Facebook’s Transition to Dr. Jekyll and Mr. Hyde

on March 7, 2019
Reading Time: 6 minutes

Yesterday, Mark Zuckerberg outlined what he called a privacy focused vision for social networking. It was interesting he didn’t title it a privacy-focused vision for Facebook but seems to make a broader implication that Facebook is going to try and lead in the era of privacy and that other networks should follow suit. That is at least my interpretation of it.

The way things were heading with consumer surveillance by companies on behalf of advertising agencies, the entire concept of a public social network has been under fire and Facebook being under the most fire had to do something. What Zuckerberg outlines in his post is the baby steps toward creating a division of safe, private spaces and more open public spaces under the same social network banner. As interesting as this is, I fear it will turn Facebook into Dr. Jekyll and Mr. Hyde and in the end cause more internal strife as each personality competes for power.

Facebook’s Critical Junction
The reality was Facebook had to do something. The direction they were heading was not sustainable from a user growth, user sustainment, or revenue growth standpoint. Facebook’s challenges, which were predominantly caused due to chasing hyper growth and not thinking through the consequences, put them into a position of severely declining user trust combined with a sentiment of an increasingly toxic environment. Not only has Facebook’s user growth slowed to a halt, but the overall consumer sentiment toward Facebook has made it very hard for them to releases new products and services. The latter being one of the biggest issues for their continued growth goals.

While Facebook’s financials have also looked stable throughout the turbulence, the reality is advertiser sentiment has turned in the last 12 months, and every single ad spend survey, ad exec interview, and key themes from big conferences like Ad Week, has proved that the biggest brands and advertisers have already begun shifting some budget from Facebook to other things.

While Instagram remains a favored spot with advertisers, they have traditionally placed campaigns with Facebook that span both Instagram and Facebook. While advertisers still want to advertise on Instagram, they have become sensitive to those ads also being on Facebook. Which means this move by Facebook is to also not jeopardize the upside opportunity for Instagram by nature of the association of Facebook.

My read on the overall situation, and why Facebook needed to do something, was holes were starting to be punched in the ship, and it was sinking slowly. Facebook tried to put on a pretty face, but every single bit of global research I’ve seen does show a decline in usage by all developed market consumers. Despite people’s opinions, I’m confident Facebook was seeing concerning user behavior, and this new plan is in light of their own internal concern that user trends were not going in a good direction.

Is Facebook’s Plan the Answer?
One thing I kept in mind when reading Mark Zuckerberg’s post was whether or not he, and others at Facebook, had a firm grasp on the problem. While not 100% encompassing of the trends in social media behavior, this part of Mark’s post outlines their belief on the underlying behavior.

Today we already see that private messaging, ephemeral stories, and small groups are by far the fastest growing areas of online communication. There are a number of reasons for this. Many people prefer the intimacy of communicating one-on-one or with just a few friends. People are more cautious about having a permanent record of what they’ve shared. And we all expect to be able to do things like payments privately and securely.

While we have run three of our own consumer research studies on Facebook over the past few years, I have been reading behavioral research on Facebook for many years. The one constant behavioral pattern and I think this is critical to understand, is the cycle of a Facebook user when onboard was very heavy usage and then a shift (over time) to much less usage. This is framed by stating mature Facebook user behavior declines, and while they exhibited a period of high daily usage (in minutes), that number declined the longer they were on the service.

Ultimately, this is why Facebook needs a family of services or assets. They need more than just Facebook proper because of this behavior, so they can own a larger share of social media time. Hence the need for Instagram, and new services like messenger, groups, Watch/Video, and other new things they have in the pipeline. The other behavioral pattern was from large groups to small groups. Facebook started off filling a general purpose need, connect with people, then became refined by the user to narrow the focus of those connections to a few.

The narrowing of focus to the few people in your circle is in-line with the Zuckerberg memo stating that one-on-one or smaller group connections are the trends. These are also areas where Facebook will have to make a division between what’s public and what’s private. At a fundamental level, a good question to ask is whether or not consumers will understand and then embrace the difference.

This thread brings out something extremely interesting. Do humans assume that their actions when they go into public spaces are private? This thread would seem to assume that some people do absolutely expect their behavior to be private in public spaces despite the fact that being in public should carry with it that your behavior is exactly that — public.

What needs to be made clear, is there is not a general understanding of public vs. private behavior specifically in public space. Perhaps this is why people posted on something like Facebook and expected it to be a private space when in reality there never should have been that expectation. But this is not a general viewpoint since there are groups of people who do understand when they are in public they are in a public space and not a private one. This simply goes to show there is not a universal understanding of privacy, and the public vs. private dividing lines are not as clear as one would expect them to be.

In light of this knowledge, I do question if this division of public vs. private space is something Facebook users can adapt to. I’ve outlined before my theory on behavioral debt and how hard it is to change entrenched behaviors of your customers. Facebook is up against many years of behavioral debt, on top of a tarnished reputation and loss of user trust, and this seems very difficult to come back from.

Facebook is right, in my opinion, to start to work to build user trust back in several spaces on Facebook where privacy is more important. Messages and Groups are the right places to start. However, both those services are also highly attractive to advertisers, yet it seems that if Facebook is going to promise privacy in these spaces, it will be very hard to also monetize them. This is where the Jekyll and Hyde concern will continue to be a worry. Facebook will want need to continue to chase growth because the public market will punish them if they don’t. Growing from here on out, from a revenue perspective, will require very different turning of the levers than when growth was easier during their user ramp phase. The business/capitalistic persona vs. the do what’s right persona is going to be at odds whether Facebook’s management likes it or not. In many ways, Facebook is again in entirely uncharted territory, and for now, it seems obvious that both investor, advertiser, and consumer confidence in the service is not high.

There is a cynical and optimistic view to take here, and while I have my doubts Facebook can pull this off as one entity, we have to applaud them for recognizing the damage to society that has happened because of Facebook and their attempt to help change things for the better vs. continue business as usual which would have come with dire consequences.