Following the greatest single-day stock drop in recorded history, Facebook CEO Mark Zuckerberg intends to shift the company’s focus to growing short-form video.

 

Facebook growth that had been on a seemingly perpetual upward trend slipped at the end of last year, with the number of people using the social network daily declining. Facebook’s parent firm Meta on Thursday plunged over $200 billion in stock value – comparable to the size of New Zealand’s economy – after results that raised doubts about the troubled social media giant’s future.

 

A few reasons why it happened:

  • Facebook growth that had been on a seemingly perpetual upward trend slipped at the end of last year, with the number of people using the social network daily declining. Meta executives warned of increased competition, particularly from video star TikTok as well as messaging services such as Telegram and Slack.

 

  • Meta executives told analysts that Facebook’s ad-targeting efficiency is being undermined by a change Apple implemented to the software running iPhones. In the update of iOS, Apple required application publishers to ask permission before collecting data, much to the regret of companies like Meta that rely on it for ad targeting.

 

  • As iPhone users opt-out of sharing data for targeting ads in Facebook apps, marketing messages become less precisely targeted and thus less profitable. “We believe the impact of iOS, overall, as a headwind on our business in 2022 is on the order of $10 billion,” Meta chief financial officer David Wehner said on an earnings call. “So, that is a pretty significant headwind for our business.”

 

What Does This Mean For Facebook?

  • Unable to fix its advertising problem, Facebook instead sets its sights on tackling the TikTok problem.
    Facebook will take on TikTok by building up short-form video as its main draw. The firm is making a priority of investing in its Reels short-form video feature as well as apps such as WhatsApp and Instagram to stay in tune with users. That means spending big on services that are harder to make money from than the Facebook social network with its digital ad machine.

 

  • As Meta looks to make a “transformation” to better compete with the likes of TikTok, a hit with younger users, regulators in the US and elsewhere have vowed to curb its power. A federal judge in January ruled that US regulators’ re-worked anti-trust case against Facebook can go ahead, saying the complaint was more robust and detailed than the version denied in 2021.

 

  • The US Federal Trade Commission has alleged Meta holds an illegal monopoly by acquiring potential competitors that it now owns like Instagram and WhatsApp. The lawsuit, which could take years to go through the courts without a settlement, called for the “divestiture of assets,” including WhatsApp and Instagram, to restore competition.

 

What Does This Mean For Marketers?

  • The writing on the wall indicates that video is the future of social media marketing.
    TikTok is thriving, Instagram has prioritized video for over a year, and Facebook is now pivoting to video.

 

  • Social media users have made it loud and clear they want to go where they’re being super-served with video content.
    Now it’s the job of social media marketers to meet the demand.

 

  • If you’re not keeping up with the latest video trends, you need to get on that as well.
    A combination of text and well-crafted images used to be enough to captivate an audience’s attention on social media.
    Now it’s almost a necessity to add video into the mix.

 

  • If video editing and production isn’t already part of your skillset, it certainly should be.