Written by Maximilian Conrad
Introduction
When searching for marketing strategies on Facebook, one will find an endless amount of news, papers, journals, and expert’s opinions, that show how to successfully market on Facebook, what mistakes to avoid, and how to become an expert on social media marketing. Undoubtedly, Facebook is a phenomenon and has changed the way of interaction today dramatically. Some people might even say that Facebook changed modern social interaction completely. With nearly 1 billion users worldwide (Internetworldstats.com, 2013) Facebook is the number one target for nearly every company’s online marketing activities (Armelini /Villanueva, 2011). Not being on Facebook means not being part of the modern world and the consumer’s life. The only problem is – Facebook is dead! The latest statistics about Facebook show that, firstly, over the last year Facebook’s growth has slowed down significantly, and secondly, that in many countries, e.g. the United Kingdom, Indonesia, and the U.S. user numbers are declining (See Graph 1)(Quintly.com, 2013; Internetworldstats.com, 2013). This trend is likely to continue in the next years and spread to other countries and areas. As it is most unlikely that people just stop to use the internet or social media networks this phenomenon deserves further analysis.
Graph 1: Facebook User Statistics Jan. 2013 (Source: Quintly.com)
Research Question
New rules of online marketing, postmodern consumerism, or the rise of Web 3.0 are challenging companies to leave old paths and design new marketing strategies. But how useful are all these strategies when the ‘medium’ that these strategies are created for will no longer exist in the future?
This paper focuses on the problems that global online networks have to face with regards to the developments in the online environment. Due to the limit of time and resources this paper only focuses on one online network but likewise can be replicated with other examples. Hence, the key research question is: Will global online networks such as Facebook disappear in the future?
Brave New World
To provide a common basis for the reader and researcher as well as for the researcher to be able to analyze the above mentioned phenomenon with a clear and distinct focus certain developments, theories and criteria need to be clarified. The concepts in this section focus on the business and consumer perspective within the changing online environment that will lead to the decline of Facebook as the main social media platform.
The New Rules of Online Marketing
The online environment has changed rapidly from the point when it became commercialized in the early 1990s (Ben.home.cern.ch, 1995). Ever since then, companies have tried to optimize and adjust its marketing activities to utilize this communication channel (Armelini /Villanueva, 2011). The latest development that challenged marketers to revolutionize their online marketing activities is the rise of social networks (Hanna et al., 2011; Scott, 2007; Kietzmann et al., 2011). According to this new environment David Scott (2007) has tried to define the new rules of online marketing. In this paper, due to the limitation in time and resources, the focus lies on only some specific rules that serve as the foundation for the discussion on why Facebook will disappear (Scott, 2007, pp. 25/26).
As a result of consumers being more sensitized and focused on specific input that serves a certain purpose, companies can no longer push one-way directed commercials towards the consumer. Instead they have to provide high-quality content that pulls the customer towards the information relevant to satisfy the consumers need. Content is a key success factor for online marketers. Additionally, social media networks show that consumers are looking for belonging, participation, and interaction (Kietzmann et al., 2011). Consumer bargaining power, described in Michael Porter’s Five Forces (2008), is highly increased in digital social networks. The level of high bargaining power also has the effect that company’s ‘subliminal’ marketing activities are more prone to being exposed as such, as consumers are more skeptical in the online environment and value reliable, trustworthy information (Wind, 2008; Hagel/Armstrong, 1997; Scott, 2007; Varadarajan/Yadav, 2009, Smith et al., 2005).
The Innovator’s Dilemma
It can be argued that Facebook revolutionized social media and led to the downfall of MySpace and other social platforms, e.g. StudiVZ (market leader in Germany) or ICQ (market leader in instant messaging), that either existed before or were developed shortly after Facebook started to take the position as primus in social media networks and established its status quo (Kietzmann, 2011; Businessinsider.com, 2012; Wired.com, 2007; Spiegel.de, 2012; Icq.com, undated). As this example shows, as well as a great number of other examples, market leaders are always imperiled to fall behind. As history shows market leaders often struggle to focus their attention on relevant events/issues. This is due to a lack of competitiveness, lopsidedness in research, and inadequate peripheral vision. These unnoticed events/issues eventually lead to a change in the environment and result in the market leader falling behind. These factors/events are called ‘disruptive innovation’ and are mainly technological changes but can also be changes in business model or environmental changes. Generally, ‘disruptive innovation’ leads to the creation of a new market (Christensen, 2011; Anthony, 2008; Corso/Pellegrini, 2007).
The New Consumerism Paradigm
Ever since Postmodernism became the determining paradigm for consumers and companies, marketing has become the driving force in connecting consumers and brands in an almost symbiotic way. Brands become part of people’s everyday life and help the consumer to define himself/herself (Pieur, 2008; Thompson/Haytko, 1997; Slater, 1997; Corrigan; 1997; Maslow, 1943). As discussed by a number of scholars, the next step towards self-actualization is the adversary of consumers towards brands and resistance towards blunt marketing activities. This is due to the fact that people are overexposed to marketing activities today. Eventually, these changes will lead to a new paradigm in consumer behavior towards seeing brands as social and cultural resources (Holt, 2002; Thompson/Haytko, 1997). This step towards a ‘crude’ and authentic way of consumer-company relationship will be the gateway to the next revolution in consumerism and challenges marketers to drastically change the way they think of marketing and especially online marketing today (Holt, 2002; Scott, 2007; Bnj.com, 2008).
Back to the Future
As the online environment changes so do the consumers. Hence, companies have to change their marketing activities according to those changes. The changes that shape the modern consumer society and its environment are dramatic but not everything has changed completely (Scholz&Friends, 2008; Searchinitiatives.com, 2012; Scott, 2007; Hanna et al., 2011; Winer, 2009). The brave new world described in the first part of this paper creates an extremely challenging environment for global online networks such as Facebook as these changes affect all aspects of the market. This section focuses on the challenges Facebook is facing in this new environment and the platform’s deficiencies.
The Past Recedes
As discussed earlier, many of the models known to marketers are no longer feasible. Therefore, marketing experts and researchers are determined to decode the peculiarities of the online environment and it’s consumers to develop relevant theories and strategies. Even though it appears that the entire marketing discipline has been turned upside down, some old rules to marketing still apply and are even amplified by the new structures of the digital era. Today, Facebook is the number one social media network in the world because the team of Mark Zuckerberg had a vision to help people connect to the world and express themselves (About.com, 2012). Facebook’s success stimulated other companies to see the potential of this tool as a platform for their marketing efforts. Although Zuckerberg stated that Facebook will always be free for its users, it opened itself up to become commercialized by adding application services or going public (Web-strategist.com, 2012; investor.fb.com, 2012). This strategic and perceptual change of the ‘new’ Facebook as a cultural source and service for people can be seen as the pivotal factor that weakened the network’s competitive advantage (Scott, 2007). This change in combination with the consumer’s search for authenticity and refuge from overexposure to advertising and information overload is most likely to result in consumers longing for alternatives. As recent history shows, such an alternative will most likely be instigated by ‘disruptive technology’, e.g. Over-the-top technology or new smartphone technologies (Christensen, 2011; Anthony, 2008; Corso/Pellegrini, 2007; Forbes.com, 2012; Itbusinessedge.com, 2012). ICQ and AOL Instant Messenger were the two biggest social media networks in the U.S at the time Facebook was launched as a new social media network. Today both platforms struggle to survive (Icq.com, 2012; Timewarner.com, 1998; OPSWAT, 2011; Fan, 2002). As the past recedes, some aspects that challenge companies in the marketing discipline continue to preside. Will Facebook find a way to overcome this dilemma and adapt to the new environment?
The Game Has Changed
Despite the fact that some of the old paradigms in marketing still exist and will continue to do so, such as the ‘innovator’s dilemma’, successful marketers have understood that the game has changed. New concepts, such as content marketing or relationship marketing, are changing or complementing the tradition Marketing Mix (Dominici, 2009; Gummesson, 2011; Christopher, 2002; Constantinides, 2006; Wind, 2008; Winer, 2009). Consumers are drowned by ‘noise’. As a result they are looking for authentic, trustworthy brands that help to create identity and belonging (Holt, 2002; Arnould/Thompson, 2005; Belk, 1988; Muniz/Schau, 2011; Muniz/O’Guinn, 2001). It becomes evident that the focus of online marketing is strongly driven by the empowered position and skepticism of consumers as a result of the postmodern paradigm shift (Varadarajan/Yadav, 2009; Firat/Venkatesh, 1995). Armelini and Villanueva (2009) identified a number of factors that define what consumers value in the social media environment. Some of these factors clearly depict the shortcomings of the ‘commercialized’ Facebook. Credibility is a determining factor in a consumer’s decision making process as consumers are more disloyal to brands and prone to change. A single opinion from peers can have greater impact than the most-expensive marketing campaign. Companies need to make sure to be clear about their intentions and have a strong value proposition (Scott, 2007; Armelini/Villanueva, 2011; Hanna et al., 2011; Dominici, 2011). As Facebook is turning into a marketing platform their value proposition is becoming blurry and users are turning away (Blog.theduffyagency.com, 2010; Mashable.com, 2010; Social-media-optimization.com, 2010). Sean Duffy, an expert in online marketing, stated in a personal discussion, ‘Mark Zuckerberg hates advertising and now he is doing the thing he hates most. What do you think is going to happen?”
I Am What I Am
Consumers not only search for authenticity but are also highly engaged in inventing and reinventing their identity (Belk, 1988; Holt, 2002; Arnould/Thompson, 2005). The new generations of digital natives are highly focused on control and autonomy (Myers/Sundaram, 2012; Armelini/Villanueva, 2009). Today, the level of companies and brands’ intrusiveness is strongly controlled by the consumer. B2C marketing in a social media network context is highly sensitive and can be interpreted as an invasion of the consumer’s privacy. A great number of marketers still rely on traditional push marketing strategies. Due to that fact many businesses struggle to create a dialog with their consumers or create content that is relevant to the consumer’s wants and needs. Therefore, every time Facebook pushes a marketing message it is an invasion of the consumer’s personal life. Especially the mobile application of Facebook is a perfect example of Facebook’s interruption marketing (see images 1-5). Eventually the space of interactivity will be diminished to such a degree that users will turn away from Facebook.
Image 1 – 5: Facebook mobile application (Source: own)
These images are only a small example of Facebook’s push marketing strategy. The higher the amount of interruption the more likely it is for the consumer to question Facebook’s purpose and lose trust. A lack of trust stands in direct conflict with the consumer’s search for authenticity. This also results in the theory that online marketing in the future can only be successful if companies provide relevant content and not push advertisements. Consumers are not interested in spin and interruptive advertising any longer (Scott, 2007; Myers/Sundaram, 2012). In this case Facebook is confronted with a major and fatal issue. Facebook is unable to create relevant content on its own because as an online network it only facilitates the platform for others to create content. Facebook only serves as the medium of exchange. In the beginning this service was Facebook’s unique selling proposition and easily turned it into a cultural resource. As it now has become a platform for 1 billion users and nearly every company in the market this strong position is fading. Therefore, Facebook relies solely on content created by its users and is in the dilemma of balancing commercial activities and interference with consumer identity projects (Hanna et al., 2011; Scott, 2007; Kietzmann et al., 2011). This conflicts with the idea that the new generation of consumers are looking for meaning, engagement, participation, and cultural exchange (Pieur, 2008; Thompson/Haytko, 1997; Slater, 1997; Corrigan; 1997; Maslow, 1943). Will this discrepancy between user’s wants and Facebook’s commercial activities eventually result in the social networks collapse?
All Good Things Come to an End
The shortcomings of Facebook and its potential disappearance have been discussed in various publications from a sociological point of view. This paper focuses on the phenomenon Facebook and its downfall from a marketing and consumer theory point of view. The first part of this paper, describes the changes in the online business environment, changes in consumer behavior and how online marketing changes as a result of that. Secondly, this developed framework is used to elaborate the impairments of Facebook in this new environment and the implications resulting from that.
By trying to answer the question “Will Facebook disappear in the future?” and by analyzing the different influential factors more questions have been raised. Nevertheless, the following can be said about Facebook’s future and other global online networks.
As the world is shifting towards a new social environment and Web 3.0 (transition from web to mobile), Facebook is on the verge of losing its relevance. As consumers are searching for meaningful interaction and authentic relationships Facebook has fallen victim to its own size. New social networks are popping up pointing towards a more private and selected community (Nakmeister.hubpages.com, 2011). With the rise of Web 3.0, experts are expecting a hyper-
connection and an even more segmented society (Digital Inspiration, 2009; Itpro.co.uk, 2012). This new old way of ‘downsizing’ social interaction and refocusing one’s personal perspective to a smaller scale in search for identity in combination with the new rules of online marketing, which are defined by relevance of content and interactivity, results in an environment not suited for a global, omnipresent, generalized social media network such as Facebook.
While elaborating further on Facebook’s decline it raises additional questions that deserve further investigation. The first question is “Will Google meet the same fate as Facebook?” and the second question is “How can global online networks avoid to collapse within this new environment?”
References
ANTHONY, S. D. (2008). The innovator's guide to growth: putting disruptive innovation to work. Boston, Mass, Harvard Business Press.
Armelini , G. and Villanueva, J. (2011) Adding Social Media to the Marketing Mix. IESE Insight, (9), p.29 - 36.
Arnould, E. and Thompson, C. (2005) Consumer Culture Theory (CCT): Twenty Years of Research. Journal of Consumer Research, 31 (4), p.868 - 882.
Belk, R. (1988) Possessions and the extended Self. Journal of Consumer Research, 15 (2), p.199 - 207.
CHRISTENSEN, C. M. (2011). The innovator's dilemma: the revolutionary book that will change the way you do business. New York, Harper Business.
CHRISTOPHER, M., PAYNE, A., & BALLANTYNE, D. (2002). Relationship marketing creating shareholder value. Oxford, Butterworth-Heinemann.
Constantinides, E. (2006) The Marketing Mix Revisited: Towards the 21st Century Marketing. Journal of Marketing Management, 22 (3/4), p.407 - 438.
Corrigan, P. (1997). The Sociology of Consumption. London, [etc.], SAGE Pub.
Corso, M. and Pellegrini, L. (2007) Continuous and Discontinuous Innovation: Overcoming the Innovator Dilemma.. Creativity & Innovation Management, 16 (4), p.333 - 347.
Dominici, G. (2011) From Marketing Mix to e-Marketing Mix: a literature overview and classification. International Journal of Business and Management, 4 (9).
Firat, A. and Venkatesh, A. (1995) Liberatory Postmodernism and the Reenchantment of Consumption. Journal of Consumer Research, p.239 - 267.
GUMMESSON, E. (2002). Total Relationship Marketing Rethinking Marketing Management. Burlington, Elsevier. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=298023.
Hagel, J. and Armstrong, A. (1997) Net Gain. Expanding markets through virtual communities. McKinsey Quarterly, (1), p.140 - 153.
Hanna, R. et al. (2011) We’re all connected: The power of the social media ecosystem. Business Horizons, 54 (3), p.265 - 273.
Holt, D. (2002) Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding. Journal of Consumer Research, 29 (1), p.70 - 90.
Kietzmann, J. et al. (2011) Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons, 54 (3), p.241 - 251.
Maslow, A. (1943) A Theory of Human Motivation. Psychological Review, 50 (4), p.370 - 396.
Muniz, A. and O'guinn, T. (2001) Brand community. Journal of Consumer Research, 27 (4), p.412 - 432.
Muniz, A. and Schau, H. (2011) How to inspire value-laden collaborative consumer-generated content. Business Horizons, 54 (3), p.209 - 217.
Myers, M. and Sundaram, D. (2012) Digital natives : Rise of the social networking generation. University of Auckland Business Review, 15 (1), p.28 - 37.
OPSWAT (2011) Security Industry Market Share Analysis. [report] OPSWAT.
Pieur, A. et al. (2008) Cultural capital today: A case study from Denmark. Poetics, 36 (1), p.45 - 71.
Porter, M. (2008) The Five Competitive Forces that Shape Strategy. Harvard Business Review, 86 (1), p.78 - 93.
SCOTT, D. M. (2007). The new rules of marketing and PR: how to use news releases, blogs, podcasting, viral marketing, and online media to reach your buyers directly. Hoboken, N.J., John Wiley & Sons.
Slater, D. (1997). Consumer culture and modernity. Cambridge, UK, Polity Press.
Smith, D. et al. (2005) Online peer and editorial recommendations, trust, and choice in virtual markets. Journal of Interactive Marketing, 19 (3), p.15 - 37.
Thompson, C. and Haytko, D. (1997) Speaking of Fashion: Consumers' Uses of Fashion Discourses and the Appropriation of Countervailing Cultural Meanings. Journal of Consumer Research, 24 (1), p.15 - 42.
Varadarajan, R. and Yadav, M. (2009) Marketing Strategy in an Internet-Enabled Environment: A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years. Journal of Interactive Marketing, 23 (1), p.11 - 22.
Wind, Y. (2008) A Plan to Invent the Marketing We Need Today. MIT Sloan Management Review, 49 (4), p.21 - 28.
Winer, R. (2009) New Communications Approaches in Marketing: Issues and Research Directions. Journal of Interactive Marketing, 23 (2), p.108 - 117.
Online
About.com (2012) Facebook Mission Statement - Global Sharing, Connections, and Openness. [online] Available at: http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Facebook-Mission-Statement.htm [Accessed: 5 Feb 2013].
Ben.home.cern.ch (1995) A Short History of Internet Protocols at CERN. [online] Available at: http://ben.home.cern.ch/ben/TCPHIST.html [Accessed: 3 Feb 2013].
Blog.theduffyagency.com (2010) Facebook burnout: Have we finally had enough? - Methodical Madness - International Brand Management. [online] Available at: http://blog.theduffyagency.com/blog/2010/9/3/facebook-burnout-have-we-finally-had-enough.html [Accessed: 7 Feb 2013].
Bnj.com (2008) High Performance: Why Marketing Needs to Change | Babcock & Jenkins. [online] Available at: http://www.bnj.com/high-performance-why-marketing-needs-to-change/ [Accessed: 5 Feb 2013].
Business Insider (2012) The 13 Secrets To Facebook's Success. [online] Available at: http://www.businessinsider.com/secrets-to-facebooks-success-2012-5?op=1 [Accessed: 5 Feb 2013].
Digital Inspiration (2009) Web 3.0 Concepts Explained in Plain English (Presentations). [online] Available at: http://www.labnol.org/internet/web-3-concepts-explained/8908/ [Accessed: 7 Feb 2013].
Fan, J. (2002) INSTANT MESSAGING USED BY MORE THAN 41 MILLION HOME INTERNET SURFERS, ACCORDING TO NIELSEN//NETRATINGS. [e-book] New York: Nielson. http://www.nielsen-online.com/pr/pr_020617.pdf [Accessed: 11 February 2013].
Forbes.com (2012) Here's Why Google and Facebook Might Completely Disappear in the Next 5 Years - Forbes. [online] Available at: http://www.forbes.com/sites/ericjackson/2012/04/30/heres-why-google-and-facebook-might-completely-disappear-in-the-next-5-years/2/ [Accessed: 14 Feb 2013].
Forbes.com (2012) Google and Facebook Dead in 5 Years? Fat Chance! - Forbes. [online] Available at: http://www.forbes.com/sites/georgeanders/2012/05/02/lift-that-curse-mobile-wont-kill-google-or-facebook/ [Accessed: 14 Feb 2013].
Icq.com (n.d.) ICQ - The Corporate Site - ICQ.com. [online] Available at: http://www.icq.com/info/icq_numbers.html [Accessed: 5 Feb 2013].
Internetworldstats.com (2012) Facebook Growth and Penetration in the World - Facebook Statistics. [online] Available at: http://www.internetworldstats.com/facebook.htm [Accessed: 3 Feb 2013].
Investor.fb.com (2013) Facebook Reports Fourth Quarter and Full Year 2012 Results - Facebook. [online] Available at: http://investor.fb.com/releasedetail.cfm?ReleaseID=736911 [Accessed: 7 Feb 2013].
Itbusinessedge.com (2013) Top 10 Technology Trends for 2013. [online] Available at: http://www.itbusinessedge.com/slideshows/top-10-technology-trends-for-2013.html [Accessed: 5 Feb 2013].
Itpro.co.uk (2012) Q&A: Conrad Wolfram on communicating with apps in Web 3.0 | IT PRO. [online] Available at: http://www.itpro.co.uk/621535/q-a-conrad-wolfram-on-communicating-with-apps-in-web-3-0 [Accessed: 7 Feb 2013].
Mashable.com (2010) Why Facebook Users are Considering Leaving. [online] Available at: http://mashable.com/2010/05/25/facebook-quit-survey-results/ [Accessed: 7 Feb 2013].
Nakmeister.hubpages.com (2011) Don't like Facebook? Alternative Social Networking Sites. [online] Available at: http://nakmeister.hubpages.com/hub/Not-Facebook-Alternative-Social-Networking-Sites [Accessed: 7 Feb 2013].
Quintly.com (2013) Free Facebook Country Statistics And Worldwide User Demographics. [online] Available at: http://www.quintly.com/facebook-country-statistics?period=3month&sort=changeInPercent&dir=desc [Accessed: 5 Feb 2013].
Scholz&Friends (2008) Dramatic Shift in Marketing Reality. [video online] Available at: http://www.youtube.com/watch?v=ciSrNc1v17M [Accessed: 5 Feburary 2013].
Searchinitiatives.com (2012) The Next Online Revolution – The Convergence of Two Dramatic Market Changes | Search Initiatives. [online] Available at: http://www.searchinitiatives.com/articles/the-next-online-revolution-the-convergence-of-two-dramatic-market-changes/ [Accessed: 5 Feb 2013].
Socia-media-optimization.com (2010) Are Teens Leaving Facebook?. [online] Available at: http://social-media-optimization.com/2010/08/are-teens-leaving-facebook/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%2BSocial-media-optimizationcom%2B%28social-media-optimization.com%29 [Accessed: 7 Feb 2013].
Spiegel.de (2007) Soziale Netzwerke: Holtzbrinck beerdigt VZ-Netzwerke - SPIEGEL ONLINE. [online] Available at: http://www.spiegel.de/netzwelt/web/netz-fuer-schueler-keine-hoffnung-mehr-fuer-studivz-a-838115.html [Accessed: 5 Feb 2013].
Timewarner.com (1998) ICQ Surpasses 20 Million Registrations. [online] Available at: http://www.timewarner.com/newsroom/press-releases/1998/10/ICQ_Surpasses_20_Million_Registrations_10-27-1998.php [Accessed: 11 Feb 2013].
Web-strategist.com (2012) Facebook Strategy | Web Strategy by Jeremiah Owyang | Social Media, Web Marketing. [online] Available at: http://www.web-strategist.com/blog/category/facebook-strategy/ [Accessed: 7 Feb 2013].
WIRED (2007) How Mark Zuckerberg Turned Facebook Into the Web's Hottest Platform. [online] Available at: http://www.wired.com/techbiz/startups/news/2007/09/ff_facebook?currentPage=all [Accessed: 5 Feb 2013].