Potential Facebook Bombshell: Users Spending Less Time on Social Media Around the Globe

July 25, 2016 11:20am Nasdaq:FB

facebookSocial networking behemoth Facebook Inc (NASDAQ:FB) reports earnings on Wednesday after the market close, but a stunning revelation regarding user engagement may be the most important FB news you see this week.


Facebook Usage Drops 6.7%

Digital media firm SimilarWeb published a blockbuster study last month that found people used social media apps much less in the first quarter of 2016 versus the same period in 2015. The differences varied widely country by country, but in general, usage is down overall across the board. Most notably, in America, the study found:

  • A 36.16% decrease in Instagram usage,
  • A 27.94% drop in Twitter usage,
  • A 19.21% plunge in Snapchat use, and
  • A 6.7% decrease in Facebook.

What’s more current installations of the Facebook app are down across all segments as well. So less people are using the app, and the ones who are using it are using it less.

While Facebook’s usage decline isn’t as pronounced as some others, any drop is a big deal for a company that depends on increasing the level of engagement with its users. If a trend emerges where people continue to spend less and less time on Facebook, it almost certainly would negatively impact the company’s bottom line.

Facebook depends on advertisers spending big dollars to get in front of highly-tailored audiences, and increasingly on publishers to choose its massive platform to disseminate their content.

Now not only are users moving away from Facebook, but publishers may too.

Scathing Op-Ed

In a huge article posted on AdWeek today, guest writer Winder Hughes slammed Facebook’s new news feed algorithm. FB recently made a big change to focus news delivery on what your friends are reading, rather than what’s widely popular.

The change clearly has publishers up in arms:

Now, for publishers who have already in many ways lost control of how their content is accessed, consumed and monetized, they’re faced with Facebook throttling their access yet further. And that’s not all. Facebook is also closing its News Feed application, Paper, further curtailing choice of outlets and hastening a consolidation of power that benefits no one but Facebook. Yikes!

Hughes goes so far as to urge content creators to walk away from Facebook as a platform and focus on other channels and methods to build their audiences — and the advertising dollars those audiences can bring.

Facebook shares rose $0.10 (+0.08%) to $121.10 in Monday morning trading. The stock has gained 16% year-to-date and recently hit new all-time highs.

FB-2016-07-25

Stay tuned for more Facebook coverage this week, when we’re take an in-depth look at the latest earnings results and much more. As we noted recently, FB is one of four companies whose Q2 reports will determine the direction of the markets over the next several months.


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