I think Facebook will be viable in perpetuity for a very long time and I’ll explain why.
In the meantime, many people are asking, “When will Facebook die?”
In Australia there’s about 70 billion dollars still spent on television advertising but no-one is watching TV.
I’ve just done a tour around Australia speaking to around 4,000 people. Every session I surveyed the 400 to 500 hundred audience, asking “Who watches free to air television?” Each time there was less than six hands go up.
Then I asked, “Now keep your hands up if you watch the ads”, now only half kept their hands up.
So, in the capital cities we went to in 2018 there was only a few people that actually watch live free to air television – and the commercials.
The bulk of the others are watching pre recorded television where they fast forward through the ads, or they’re on Stan, Netflix, YouTube, or iTunes.
So that approximate 70 billion dollars spent on advertising in Australia (it may include print as well) is a lot of dollars. Especially, when you think of the eyeballs on it is dramatically decreasing.
You’ve got TV stations going bankrupt, radio stations consolidating, magazines that are shutting down on mass. No sh*t sherlock!
The bright eyed and bushy tailed chief marketing officers and CEO’s need to start waking up and realising people just aren’t watching or listening much to commercial television or radio.
The big shift
Once they realise this, there’s going to be an enormous amount of money and budget shift over to Facebook ads and Instagram ads.
When that shift happens that’s going to price every other motherf*cker out of the market.
Right now, there’s 60 million active business pages on Facebook – that’s not a lot when you consider how many businesses there are on the planet – and only six per cent of those pay for advertising.
Right now Facebook is getting more expensive every day. And the reason is the corporate guys are realising they’re not getting the bang from their buck that they used to or need from TV ads. As a result they’re shifting their money over to the social media platforms where they’re going to get a little more bang for their buck, which will make the advertising costs on them more expensive over time.
The golden age of Google adwords
I often think of the golden age of Google adwords in 2003 when I loved Google adwords.
I was paying three to five cents a click. My average acquisition cost per lead was about 60 cents. So just give the money to adwords, they give you leads and you do this all day long. You convert those leads into sales, happy days.
Now my bid for those same keywords is 65 to 70 dollars plus!.
My average cost per lead is $240 and so – I don’t advertise on Google adwords anymore. Now that so many of the bigger businesses are on board it has skyrocketed the costs. The bid for those keywords now is up to $240 dollars. I could get a hundred leads off Facebook for that. So for me it’s an absolute no brainer to adjust where my marketing spend goes.
Right now Facebook is incredibly viable… and it’ll continue to be incredibly viable. I give it a viability window of three to five years before we start to see significant shifts.
We are seeing some shifts now.
One shift is that Facebook is making it a lot harder to target people and this creates problems for us as advertisers because we’re not able to target people as effectively, which makes achieving cut through harder.
This highlights the importance of creating audiences.
So, although the targeting tools maybe becoming more restricted on Facebook, the cool thing is, audiences aren’t. You can now build your own audiences through the use of content, and this is what I love about video.
Publish video and if people are watching 30 or 40 per cent of that video, you can re-target them with more video, and if they’re interested in that content too, you can target them again.
That proves that they’re interested in that content.
You re-target the same person with five different videos all around the same topic and you end up with a very high qualified warm audience that you can then start marketing to.
So, the targeting features may be becoming more restricted but the ability to build audiences is where it’s at.
For me, that’s where the magic is, that’s where the money is.
So Facebook right now is still very viable but you’ve got to build audiences and know how to use the platform. As the platforms evolve and so must we as users.
People fall down with Facebook if they’re relying on paid advertising, this will only get you so far.
The real value in Facebook is when you get a really strong content strategy, combine that with a really targeted audience ads strategy, and you get magic and you’re able to make lots of money.
It’s the people who produce content that are going to win.
So just produce content – easy as.