Facebook: 'Can We Speak in Private?'
Quarter after quarter, Facebook's user base continues to grow.
The company reported 1.56 billion daily active users in its recent quarterly earnings report, up 8 percent from the first quarter of 2018.
In total, Facebook estimates more than 2.1 billion people use at least one of its apps each day. An estimated 2.7 billion people access at least one of its apps once or more per month.
Did you know Facebook owns four separate apps?
As is the case with any business, though, becoming successful is only half the battle.
If Facebook wants its users to stick around, it must constantly evolve to give them what they want.
So what exactly do social media users want?
In Facebook's quarterly earnings call with investors last month, CEO Mark Zuckerberg said there is an increasing demand for private communications.
As a result, he said Facebook will make privacy a "central focus" for at least the next five years.
"Facebook and Instagram have become the digital equivalents of the town square where you can do almost anything you want with lots of people at once," Zuckerberg said.
He continued, "Today, people increasingly want the intimacy of connecting privately as well. So I think there also needs to be a digital equivalent of the living room—a platform just as built out with all of the ways you'd want to interact privately."
Let's take a look at key features within the Facebook app family that work to deliver private communications, and how they're evolving.
Stories refer to content—photos, videos or messages—that automatically disappear after 24 hours.
The concept was pioneered by the popular app Snapchat in 2011.
In 2016, Instagram adopted the format alongside its traditional news feed. And after being introduced in 2017, Stories are now becoming increasingly-popular on Facebook as well.
Stories is so popular on Facebook, in fact, that executives predict Stories activity will surpass that of the traditional news feed some time this year.
As a result, Facebook is taking steps to cater to users' budding preference for Stories.
Last month, developer Jane Manchun Wong revealed the social network was testing a news feed that integrates Stories, traditional posts and ads all into one horizontal-scrolling feed (see below).
Twitter user @wongmjane reveals news feed Facebook is testing
So why are Stories so popular?
A key factor is their impermanence.
Stories allow users to share their lives in the digital world without creating a permanent record of themselves, as is essentially the case with traditional news feeds (unless the content is later deleted manually).
The ability to share content with a temporary lifespan gives users a greater degree of privacy on social media. Once the "moment" is gone, it's gone forever.
As Zuckerberg put it, "You shouldn't have to worry about what you share coming back to hurt you later."
What does it mean for advertisers?
With Stories on the rise, Facebook is introducing new ways for advertisers to engage with audiences in that space.
During Facebook's earnings call, COO Sheryl Sandberg pointed to the March rollout of interactive Stories ads on Instagram.
Interactive content that encourages engagement—such as voting or asking a question—is already a popular feature of organic Stories on Instagram.
In its October campaign for its new Donut Fries, the Dunkin' brand proved Instagram's "polling" sticker can be effective in paid Stories ads as well.
The Dunkin' ad featured a simple video and polled viewers on the question, "What's your favorite American classic?" Viewers then had the option to vote for either donuts or fries.
Dunkin' Donut Fries polling ad, designed by BBDO Worldwide
Overall, 20 percent of users who viewed the ad participated in the poll, according to Instagram.
An A-B test between that ad and another without the poll found that the strong engagement drove down the poll ad's cost per video view by 20 percent.
The Dunkin' brand's success advertising with Instagram's polling sticker proves the approach could be a viable option for other businesses to experiment with.
Another key component of Facebook's privacy-push relates to messaging.
It's Facebook's apps Messenger and WhatsApp that allow users to connect one-on-one or in small groups in the "digital equivalent of the living room," as Zuckerberg put it.
While these apps allow for private communications, Facebook wants to make sure these communications are protected by secure technology.
He said a top priority will be implementing end-to-end encryption to ensure nobody (not Facebook, the government, etc.) can get ahold of people's private conversations within Facebook's apps.
End-to-end encryption is already a key feature of WhatsApp, and Zuckerberg said it should now be applied to Facebook's other apps as well.
What does it mean for advertisers?
In a word: nothing.
Facebook says it doesn't currently target ads based on users' private conversations.
Suppose you're using Messenger to discuss the new Nike sneakers you're interested in. Theoretically, Zuckerberg (claims) Facebook wouldn't serve you Nike ads in its apps based on this information (unlike things you do publicly).
So basically, advertisers wouldn't be losing access to targeting data that they have now. Nothing would change.
The third focus for Facebook as it relates to privacy is commerce.
"Commerce" actually applies to two features Facebook has introduced in its apps (and continues to develop): mobile payments, and shopping.
Forbes recently reported WhatsApp plans to hire roughly 100 workers in London and Dublin, Ireland to lead development of its new mobile payments feature.
The feature would make WhatsApp similar to Chinese apps Alipay and WeChat, which allow users to send friends money and even pay at businesses using their smartphones.
The apps are so popular in China, society has essentially gone 'cashless' in the country's large cities.
Zuckerberg said during Facebook's recent F8 conference that WhatsApp is working to launch its mobile payments feature in several countries this year following an initial trial in India.
In March, Facebook began testing its new Checkout feature on Instagram, which allows users to purchase products they see in Stories or posts without leaving the app.
A screen-by-screen look at Instagram's new Checkout process
According to Instagram, the following brands participated in early-testing of the Checkout feature:
Anastasia Beverly Hills
Oscar de la Renta
What does it mean for advertisers?
When it comes to Instagram Checkout, the feature looks to be a highly-lucrative tool for brands.
According to Digiday, Adidas's first quarter sales increased 40 percent on a year-over-year basis. Adidas CEO Kasper Rørsted credits its Instagram partnership as being a major growth factor.
"There was no doubt that Instagram had a positive impact for our online business in the first quarter," he said during Adidas's March earnings call. "Product launches and Instagram's Checkout tool were the two most important things for our online sales business in the first quarter."
It will be interesting to see if smaller brands can replicate the success of those like Adidas once Instagram rolls out Checkout on a broader scale.
Despite the increasing demand for privacy in our digital lives, Zuckerberg said during the Facebook earnings call he does not expect public social networks to ever go away.
"I expect the digital town squares like Facebook and Instagram will always be important and will only continue to grow in importance," he said. "There's a lot more to build there."