Where is Mark Zuckerberg taking Facebook?
2021 could be a challenging year for Mark Zuckerburg. He will need to figure out where the growth for his business will come from. He also has to deal with lawmakers who are actively pursuing antitrust lawsuits against Facebook, and politicians condemn almost every move the company makes. There is also speculation that Zuckerberg might have to break his Facebook, Instagram and Whatsapp empire. Nevertheless, the legal process normally takes years. Zuckerberg also has an army of lawyers to drag his fight.
Another challenge he is facing is the change in customer privacy trend. Facebook makes a lot of money from tracking its user’s lives and use its sophisticated advertising system to make money from marketers. As more and more people become aware of their privacy threat, around 40% of Google Chome users chose to opt-out from the third-party cookie tracking. Google will also phase out the third-party cookies altogether in the year 2022, which raise a question about how Facebook would respond to its Facebook’s pixel tracking/remarketing program.
Like it’s not enough, Apple recently announced the changes in iOS 14 that will impact how Facebook receives and processes conversion events from tools like Facebook pixel. Facebook has said on its website “Businesses that advertise mobile apps, as well as those that optimize, target, and report on web conversion events from any of our business tools will be affected.” Apple’s policy will prohibit certain data collection and sharing unless people opt into tracking on iOS 14 devices via the prompt. As more people opt-out of tracking on iOS 14 devices, ads personalization and performance reporting will be limited for both app and web conversion events.
So, where is Mark Zuckerberg taking his company?
The success of WeChat (微信)
To find the answer to the above question, I need to share with you the prediction I did six years ago when I worked on an Asia expansion project. I had a chance to visit China and to work with many talented Chinese people. It was that time that I truly appreciated a new business model being offered by Tencent through its popular WeChat mobile application.
How can I describe Wechat for those who don’t know the scale of its success in China? WeChat is more than just a mobile messaging app. With more than one billion users each day, it dominates daily life in China. It isn’t just the default option for social networking and chats; it is also the leader in mobile payments; taxi, restaurant, movie-booking, retail, and even dating apps. These all open inside WeChat, providing a seamless and integrated service for upwardly-mobile Chinese users.
One of the reasons that make WeChat successful is that it offers varieties of useful functions within one app:
- Messaging
- Video calls
- Moments (like micro-blogging)
- Interest groups
- Online payments
- Official company accounts
- Advertising options
WeChat also functions as a media platform. It has service accounts and subscription accounts that can provide daily news and media information to users. It also allows businesses to integrate WeChat with CRM systems so marketers can nurture customers through a so-called WeChat funnel.
Source:Chooseoxygen.com
Another reason for WeChat success is its mobile payment function. This is what Facebook is working on to add the payment function to Whatsapp. With WeChat pay, users can
- Pay for shopping
- Buy items directly from online stores
- Purchase train tickets
- Pay for doctor appointments
- Pay rent and utility bills
I told myself six years ago that Westerners will eventually adopt WeChat model because it truly changes our lives in a significant way. It’s clear to me now that Zuckerburg is doing it.
Going from the public to private
Zuckerberg wrote a blog in early 2019 about his company’s strategy.
“I believe the future of communication will increasingly shift to private, encrypted services.” And, “This is the future I hope we will help bring about.”
It’s ironic to think that a company that makes 99% of its revenue from tracking user behaviours and sell ads to them would consider diversifying its business to a private messaging world. But if we think about it, Zuckerberg’s plan is a big ambition. He wants to create a new commerce ecosystem that has Facebook and Instagram as a storefront and Whatsapp as a customer service and cash registration engine. I can tell you that he is very serious about this strategy. Why? Facebook shared a stat that some 175 million people are interacting with brands on Whatsapp daily.
In addition, Facebook recently acquired an unknown company called “Kustomer”, a startup founded to disrupt the customer services industry with a new approach to providing agents with better data and a more unified picture of users by bringing together the many social media and other channels and long history between them and the company in question. The price tag was US$1 billion. This acquisition made the total spend for Facebook in the private messaging business to $26 billion (source: Bloomberg Businessweek).
According to Facebook:
“Kustomer is an omnichannel CRM platform that brings customer conversations from various channels together into a single-screen view. It helps businesses automate repetitive tasks so their agents can maximize the time and quality of interactions with customers. Facebook plans to support Kustomer’s operations by providing the resources it needs to scale its business, improve and innovate its product offering, and delight its customers. That way, more people will benefit from customer service that is faster, richer and available whenever and however they need it, whether it’s phone, email, web chat or messaging.”
I believe that in the end, Zuckerberg wants to create a massive ecosystem that everyone depends on it — the same way that WeChat did in China.
Conversational marketing
So… let talk marketing. What does it all mean to marketers? We use Facebook mostly for its advertising platform. We create a “look-alike” customer segments and target our ads to them. We use Facebook pixels to follow customers on their feeds and third-party websites.
The change in third-party cookies will make us rethink how we can get (or earn) customer attention. The trend in Asia is very clear; it’s all about one-on-one conversations through messaging apps. There is a term for it. It’s called “conversational marketing”. Why do marketers need to care? According to Drift (Drift.com):
- Only 43% of people answer cold calls. I think this is surprisingly high.
- The average email open rate has fallen to 20% or lower.
- The average landing page conversion rate is only 2.35%.
What conversational marketing does is it helps customers overcome a traditional online marketing method that forces customers to go to a landing page, fill out an online form, and waits to be contacted. In a nutshell, conversational marketing skips all those steps by using a real-time conversation. It is a big shift for businesses because they will have to reallocate resources from a service (or call) centre to have conversations with customers instead.
Facebook also has an eye in this marketing approach. It invests in chatbot and continues working on enhancing its bot to be more intelligent. We will see more and more businesses engage with customers through Facebook’s messaging ecosystem in the coming years. It’s already a big thing in Asia. Zuckerberg will bring it to you very soon whether you are ready or not.
