As you know, today on the Digital Marketing Magazine we are celebrating the 10th birthday of Facebook. Earlier this week, I caught up with Neil Duffy from Interbrand to ask him a few questions about the social network giant.
Neil, after ten years has the Facebook brand exceeded, met or fallen short of its potential?
Ten years ago I was working for a smallish ad agency and we’d just moved into the roof of Smithfield Market. I’d followed the business and had recently moved into a flat in Clerkenwell, where I still am today. The first iPods were in the process of being launched in the UK market. It was only a couple of years since the dot.com bust and, while people were instinctively aware that the internet was in the process of changing everything, they weren’t sure how and how anyone would be able to make any money from it. In comparison to the established world of brand advertising “digital” seemed tactical and superficial and I’m not sure that I’d encountered the phrase “social media”.
It doesn’t seem like long ago.
In 2013, Facebook took in revenues of $7.9 billion, up 76% year on year and, yes, it makes money: profits of $1.5 billion which quickly saw its market cap rise by $16 billion – the share price now sits above $60, well in advance of the controversial $38 initial offer price of less than two years ago.
Facebook couldn’t have planned a better set of circumstances as it prepared its birthday celebrationsy.
What have been the most significant turning points in the story of the Facebook brand?
Facebook didn’t invent social media but it delivered it in a form that made it almost indispensable for large numbers of us. In looking at the development of the model, Mark Zuckerberg and those around them have shown continual dynamism and a worthy lack of complacency. This has inculcated a new business culture for the 21st century where employees at every level are encouraged to move fast and break things; where betas are put out to multi variant testing quickly and mistakes are recognised but not censured.
Facebook’s Initial Public Offering in May 2012 was probably the single most important event in their short history. At the time the markets questioned the company’s ability to deliver credible advertising over mobile platforms. In an upcoming era where, mostly younger, users bypassed computers and lived through their mobiles, Facebook looked as though it was in danger of the worst misdemeanour of the post digital age, irrelevance.
Fast forward 20 months and, in a year when mobile ad spend rose 90%, Facebook owned 18% of it. It is accessed daily on mobile devices by 750 million people – more than 10% of the global population and it has proved that it can deliver effective marketing to them via this medium.
How do think the Facebook brand will perform over the next ten years?
From the last ten years we can learn some of the attributes that have contributed to Facebook’s success but also some of the pitfalls that might exist in the years ahead.
Ninety three per cent of Facebook’s employees would recommend their company to others as a place to work; the best brands are built from the inside out and it is clear that Facebook’s 15,000 employees are strong advocates of the cause. Mark Zuckerberg has also demonstrated confidence in his leadership. The hiring of strong colleagues such as Sheryl Sandberg has enhanced rather than detracted from his profile as a confident leader.
Facebook has largely managed its brand consistently over the decade: it learns from its mistakes and changes tack. One example was its perceived insensitivity towards issues of privacy. It has done much to turn this around and make users feels more in control and secure around their personal data and the use that it is put to. It faces similar issues currently on hate messaging but looks to be addressing this proactively.
If the decade ahead was unclear 10 years ago, then similar lack of clarity probably represents the greatest threat. Apple has recently announced that the iPod is in steady decline and there is a belief that the next iteration may be the last. Going into 2004, who could have predicted the extent to which BlackBerry and Nokia would lose their position in the handset world. Facebook looks a strong bet for the years ahead. Its infrastructure scale has created a barrier to direct competition and it benefits from a model which encourages large proportions of the population to consolidate into one or few platforms (there’s little point in engaging on a social media platform when you are the only person you know).
The avoidance of complacency, and the energy and confidence to continue to iterate will be the key to retaining relevance and to continue to grow and nurture the Facebook brand in the decade ahead.
By Jonathan Davies, Editor of the Digital Marketing Magazine.
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