Facebook Just Lost US$120 Billion, Are We In Trouble?

Last Thursday (26/07/2018), Facebook share price fell by a whooping 20%, wiping out US$120 Billion from the market, the first ever record loss for an individual stock in a just one day. This happened just when the company dropped (no pun intended) it’s latest quarterly earnings, revealing stagnation of user growth, rising costs to fight fake news as well as privacy issues with Cambridge Analytica.

Does this spell doom for Facebook and advertisers including us? Far from it! We believe that this is the just the first drop of a roller coaster ride and the excitement only builds up from there. Here are 4 points why we think otherwise!

1. Instagram’s Revenue was not released

Yes, Instagram actually belongs to Facebook and the raw figure of revenue that is contributed by Instagram is not shown. Let us explain why Instagram is so important.

Photo Credit: lucyduggar.com

In just June 2018, Instagram announced that they had hit their 1 billion users milestone, only rivalled by 2 other social networks, Facebook and YouTube. This number is expected to grow in the future as the user base will be continuously fuelled by teenagers (or even younger but minimum age to join IG is 13) when they are introduced into technology.

Did we forget to mention that Instagram is where the youngsters hangout nowadays? New statistic by Pew social media report revealed that 59% of people aged 18-29 in U.S. alone uses Instagram. They are the next in-line to become the biggest spender in the digital space as they become more tech-savvy. 

Which leads us to the second point…

2. Instagram have not maximised their potential in ad spaces yet

“But don’t they already have ads in the newsfeed and stories? Don’t spam us!”

With the upcoming demands by investors to ensure revenue growth, Facebook will definitely be introducing more ad spaces to monetize on. But of course, with Mark Zuckerberg still at the helm, user experience will still be the number one goal for the company.

The opportunities are limitless. Ads on the explore feed, direct messaging section and with the introduction of IGTV, all the possibilities of ads placement done by YouTube will definitely be made available for advertisers.

3. Whatsapp Has Not Even Been Monetized

We are not randomly throwing brands around here. WhatsApp is also owned by Facebook! The communicative app that sees 1.3 billion monthly active users is an untapped resource. There are currently ZERO ad placements on WhatsApp and with the recent announcement of Facebook making their move on monetizing WhatsApp, we can expect to see more opportunities for advertisers.

WhatsApp for Business – infographic

Photo Credit: Leadsquared

Do you also know that WhatsApp is also the top-rated source for news in some countries? A Reuters Institute study revealed that our closest neighbour, Malaysia has 51% of the respondent sampled that they used WhatsApp to get news (remember that long warning messages sent in our family group chats?).

4. Large spenders like the Coca Cola's of the world are only spending less than 15% of their budget on social media

And of course, their budget is BIG, even with just less than 15%. It is expected that they will be raising their spending on social media over the next few years as traditional media start to be phased out. The need to continuously create brand recall will means they need to be at where their customers will spend their time in, social media. This rise in spending will definitely feed into the bottom line of Facebook while they sit back and count the cash.

There are bound to be various other factors that will affect the down line of Facebook. At Surge Digital, we capitalize on these opportunities to help ensure that the digital campaigns we run are successful even in times of uncertainty. If you need help with your digital campaigns or even our training in the everchanging landscape, scroll down and fill up our form to learn more!

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