How Facebook Will Find Its Next Billion Users
Facebook crossed the billion-user threshold last week but where it finds its next billion is a tough question, especially since the world's largest internet market, China, is still closed to the social network.
Facebook's mature markets are saturated. In the U.S., for example, 61% of the 65-and-older population visited Facebook in August, while 87.3% of the 18-to-24 set did, according to ComScore. It's hard to imagine those numbers getting much higher. Growth has slowed to 2% a month.
For Facebook, Japan qualifies as an emerging market, as does South Korea. Just 27.6% of each country's internet users are active on the platform, according to ComScore.
In Russia, where collective traffic to native competitors VKontakte and Odnoklassniki exceeds Facebook's by a factor of 10, according to data from the research firm TNS Global, the company is being upfront about its aspirations. CEO Mark Zuckerberg spent last week in Moscow, where he hosted a competition for developers to build Facebook apps tailored for the Russian market.
While it might appear that Facebook has already conquered markets such as Brazil (where it surpassed once-dominant Orkut last year) and the Philippines, millions more are likely to come online there in the next several years and will be apt to share their fellow citizens' appetite for Facebook. Those users are more likely to access Facebook on mobile phones, which is why it's playing furious catch-up on mobile apps and ad products.
Advertising may play a part in recruiting the next billion users. Working with Wieden & Kennedy, Portland, Ore., Facebook unveiled its first brand ad last week. While head of consumer marketing Rebecca Van Dyck emphasized that the ad -- which doesn't mention the milestone, but instead reaches for poetry with vignettes about people feeling connected to each other -- was made for existing users, she also acknowledged that it contains a message for nonusers, even without a distinct call to action.
"We feel like we need to be more respectful and introduce ourselves and to say, "This is what we believe in' and "Come onboard,'" she said. "Or even, "This is what we stand for, and if that means you feel great about liking your cousin's photo, then great, do that .'"
Ms. Van Dyck noted that the purpose of the ad isn't to promote growth. "Our numbers are widely healthy, so no, part of my remit isn't to get either new users or to get young users or to change perceptions of young users."
Facebook plans to distribute the spot using its own ad products, and the 13 markets selected shed some light on where the company thinks its next billion users could be, even if it's not being overt in its messaging. The ad will be promoted in the U.S., U.K., France, Germany, Italy, Spain, Mexico and India, as well as in what Facebook hopes are markets fueling future growth: Indonesia, the Philippines, Brazil, Japan and Russia.