Following the largest single-day stock drop in history, Facebook CEO Mark Zuckerberg plans to shift the company’s focus to growing short-form video.
During a company-wide virtual meeting, Zuckerberg communicated this plan to Facebook employees.
The stock price of Facebook’s parent company, Meta Platforms Inc, fell by more than $200 billion dollars this week after the company reported significant losses in its quarterly earnings report.
Not only did Facebook’s expenses exceed its revenue, but it also saw a drop in daily active users for the first time.
Between the third and fourth quarters of 2021, nearly half a million people stopped logging into Facebook every day.
Investors panicked after learning the specifics of Facebook’s quarterly report, causing the stock to plummet.
What caused this to happen?
TikTok is to blame for the decline in daily active users, according to Zuckerberg.
In explaining his company’s poor performance, Zuckerberg cites TikTok’s “unprecedented level of competition.”
Meta’s inflated expenses this quarter are due to the company’s long-term vision for the future.
Meta is on a spending spree in an attempt to make the Metaverse the next big thing, an investment that has yet to pay off.
Meta is losing money from advertising, in addition to incurring higher expenses. According to reports, Apple’s App Tracking Transparency feature is reducing ad revenue.
The feature, which was introduced last year, restricts iPhone apps’ ability to track user data.
This reduces the targeting capabilities of Facebook ads, resulting in lower user engagement.
Less engagement means advertisers will spend less because they are not getting a satisfactory return on their ad spend.
The combination of higher expenses, lower revenue, and user loss resulted in a massive drop in stock price.
What Does All of This Mean for Facebook?
In the absence of a solution to its advertising problem, Facebook has turned its attention to the TikTok issue.
Facebook will compete with TikTok by focusing on short-form video as its primary draw.
According to reports, the company is now focusing on Reels, a TikTok-inspired video feature available on Facebook and Instagram.
In a conference call with investors, Zuckerberg stated:
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long term.”
Since 2020, Instagram has been aiming to become a video-sharing platform, and it appears that Facebook is following suit.
What Does All of This Mean for Marketers?
According to the writing on the wall, video is the future of social media marketing.
TikTok is thriving, Instagram has prioritized video for over a year, and Facebook is now shifting its focus to video.
According to the company’s most recent earnings report, Snapchat is making a profit for the first time.
Social media users have made it clear that they want to go to places where they can get a lot of video content.
It is now the responsibility of social media marketers to meet the demand.
If video editing and production aren’t already in your skillset, they should be.
If you aren’t keeping up with the latest video trends, you should start.
On social media, a combination of text and well-crafted images used to be enough to capture an audience’s attention.
Adding video to the mix is almost a requirement these days.
Fortunately, there isn’t a high bar to clear in terms of production.
TikTok and Reels are both built around vertical videos, which anyone can make with their smartphone.
Learn more from Social Media.