Six Pixels of Separation - The Blog
February 7, 2017 4:09 PM

A Lesson From Facebook That Every Brand Should Learn

How hard is it, really, for your brand to change and adjust to new times?

The public answer is, usually: "If we don't disrupt ourselves, someone else will. We have a top-down approach to innovation that comes from our CEO's office and instilled into all of our business units. We are actively acquiring startups and scaling our teams with new product launches and developments."

The real answer is, usually: "We're being disrupted by the competition, startups and those outside of our industry. We never expected it to happen so fast. We are large and slow to adapt. Our current revenue models are strong enough that innovation is more like a skunkworks project, and few pay all that much attention to it as we continue to drive sales and milk the business model that we have. Plus, anything that we have truly attempted to do well has been stuck in an IT and planning roadmap that puts us two years into the future. It's hard to be nimble when you're not all that nimble."

Change is much harder to do than it is to talk about.

We have seen this before. We sit in these amazing day-long conferences watching all of these brands talk about how innovative and disruptive they are being. Then, we go home and we become consumers. We try to find out information about these brands on our iPhones and we're stuck with terrible mobile experiences. You realize that their Facebook brand page is nothing but corporate content layered in between customer complaints that are not being attended to with a timing that could be even close to "real-time." In short, the brand just kind of falls apart in the real world of consumers, technology and how they connect with a brand. You could think that this was the anomaly, but it's not. Do your own research. Look at these real brand experiences, and report back if they look and feel like the brand experiences these consumers have when using Uber, Snapchat, Instagram, etc...

Facebook was at the edge as well.

Many may not remember this, but Facebook took their time when it came to shifting to a mobile experience. For years, consumers complained about their mobile experience. It was limited. It was not even close to the desktop experience. It was, in short, frustrating. Facebook could have reacted by  slowing adapting, adding in more features and moving towards a mobile-first experience. They did not. While they were white hot, they made a concerted effort - in the middle of that crazy growth - to do an about-face and run at mobile. Hard. Nearly four years ago, I wrote an article titled, The Mobile-Only Strategy Imperative. From that post:

"The event horizon for the PC - as we have known it to date - is not far off. Just look at what Facebook did to switch their browser-based online social network over to a mobile-first strategy. Whether it was forced by consumer demand, Wall Street or their own pro-active realization is irrelevant. Facebook responded. Facebook responded well. Just look at the past six months. They have made massive strides in shedding their PC-based legacy for this brave new world, where we're all connected, sharing and more in the palms of our hands. That experience is fundamentally differently from the PC and Web browser-based experience. It's something that brands are going to have to double-down on now. As bullish as I was on the Internet, e-commerce and social media in their nascent stages, I am an unabashed die-hard evangelist for the post PC and post Web browser world. The only difference is that the others could have been a fad. This is a reality."

This was four years ago, so let's look at Facebook's not-so-early move to be mobile focused...

This past week, Facebook announced their quarterly earnings and they were staggering. While they warned of a pending revenue slowdown, the company generated more than $10 billion in net income in 2016. Its Q4 2016 earnings report showed that the company generated $8.8 billion in revenue during the last three months of the past year. Facebook now reaches 1.86 billion monthly active users - they added 70 million users in the last quarter.

But, here's the big news: mobile advertising accounted for 84% of its 2016 fourth-quarter revenue (up from 80% last year). 

There is no doubt that Facebook was not only slow to mobile, but falling behind. Badly. Just look at what that course-correction and effort has done in four years. It would be easy for any brand to say that a move like that is easy when you're Facebook (they made the shift in about six months time). I do not agree. Facebook was a rocketship back then. They were, literally, printing money and growing exponentially on their Web-based advertising model. There was no sign of this letting up. Still, Facebook saw the changes. They saw the movement. Contrary to what most people think, they did not have these resources lying around. They knew that by making this move, it could be very disurtiptve to both their current business model and future growth... and it was.  

There is a powerful lesson here.

Even the brands that are disrupting are not safe. Even the brands that are seen as the innovators will struggle to turn a large ship around, and go in a new direction. Even one of the coolest brands doesn't have the resources just sitting around waiting for what's next. So, if Facebook was able to make such an obvious move to the public, but such a risky move inside the organization, who are we to sit idly by on the sidelines? It doesn't end there, either. The other telling piece of Facebook's story (and it's very relatable to every brand today) is that they are getting much more focused on video. This, too, was not their strength. This too is happening after the fact (look at what YouTube, Snapchat, Netflix, Amazon and others have already done in the space). Still, Facebook has been very successful in growing video and - as you can read in the quarterly earnings call's transcript - are focused on growth and shifting their content thrust to being about video. Again, they're doing this and it could be very risky to current business models and operations.

What are the rest of the brands waiting for?

By Mitch Joel

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