Facebook recently enjoyed its 14th straight quarter of beating earnings expectations. The company has only missed earnings one time since it went public in 2012. Its stock (FB) is up 14% this year and its mobile ad business is so massively successful that its revenue last quarter, $5.7 billion, was more than Facebook’s entire revenue one year before.
The company is flying high and doing a lot right. But there’s still room for improvement. Here are the changes Facebook must make in 2017 to continue its great success.
Handle its fake news problem
According to a May report from Pew Research Center, 62% of American adults now get their news from social media—maybe not all of their news, but at least some portion of it. And 66% of Facebook users say they get news on Facebook. That 66% portion translates to a staggering 44% of the entire US adult population. Think about that: 44% of US adults use Facebook as a news source.
That means that for all intents and purposes, Facebook has become a media company—yes, it’s a distributor of news, not a creator, but once you are a destination people turn to for news, you must reckon with that role and the ethical questions and responsibilities therein.
Facebook, of course, would prefer not to deal with those questions. At a conference earlier this year, when directly pressed on whether Facebook is a media company, COO Sheryl Sandberg said, “Facebook’s a platform for all ideas and it’s really core to our mission that people can share what they care about on Facebook.” Answers like that are beginning to look comical.
And after the US presidential election, Facebook can no longer practice the same misdirection when asked those questions. The influence of fake or misleading news posts shared in the Facebook news feed has been a major focus in the wake of the election. Using Facebook effectively also proved to be a key tactic for the candidates. (New York Magazine put it more bluntly than most, with the headline “Donald Trump won because of Facebook.”) CEO Mark Zuckerberg, who initially said it was “extremely unlikely” that fake news had an impact on the election, has at last begun to change his tune.
Facebook announced last week that it will begin “doing our part to address the issue of fake news and hoaxes,” testing a new feature, in partnership with five news organizations initially (Politifact, Snopes, FactCheck.org, ABC News and the AP), that allows users to flag a story as fake or misleading. If enough people flag a story, it will go to these outlets to verify. If the outlets deem it fake, a dialogue box will appear to users when they try to share those stories to their own pages. (Just this week, in a live video chat with Sandberg, Zuckerberg said Facebook is “not a traditional technology company” and “not a traditional media company,” but acknowledged that the social network is an “important part of public discourse.”)
This is a decent start, but Facebook is still clearly putting the responsibility on someone else. The dialogue box says it all: “Disputed by 3rd parties.” Facebook does not want to be in the business of fact-checking, and even this plan is something it never wanted to do. But it can no longer stay out of the news business.
In 2017, it will only grapple further with issues it has long avoided.
Decide what it wants to do with streaming video
According to reports this month, Facebook is planning to get into the original content game by creating its own television series. It’s yet another plan that makes it difficult for Facebook to say it isn’t a media company. The company wants to produce “scripted, unscripted, and sports content.”
This could be a success for the network, but only if it has a focused strategy. Facebook’s approach to streaming video—and to sports specifically—has lacked focus. This year, it allowed media outlets to stream the presidential debates; it rolled out a television and physical signage ad blitz around Facebook Live, encouraging everyone to broadcast their everyday lives; and it launched a new live sports-chat feature, , that went nowhere. In the past, it has streamed movies like “The Dark Knight” and broadcast a Cleveland Cavaliers practice live, for some reason.
What has all this amounted to? Experimentation gets attention, but it’s unclear what Facebook wants to become in the video streaming realm. (Twitter, which reportedly spent $10 million to $15 million to stream 10 Thursday Night Football games this year, is dealing with similar questions.) Does it want to be the go-to place for people while they are watching a sports event? Does it want to be a platform for original content? Does it want to be a hub of live broadcasts, where users, brands, and media outlets are all going live all the time?
In all likelihood, yes, yes, and yes—it wants to be everything. But a more narrowed strategy in 2017 around streaming video, and around sports features, would be wiser.
And speaking of video, Facebook had better get a handle on its own video metrics—fast. In September
In September, Facebook acknowledged a “discrepancy” in the video viewership data it gave to advertisers. In December, it announced that it had reported faulty Instant Articles traffic numbers to publishers, and blamed a bug. The repeated errors in data reporting has led the Association of National Advertisers to call for heightened auditing of Facebook’s metrics, and the Media Rating Council to approach Facebook about auditing its metrics.
Problems in Facebook’s reporting of its own metrics may seem like an insidery issue, but it has major significance to how much trust advertisers can put in what Facebook tells them. As it ramps up all manner of video, it must get a handle on how it measures viewership of those videos.
Make the chat bots better
At Facebook’s F8 developer conference this year, Zuckerberg touted the company’s new open API for companies to build chat bots that run on artificial intelligence and live inside Facebook Messenger. “We think you should just be able to message a business in the same way you’d message a friend,” Zuckerberg said.
That sounds pretty good. And more than 15,000 bots already exist in Messenger, from publishers like BuzzFeed and CNN to retailers like Target and Whole Foods. Uber has a bot, 1-800-Flowers has a bot.
There’s just one problem: there’s no compelling reason to use the bots. Brands are building them, but consumers aren’t using them and are largely unaware they exist. Based on testing by Yahoo Finance, the bots are clunky and do not at all feel “human.” The majority of them simply aren’t useful.
Facebook now boasts more than 1 billion users on its separate Messenger app, and it continues to push the bots publicly as a value add. But the value isn’t there yet. If Mark Zuckerberg is so bullish on bots, he must make them must-use for the Facebook faithful.
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Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.
Read more:
Yes, Facebook is a media company
The good and bad of streaming the debate on Twitter and Facebook