This is a guest post by Alex Peiniger, CEO and cofounder of social media analytics web service quintly.
It’s been an exciting year for Facebook, from the introduction of its new ad formats, to its expansion into social gifting, to being the most watched IPO of the sector. The social networking giant now counts over 1 billion users on its platform, but the question remains — especially following its IPO and initial stock market performance — how does Facebook monetize its sizable consumer base? 2013 is the year Facebook grows up: brands are shifting toward deeper KPIs to measure fan engagement, while Facebook itself has either just launched or is set to release new features that will help advertisers make the most out of the platform.
Here are predictions for 2013 on what will matter to brands on Facebook in the coming year.
1. Facebook Metrics Will Shift To Interaction-Driven KPIs
Facebook metrics are growing up. In the past, size mattered — that is the size of your Facebook fan count. But what we’re seeing is more and more of our clients are shifting their focus away from superficial metrics like fan counts to more interaction driven KPIs such as People Talking About This, interaction rates and response times. As Facebook continuously improves the ways for page administrators to reach the right audience for their content, it’s far more important to reach fans via News Feed and to engage with them, than to simply count that someone Liked your brand. From discussions with our clients, we are also seeing these KPIs going into internal reporting with C-level management, who are demanding more from social media campaigns. We expect that 2013 will finally be the breakthrough year where we stop talking about fan numbers and brands really start dissecting metrics that delve into a fan’s interaction with a brand.
2. Showdown with Google: Facebook Ads Everywhere as Ads Expand to the Whole Internet, the Mobile Web and Mobile Apps
Facebook’s IPO put the pressure on the social net to find new and better ways to monetize its incredibly large user base, with Facebook pumping out lots of new ad formats, especially in the mobile area. One very interesting addition was the launch of Facebook Exchange, which allows advertisers highly accurate targeting, retargeting and even search ads. This is clearly a move forward for the final advertising battle between Google and Facebook in 2013. But that’s not all. In past weeks, the rumors have been flying thick and fast that Facebook is in talks to buy Microsoft’s Atlas ad server. This could be the long awaited step that Facebook takes to build its ultimate ad network that will let consumers see Facebook ads all over the Internet. It could work similar to Google Adwords/Adsense, but with clearly outstanding advantages of the highly accurate targeting options. And it’s not only the web, Facebook has also begun to build a mobile ad network that will show ads based on the user data across mobile apps and mobile websites.
3. One Billion And Counting: Who Said Anything About Facebook Fatigue?
This year Facebook cracked the milestone of one billion users, a number that seems unbelievable enough to some that they’ve begun to doubt the truth of this figure. Others think Facebook user fatigue is spreading and that users will increasingly turn their back on the social network. But this is contradicted by studies and surveys, such as NBCUniversal’s Integrated Media’s new edition of The Curve Rep, which shows how deeply people are connected to the network and how this won’t change in the next year. In fact, our Facebook country stats point to the same thing with user growth as strong as ever at the end of 2012. We are very confident that the number of users will continue to grow in 2013, with at least 1.2 billion total users by year-end.
4. Facebook Adjusts News Feed Moving Toward Interest Lists and Closer in Concept to Google+
The Facebook News Feed and EdgeRank algorithm were under constant criticism this year. Page owners complained that they don’t get enough organic reach with their posts and that Facebook forces them to buy ads instead. While analysts have determined that the organic reach of pages has dropped, user engagement with posts has actually gone up. As a quasi-response, Facebook introduced a “pages-only” feed for its users, which only shows posts from pages they Like. In 2013 Facebook will continue to optimize News Feed and the EdgeRank algorithm, mainly to reduce the noise for users and to deliver only the content that Facebook believes reflect the interests of the users the best. We’ll also see more types of ads encroaching into News Feeds—Facebook, for example, is reportedly introducing video ads into them sometime in Spring 2013. We will also see a shift toward using more interest lists rather than Liking pages, so that users get more of an overview in their feed. Funnily enough, this moves closer to Google’s Circle concept in Google+.
5. Gifting and Social Commerce Offers to Expand as Amazon Edges In
While Social Commerce is still booming, “F-Commerce” was declared dead in the water. But Facebook isn’t ditching sales on its site just yet — understandably since most of the f-commerce failures were merely re-purposing their e-commerce site on their Facebook pages. Recently, Facebook partnered with Datalogix to “close the loop with offline sales data.” Additionally, Facebook bought mobile gifting app Karma and within a few months turned it into Facebook Gifts. What Facebook does right is deeply connecting its gifting service to the social graph. Instead of a shop front with products to buy, users get suggestions on finding the right gifts for their friends. With one billion users, Facebook can easily become an e-commerce powerhouse in 2013. And Facebook isn’t the only one who believes this: Amazon recently began to offer Facebook users its own gift-giving service with MasterCard.
6. SoLoMo (Social, Local, Mobile) Facebook Sets the Example for 2013
SoLoMo, the abbreviation for Social, Local and Mobile, is already one of the hottest buzzwords in the blogosphere, and describes the convergence of social, local and mobile technology. As Facebook combines all parts of SoLoMo, it is perfectly positioned for upcoming developments in this area. More than 50 percent of users use Facebook on their mobile device and Facebook has introduced new ways — including its Facebook Nearby feature for iOS and Android phones — to monetize this massive mobile usage with new ad formats and special mobile ads.
7. The Facebook Stock Will Recover From The Losses And Turn Upwards
It was the most discussed IPO of the year: $FB. Most people, the media included, assumed the share price would go through the roof. The opposite happened, putting Facebook under extreme pressure to deliver a better monetization of its service. And deliver, they have: new ad formats, a possible mobile and web-wide ad network and gifts as a way of exploiting social commerce directly on its platform. Moreover, Facebook invests heavily in the continuous optimization of its mobile apps, the look and feel of its platform and, of course, stronger sales and marketing processes. As Facebook continues to innovate, we are very confident we’ll see a significant jump in the share price in 2013. Indeed, the resurgence of Facebook’s stock value has begun, just recently debuting on the Nasdaq-100 index.
Alexander Peiniger is the CEO of quintly, the affordable web service that lets companies and brands track and compare their social media performance. Before founding quintly in 2010, he was a McKinsey & Company management consultant in technology and telecommunications. Because Alex likes his life easy, he recently co-founded deploydo, a web tool to automate deployments of source code to one or multiple servers. Alex studied mathematics at the University of Wuppertal and UC Irvine.