Facebook finally hits a brick wall

The last few days have not been good for Facebook — or rather Meta, as we must learn to call the company. Shares fell almost 25% (and at time of writing have not recovered) after the announcement of disappointing revenue figures and the first drop in daily user numbers in the social media giant’s history. CEO Mark Zuckerberg took a personal hit of tens of billions of dollars.

Commentators were quick to come up with plausible diagnoses:

• It’s Apple’s fault. The iOS 14.5 update made it possible for users to opt out of being tracked by Facebook, WhatsApp and Instagram across other apps, presenting a significant threat to Meta’s ad revenue.
• It’s TikTok’s fault. Despite the introduction of Instagram Reels, users — especially younger users — continued to flock to the newer and trendier platform.
• It’s the planet’s fault. Facebook may have lost half a million daily users in Q4 2021, but it still has almost 2 billion. There are only around 5 billion people aged 20-80 on planet earth. It may simply be the case that there is no real room for expansion.

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Why we care. Of course, another plausible reason is that, for individual users and brands alike, Facebook just isn’t very likeable. Sure, a lot of businesses, especially smaller businesses, are heavily reliant on Facebook. But enormous numbers of the businesses that could afford to chose to boycott Facebook last year.

There’s little doubt that many individual users are turned off too by disinformation, by privacy concerns, or by finding it — in comparison with TikTok — “cluttered or dated.” Is Meta too big to fail? We think it’s unlikely that it’s mortally wounded by these results. But perhaps its leadership needs to do more to fix its problems than talking up revenue from the yet-to-be-created metaverse.

About The Author

Kim Davis is the Editorial Director of MarTech. Born in London, but a New Yorker for over two decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Prior to working in tech journalism, Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.