wallet division, Calibra. And it may not be just the privacy of the digital wallet that he is referring to but rather an overall view that people will have about Facebook and trust. That means that privacy will have to become the operative word at Facebook in order for the company to move into digital wallets.
2) Improve Global Internet Connectivity. Why are so many people in the world without the internet? The number has been estimated to be 4 billion. The answer to the question is: no company has found a way to serve those without internet at a price they can afford. Facebook has long noted this need and long desired to be that company that provides this need.
A few years ago, Facebook targeted the country India as a venue to offer its internet service via Internet.org, along with its Facebook Basics package. The overall plan was to connect millions of Indians to the internet. The caveat was that they would be using Facebook Basics with that internet connection. And that’s where the plan went wrong. India said no. It didn’t want the package that Facebook was offering given the restrictions. In short, it was not a marketable business model.
This area of getting more of the world online could be huge for Facebook if they develop the right business model.
3) Incorporate Artificial Intelligence (AI) and Blockchain Technology. Artificial intelligence: There are some that say that the future of social media depends on artificial intelligence. If that is the case, Facebook will need to lead, innovate and succeed in this area. There are mountains of data in these social media empires such as Facebook, LinkedIN and Twitter – knowing how to utilize that data may make or break companies. The majority of the data is unstructured – this means it is more difficult to analyze and find trends. AI algorithms, however, can monitor and analyze large amounts of this kind of unstructured data. Still, asking the right questions will be key to success.
Blockchain technology: Facebook announced a new team dedicated to blockchain technology in 2018. David Marcus is the leader of Facebook’s new digital wallet division, Calibra.
If you think Facebook has had big plans with its social media platforms, its entry into blockchain is an even bigger plan. Blockchain technology provides the building blocks for the networks supporting cryptocurrency. Crytocurrency is a digital currency that uses encryption and operates independently of a central bank.
Calibra, Facebook’s digital wallet, would use cryptocurrency available from Libra, an independent cryptocurrency association. The plan: Facebook is part of Libra as an association member but there are other members as well. So far, Facebook has been a leader in Libra’s development or maybe one should say the leader. According to Facebook’s David Marcus in speaking about Libra, “Technically it's just Facebook's project right now. So far we've been funding it all.”
4) Lead in Virtual and Augmented Reality. Virtual reality (VR) is a three-dimensional environment that a person can interact with. In short, it gives the user the feeling of being in that environment. What is necessary is immersion into this environment and for that, VR headsets have come into being. One of the early leaders in VR was Oculus VR, a virtual reality hardware and software company. Facebook acquired Oculus VR in March 2014.
What’s Facebook’s goal in VR? It’s quite clearly stated by Mark Zuckerberg. He has his eyes on a billion consumer headsets. That’s a big and bold vision of the size of the slice of the VR market pie that Zuckerberg is keen to have. The headset technology is not cheap and yet to reach many consumers, it will have to be affordable. That appears to be the direction Facebook is headed: cheaper headsets.
The reality is that, at this stage of the VR market, the path forward is not clear. Is the real market high end or low end? No one knows. But it may be that the VR technology itself needs to improve before masses are drawn to it. My own experience? I felt dizzy using the headset – otherwise it was great fun. In short, there may be many hurdles to overcome.
Augmented reality (AR) is very different from virtual reality. AR is to take the real world and augment it with computer-generated videos, images and other computer data. Facebook has also stated that it is committed to this area. Social media seems the perfect venue for AR development.
5) Leverage Video. Mark Zuckerberg said in 2017, “I see video as a mega trend, same order as mobile.” Two video services currently offered by Facebook include Facebook Watch and Facebook Live.
Facebook Watch is a video-on-demand (VOD) service that was launched in August 2017. Facebook Watch offers both short videos and long videos. Its big competitor is YouTube among others. Facebook reported in June 2019 that 140 million people per day spent at least one minute in Watch, with 720 million viewers per month.
Facebook Live, launched in April 2016, is a live streaming service that Facebook offers. This is what Facebook has to say about it: “Live is the best way to interact with viewers in real time. Field their burning questions, hear what’s on their mind and check out their Live Reactions to gauge how your broadcast is going.” Since it offers a way to connect with followers instantly, it is a significant growth area for Facebook.
Summary. With its lead in billions of users, Facebook is in a unique position. A successful product or service launch to those billions is a tidy business unto itself. If this product or service disrupts a major industry (such as the banking industry), Facebook stands to become so powerful it is almost beyond imagining. The biggest issue Facebook now faces is trust. They must reverse damage that’s been done in order for them to have reached their current level of success, particularly in the area of privacy. Facebook now has grand plans in many different directions. Those directions include privacy, global connectivity, artificial intelligence, blockchain technology, virtual reality, augmented reality and video among others. Succeeding big in any one of these areas will be an enormous challenge.
Digital Trend Alert