Social media giant, Meta, formerly known as Facebook, has hit significant turbulence as it suffered its biggest one-day wipeout.
Last Thursday saw the company lose more than $200bn off its market value. Meta CEO Mark Zuckerberg blamed Apple Inc’s privacy changes and increased competition.
What does Meta’s crash mean for small businesses that rely on social media to connect with customers?
Facebook loses users
Meta’s worst one-day loss followed a disappointing earnings report released on Wednesday.
On the same Wednesday, Mark Zuckerberg laid out how the company was planning to navigate the transition from social networking toward the so-called virtual world of the metaverse.
The earning report showed modest gains in new users across Meta’s family of apps, including Instagram, Messenger and WhatsApp. However, its core Facebook app lost around half a million users over the fourth quarter from the previous quarter.
Director of Digital and Growth at digital marketing solutions provider Localsearch, Adam Boote, said, “Even though half a million users have left the platform in the past three months, Facebook remains one of the biggest social media platforms currently in the market.
“It offers unparalleled opportunities for small businesses to communicate with existing and potential future customers, given the 1.929 million daily active users that use the platform.”
What does this mean for SMEs?
Social media has become a powerful tool for customer interaction. The online playground unites all demographics and offers free access to a vast audience of potential customers for any product.
With social media being crucial for business in 2022, how will Facebook’s decline impact SMEs?
Despite Meta’s turbulence, social media will continue to be the cornerstone of connection with many businesses’ potential and current customer bases.
“For small business owners who critically rely on social media platforms as a means of connecting with and selling to customers, we strongly recommend that they must be multi-approached with their marketing efforts,” Mr Boote said.
Looking forward, there will be an increased need for businesses to branch out and engage across multiple platforms.
Mr Boote continued: “The fall of Meta on Wall Street, albeit perhaps temporarily, is proof you can’t have all your eggs in one basket.”
Social media platform competition ramps up
So why has Facebook lost users? Mark Zuckerberg has long pointed to the Chinese-backed app, TikTok. The formidable platform has grown to more than a billion users because of its highly shareable and addictive short video posts.
Mr Boote continued: “With anything in the social media space, rivals will continue to release new features, functions and offerings in a bid to drive more users to their site instead. We’re seeing that with TikTok growing at a fast rate, and with plans for Meta to invest more thoroughly in their similar version of the video function, Reels – closely associated with Instagram.
“Meta’s plunge on the Wall Street being described as the ‘biggest one-day drop in history’ highlights that no matter how big a player you are in the technology space, anyone can – regardless of scale or size – experience difficulty, specifically when they try to innovate and attract new users while silencing their rivals at the same time.”
Facebook’s privacy and news wars
Facebook, now Meta, has had a difficult couple of years. The company has recently been plagued by scandal after scandal.
Last year, Apple introduced an “App Tracking Transparency” update to its mobile operating system. This update allowed iPhone owners to decide if they wanted to let apps like Facebook monitor their online activities.
Those privacy moves have damaged Meta’s business model and are likely to continue doing so.
At the same time, Australia’s Federal Government was pressuring the platform to pay publishers for news. In response, Facebook temporarily banned all Australian news from the platform. The move sent shockwaves worldwide and sparked a massive boycott push.
On top of multiple high profile legal issues, these issues have damaged the brand’s image.
Mr Boote said, “In the last year, SMBs have battled through Facebook and Google news bans where businesses were effectively banned on the platform, changes to privacy limits and iOS updates restricting advertising opportunities, and continued outages across platforms.
“Social media continues to be a dog-fight between all the heavy-hitters, but knowing where Australian businesses can operate effectively to speak to their closest customers remains paramount.”
Read more:The Age of Social Media: Here’s why you should invest in social media marketing
Read more:Facebook is now Meta, but what is the metaverse?
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