[Expert] Facebook Home: context, challenges and implications for brands, By Grégory Pouy

by bold-lichterman

For many years, Facebook has been criticized for its bad apprehension of mobile, so much so that the announcement of a Facebook Phone has caused the craziest rumors.

And here it is that yesterday they finally announced their solution: it is not a telephone, it is not an OS (Operating System like Android or iOs) but a social layer that it proposes to add to Android [Lire l’article FrenchWeb].

Overall, it is therefore a question of being permanently connected to Facebook:

1. View photos of your friends on your mobile wallpaper & screensaver

2. Chathead: be able to chat at any time with your friends (without ever leaving the application you are possibly on – which is an innovation in itself).

3. Replace several native applications such as the camera, the app store or even SMS

It is an innovative and unexpected solution that should be looked at in detail to better understand how they position themselves.

1. Context

Time spent on mobile
1. Strategic context

– Facebook cannot afford to be just an app in the ecosystem of its biggest competitor (Google / Android) which also happens to be the dominant OS.

– Apart from Brazil and Indonesia, the average visit time on Facebook is dropping and the disenchantment is widely started, especially among the youngest.

– The youngest let go of Facebook and are attracted to pure chat applications such as Snapchat or kik, for that matter, there was talk for a while of the takeover of What’s app by Facebook.

2. Market context

– Young people send a lot of SMS (1,800 / month for an average American teenager)

– The photo is at the center of the uses (the success of Instagram is the best proof)

– Smartphone users (a little over 50% of Americans – iso in France) spend a lot of time on Facebook, as soon as they have a downtime – which, in cumulative time, represents one of the highest activity on smartphone (18% of the time spent).

– The mobile does not have satisfactory advertising offers for advertisers and yet it is a monumental windfall since we now know that consumers rather use apps than the web browser (80/20 ratio) but also they will use their mobile more than their PC in the years to come.

Besides, mobile advertising investments although they remain relatively weak are growing.

2. Issues

Even if Facebook loudly announces that it is a solution designed to put the user at the center (because he puts his social relations at the center), this is obviously far from the case …

1. Dominate digital usage globally

Facebook Home is first of all putting Facebook at the center of the use of digital technology (which will be almost exclusively mobile tomorrow) at the global level. With this innovation, you wake up, live and go to bed with Facebook which (re) becomes, thereby, your daily tool / companion.

On the Business side, like what Facebook has tried to do with brand pages Vs sites, this launch also means that for brands and the media, having an application of their own will make much less sense.

2. Dominate the advertising market

Moreover, the founder of the site did not hide it (no advertising now but I will not be surprised if there are) and this is obviously linked with the first issue.

Facebook has been doing a lot of ads lately to optimize advertising, with lately more precise performance indicators.

So obviously, it would be suicidal to place “xy” ads in place of your wallpaper (though, from Facebook, I expect anything).

No, the idea is much finer than that obviously.

First, if Facebook Home works and people, and in particular young people, exchange all of their messages and photos through this system, the data then collected by Facebook will be colossal.

But above all, by offering users to be logged in permanently to Facebook whether they are on PC or mobile, will allow the latter to meet the dream of many marketers: to be able to track from one “device” to another and to offer targeted, localized and chosen ads.

Thus, as Business insider remarks, it will be possible (if the user chooses it) to receive an ad / promotion from a restaurant near home / where I am.

Note that a recent study notes that Facebook should already recover 30% of mobile ads in the US in 2013 (which is much more than on the web).

3. Regain the hearts of adolescents

Whether through the uses offered by Home or by the price of the HTC partner phone (<$ 100) or by giving pride of place to images in wallpaper and screensaver, young people are very clearly the target targeted by Facebook .

4. weaken Google / Android

By making oneself indispensable and relegating to the background (a little more) web search on mobile and even the OS (Android therefore) in itself, the objective is obviously to take a very important part of the advertising and thus to weaken Google which, for the record, mainly generates income through the purchases of keywords (note that Google owns more than 70% of online advertising today).

5. Move from place to tool

I’ve referred to this element often: being a trendy place means going out of fashion at some point.

It is all the difference with a tool and it is what makes the strength of Google but also Twitter or Linkedin – even before being places, they are tools.

Through the launch of their social search engine, the new newsfeed (which gives Facebook a real-time functionality: listen to the same music as your friends, watch the same videos …) and now from this social layer on Android, Facebook is brings a tool much closer and consolidates its long-term presence but also gives the assurance of maximizing user data and their engagement.

These last 2 elements being those sought by brands in order to make advertisements always better targeted.

3. The challenges for brands

For the moment in France, there is none since Facebook Home is being tested in the US.

It is also surprising that they have chosen their original market rather than Brazil or Indonesia, which have a growing use of Facebook and mobile (even if the penetration of smartphones is not so strong).

1. Adoption

The first question we ask ourselves in view of the Home device is to know if many users will want to adopt this social layer which (necessarily) implies to be even more disturbed but also to end up with photos that could be delicate in the screensaver (there are tons of cases: professional or romantic…).

If Facebook had launched this a few years ago, I have no doubt that it would have been a great success, but young people already say they want to spend less time on Facebook … it remains to be seen whether the chat tool offered by Facebook will be able to tilt them to the other side of the barrier …

The choice is not neutral, because choosing Facebook Home also means deciding to receive more advertisements on your phone in the medium term …

2. Targeted advertising

Obviously, this is the major attraction for brands and the application has been designed mainly around this aspect.

If Facebook Home is adopted, it will be Ali Baba’s cave of targeted and contextualized advertising on mobile for brands.

3. Facebook addiction

Already I found that the pages gave a strong dependence of the brands on Facebook since a lack of mastery of the database, a relationship created that is touted but quite relative for the majority of brands which have won fans through ads and promotion.

By simplifying mobile advertising, Home addiction could be even greater.

So be careful to build your strategy and use the tools for what they are.

In conclusion

The adoption rate will obviously be particularly interesting to follow!

Personally, I obviously find it hard to understand that we can choose to add an overlay to Android that will necessarily make it slower and more likely to crash, let alone allow a commercial brand to offer you even more advertising.

The response from Google / Android will also be interesting to follow because it is the first time that Facebook will attack Google so much on its own ground.