Facebook’s shift to privacy is just a play on emerging market dynamics
Facebook will likely continue to push the boundaries of private messaging for the next evolution of advertising on the platform.
Mark Zuckerberg recently announced that Facebook’s family of apps will be pivoting to privacy and focusing on enabling private, fully encrypted messaging in his seminal 3,200-word pledge for change. Interestingly, this announcement comes a year after the Cambridge Analytica scandal was first reported by the media. At first glance, skeptical critics argue that nothing will change. They’ll say that Facebook is here to monetize its experience no matter how Zuckerberg changes up the platform’s experience. Moving towards privacy-focused communications may seem like a backward play for most marketers. But, it’s not exactly a defensive move given that ephemeral messaging is already used on Instagram and end-to-end encryption is deployed on WhatsApp. The changes are coming hard and fast. And, they show that Zuckerberg is offering up a smarter, more nuanced perspective to Facebook in a new age of privatization.
The platform is at an odd inflection point when it comes to communication dynamics. Zuckerberg says people are morphing from “town square” public sharing to more secure, privacy-protective “living room” sharing within intimate circles. Zuckerberg’s post also suggests that merging some of the technical infrastructure between platforms (which make it possible to send a message from someone on Instagram using Facebook Messenger) will lead to more meaningful communications and convenience. In other words, users are growing up.
Ease of use aside, Zuckerberg is addressing two points: a major flaw in the system and the simmering concerns over user engagement, ad targeting and user privacy. Betting on private messaging signals an evolutionary step in how the platform will reach users and shows us how he is working to balance targeted advertising and privacy in the face of a deepening public debate over data concerns. While many are blaming platform abuse for Facebook’s recent shift and/or slowing user growth, a growing body of research suggests Zuckerberg’s reasons are deeper and more strategic.
Facebook is seemingly in great health. Its user engagement is holding steady, which indicates – at least for now – that users are getting about the same amount of “meaningful interactions” and value out of being a Facebook user as they were before any of the latest changes by the company. Also, Facebook’s growth remains steady even as it takes proactive steps to protect its content and data. In 2019, the social media giant expects to double the number of people working on content security. And, it’s not exactly like the now defunct #DeleteFacebook movement has really led to any mass user exodus.
The latest quarterly results suggest ad spend on Facebook remains bullish (more than $55 billion in 2018). And, crucially for Facebook, this isn’t going to slow down anytime soon. Overall, ad spend will shift markedly this year in response to larger ad-market dynamics, such as the increase in aging consumers and the boom in social video. Little-seen data shows Facebook is seeing increased gains from the 55-plus segment, while younger users are simply shifting communication preferences to the family of Facebook-owned apps, namely Instagram. Video (particularly mobile) has taken center stage on social platforms that were once text- or photo-centric. Younger users are spending increasing amounts of time watching videos and sharing clips that amplify brand messages. Facebook users aren’t floundering. They are simply shifting, which goes to show that in the long term, advertising revenue will remain sustainable. All in all, it’s all about seeing around corners.
Zuckerberg has repeatedly stated that Facebook doesn’t read the content of your messages to target advertising, which suggests it’s irrelevant whether the messages are encrypted or not. So, can highly personalized targeting and user privacy coexist? This is absolutely doable. But it will require Facebook to greatly improve its commitment to educating consumers using small-scale private messaging on data controls and how the advertising experience will evolve.
Encrypted interoperability will challenge Facebook’s behavioral advertising model, but not eliminate it. Ad content is actually more profitable when its personalized with customer’s knowledge so it’s expected that Facebook will likely offer more ways to provide services to customers in unique, secure ways. As far as advertisers go, they are also going to get less experimental and more intentional. Instead of trial-and-erroring multiple targeting elements to see how they work across disparate user profiles, advertisers will likely fine tune one or two methods to better target complete data profiles. We’ll also see advertising move beyond personalization and towards “individualization,” which means messaging will speak less to who you are on a demographic level and more to social listening and community engagement. The net effect: better ad models allowing them to connect to smaller networks of grouped users.
Despite the dissatisfaction with Facebook’s current safety measures, users and advertisers aren’t leaving the platform. Both understand that data privacy isn’t an issue relegated to Facebook alone, but one that has industry-wide implications. Facebook will likely continue to push the boundaries of what’s possible with private messaging before developing community standards that will put its users feel at ease. Ultimately, Facebook is a utility built on connections and people are hesitant to let go of this connectivity. In the end, Facebook continues to evolve and bring in more communications to strengthen its core experience. It’s just not so shocking to see Zuckerberg test out a new approach. One that will work.
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