Thursday, August 26, 2010

UK Facebook at saturation point

Following on from my recent post about the numbers and demographics of the total Facebook population in the UK, it was hardly surprising to read that various people are now saying that Facebook has reached 'saturation point' over here in the United Kingdom.

As I have been rather busy in the past weeks (a quick hat-tip to Social Media Influence for pointing out this useful article) I missed the blog entry from Robin Goad at Hitwise . It shows that for June 2010 Facebook now dishes up one in every six Internet pages viewed in the UK. It is also only second to Google in terms of visits, with 25 million of them (making up over half of all social media site visits).
Robin then went on to highlight that not only had Facebook's share of the UK page views seemingly stagnated at around 16 - 17%, but that since the beginning of 2010 the average time on the site has dropped from almost 30 seconds to a little over 27 seconds.

Now what does all this mean? Well, here's my thoughts:

1. This point was inevitable.
The astronomic growth in Facebook's (registered) user base cannot grow to beyond the total potential size of the target audience. For an island of 61.8 million people (with 38.3 million of them between 16 & 64) that's a huge percentage of the population covered.

2. Just measuring page views is too arbitrary
Facebook is not just a social media site for emailing and 'following' people. Its a platform for instant messaging, sheep throwing and even gaming (lets not forget that MafiaWars, Farmville and their ilk require constant input to stay in the game). If an activity or game becomes less popular (or 'sticky') this affects the number of page views of the site.

3. Its still about monetisation
Google may be second in page views, but its still top for visits and overall revenue. This is because Google's aim has always been to give people the most likely sites for the search term entered on the first page of results. In selling adverts alongside these results and encouraging the most relevant ones by making it cheaper to advertise them, Google recognises the value in delivering the least number of pages. It is this business approach that continues to give them the revenue it has done so far.

4. Facebook will develop and diversify
Its already decided to go after Foursquare's lunch with its own geolocation service (Facebook Places is currently only available in the USA) and the acquisition of location-based service Hot Potato. However it is also likely to further develop its gaming platform and could well try and push its way into the gambling sector in the USA (Especially should the 4 year old U.S. online gambling ban be revoked any time soon). Perhaps this is why Google has invested as much as $100 million in Zynga, the developers of Facebook games such as MafiaWars, Farmville and Texas Hold'em Poker.....?
Note:
Also check out Niall O'Malley's thoughts on where Facebook could go in this direction.

4 comments:

Unknown said...

does that mean if you use the FaceBook advertising segmentation tool, you are almost getting a accurate live marketing dataset of the UK?

Hayden Sutherland said...

Tristan

Not necessarily.
Just because 25 million UK people are Facebook users, you shouldn’t assume that’s a general representation of the UK population (it is only approx 40% of the total number). However, if you take it that 70% of households in 2009 had Internet access and this hasn’t changed:
http://www.statistics.gov.uk/cci/nugget.asp?id=8
… then you can say that Facebook stats are a more realistic view of those people as around 88% of them have a Facebook account.

Hoping this makes sense

Hayden

Niall O'Malley said...

Great post Hayden. One thing that I have thought about since my original post is the potential for Facebook to do something more sophisticated with planning trips / holidays and offline recommendations in general. It strikes me that it is a natural evolution of the core proposition to emulate / buy-into a TripIt-style crowd-sourcing model...and possibly another revenue stream (i.e. kick-backs from tourism players).

Hayden Sutherland said...

Niall
Thanks for the feedback.
Yes, we may well see Facebook buy up someone like Dopplr (or just create their own version) to get into the crowd-sourced travel market arena.
There's also the group buying concept (The Bank of Facebook) put forward by Thomas Power http://goo.gl/PITN which could be a very powerful area for them to develop.