Facebook has instituted plans for a large spending outlay in an attempt to revamp its image with its users.
This comes on the heels of survey data from third-party consultants that show declining time spent on Facebook and Instagram among U.S. users. The WSJ, in writing on the issue recently, indicates that it’s their belief that even though the company has “made a fortune selling other companies’ ads,” it’s possible that their own brand investments may not pay off. In an interview with the Journal, Facebook has related that in an effort to “secure its user base for the long-term,” it could more than double the advertising spending over the next two to three years by developing a new focus on direct-to-consumer ads. This effort is an addendum to the billions that the company has already spent to win back the trust of its advertisers and users, following last year’s privacy breaches and data concerns. The WSJ continues with their analysis: “Despite investments, analysts estimate Facebook’s legacy platform will continue to lose its allure” adding, “at this point, trust might be something [that] Facebook can’t buy.” Facebook company representatives say that its new ads will be heavily focused on increasing the value its platform can provide to existing users. This is apparently consistent with the company’s planned launch of its cryptocurrency effort where the belief probably is that the more time the users spend on the site, the more money they’re likely to spend. According to analysts, not only has the daily average that users spent on Facebook declined in the U.S. over the past year, but also in the U.K., Germany and France. And, in the U.S., time spent on the core Facebook and the photo and video-sharing program Instagram, was sequentially less for both apps. The change to ramping up its ads is a significant change for the company, which for the first time will rely on direct-to-consumer marketing across all its brands. It’s estimated that Facebook spent around $382 million on ads in the U.S. last year. And, while that’s a change for Facebook, it’s still far less than other internet players like Google and Amazon spend. Time will answer the question that’s currently being posed: “Whether Facebook, by spending more of its own dollars, can entice jaded users to spend even more of their time and money on the site.” I’d guess that the answer is reliant upon how compelling the sales pitches will be.