This Is How Facebook Will Achieve the Next Billion Users

Prasant Naidu
Prasant Naidu Founder, Lighthouse Insights

Posted on May 1st 2014

This Is How Facebook Will Achieve the Next Billion Users

Facebook India 100 Million peopleFacebook – the mobile first company in its latest Q1 2014 earnings call stated that total user count is up 4% from 1.23 billion total monthly users, total daily user count is up 5.9% from 757 million, and daily mobile user count is up 9.5% from 556 million. Facebook is the undisputed leader in the social networking space globally; back in India it revealed a new milestone that the network crossed 100 million active users on March 31st 2014.

India is the second country to achieve this feat after US. Adding more meat to the numbers, Javier Olivan, Vice President, Growth & Analytics, Facebook informed that 84 million of its 100 million users in India access the social networking site from their mobile devices which include mobile and web usage.

The growth has been a remarkable one from 8 million users when it had first set up its office in Hyderabad in 2010. The ambitious social networking giant is now aiming for 1 billion users in India, a numerical figure it intends to chase with specific initiatives aimed at increasing connectivity, affordability and relevance. “That (1 billion) is a different focus and challenge,” Olivan says.

Improving data networks

Facebook realized pretty early that the future is mobile driven and its next billion users will come from emerging markets like India where internet penetration has been a challenge. India till date has less than 13% people accessing the internet. To overcome this problem and jump the red tape of government bureaucracy, Facebook launched project Internet.org that promises to bring internet to two-thirds of the world’s population that doesn’t have it.

With Internet.org Facebook wants to change three process frameworks, informs Preetham Venkky, Business Head, KRDS Asia. “One is increasing the data availability across the world, second is content compression on the network resulting into faster loading and third is the free and ubiquitous availability of the network via mobile.”

While Preetham considers the balloon project of Google as a PR gimmick, he states that the real network capabilities come from the real last mile company which is the telecom operators. However with time the consumption patterns of consumers have changed from what it was back in the nineties.

Earlier it was more voice and bit of message but today consumption is moving towards data driven. “Today I am not going to call you via the standard dial phone but will actually call you from Skype or Viber. So almost all the consumption is data driven and not voice driven,” adds Preetham while informing that Facebook is closely working with telecom operators to move from voice to data.

3G network is yet to see great success rates in even developed countries, so to drive accessibility Facebook has now revealed its plans to bring Internet to the third-world via drones, satellites, lasers, and more. Mark Zuckerberg, last month, stated that Facebook’s Connectivity Lab will work on the Internet.org project going forth.

Both Connectivity Lab and Internet.org will be working in tandem to accomplish the mission of Facebook to bring internet to the 5 billion people who currently lack it. Internet.org, a partnership between Facebook and telecom industry giants like Nokia and Qualcomm, hopes to use these air- and space-borne methods to bring Internet to the needy.

Simultaneously, Facebook has tied up with FMCG giant Unilever for the Internet.org project. As part of the tie-up Internet.org and Unilever will carry out a comprehensive study to examine the opportunities to increase Internet adoption in rural communities. Apart from infrastructure and cost, which are known barriers to connectivity, the partnership will carefully evaluate other educational and cultural factors that also limit Internet use.

Both Unilever and Internet.org will leverage this research to inform the development of a series of on-the-ground projects with the aim of improving lives in rural India through better connectivity.

In fact during the recent acquisition of WhatsApp for $19 billion, Mark had shared that he wants the app to be the dial tone of the Internet. He also informed that the messaging app at some point will fuel the ambitions of the Internet.org project.

Content compression

Discussing on the efforts being made on content compression, Preetham adds that Facebook is currently working with Akamai, a content delivery network to work on the problem.“Akamai has a box with every ISP, so the standard labels get loaded by default along with a shell or skeleton of the news feed which comes from the box. And in the next half a second the content gets loaded in the news feed,” he adds.

The primary goal of Facebook is to improve the data network first and then reduce the load time of the network so that data costs are limited for a user.

Make the network free and ubiquitous for mobile

Preetham informs  that Facebook has already found some success in Philippines, where the social network has been made completely free forever. Facebook has worked with telecom operators in the country with the ranges of three and five years with an interesting model. So Facebook works actually for free but it could be such that if a user clicks on a YouTube video then the telecom operators throw a pop up to inform that accessing the additional content will be at a price. With this model Facebook remains free and operators also make money without forcing Facebook to negotiate with each and every operator.

Preetham thinks that the model has been successful in Philippines and sees no reason why it can’t be carried to other emerging countries where Facebook has become the starting point for content consumption.

Feature phone and Android support

Facebook is also one of the early networks to come on feature phones. In 2011 U2opia launched Fonetwish which allowed users in emerging markets to access Facebook on basic phones without any data plans. In India, it is available to almost all mobile phone users, except those who are using network of BSNL.

In fact in the same year Facebook had acquired Snaptu and integrated its technology to build a ‘Lighter’ Facebook for the developing market which has a dominance of feature phones. The Facebook project– “Facebook For Every Phone” had announced in mid 2013 that there were more than 100 million people using the technology and getting accustomed to the world of social networks. The app that enables people around the globe to connect to the people on Facebook without having to purchase a smartphone, had seen acceptance from markets like India, Indonesia and the Philippines.

FACEBOOK-FOR-FEATURE-PHONE

Preetham thinks that Indian mobile companies like Micromax are changing the game by launching Android phones for less than $100 and bringing the experience of Facebook on it.

So these are the four predominant things that Facebook is focusing on to move from the 100 million mark to the one billion figure. Preetham labels that as a visionary and a scalable model from Facebook.

Challenges

While Facebook remains free for its users, it makes the biggest chunk of revenues from ads by keeping marketers happy too. In Q1 2014, total ad revenue hit $2.27 billion, up 82% from a year ago with mobile ads made up 53% of ad revenue in Q4 2013.

But looks like marketers aren’t pretty happy with Facebook is changing the way it allows brands to communicate with their target audience. With organic reach dead, advertisers will therefore have to be prepared to boost posts with paid support as well as put money behind generating new fans.

Tripti Lochan, CEO at VML Qais sees that the challenge is also to ensure that this is done in the most cost-effective way possible. “The more engaging we can make the content we generate for our clients, the better the ROI will be for any advertising budget allocated to this channel.”

However, Sandip Maiti, CEO at Experience Commerce who spoke to us recently on the dying organic Facebook reach finds the move to be encouraging. Brands who have built their fan base organically need not worry; it is worth paying to reach that organic fan base.

“I am certain those who have spent money to buy their likes (and fan base) are a worried lot for obvious reasons, which I don’t need to spell out,” Sandip had said.

Another point on the wishlist of a digital marketer is improved targeting, especially when it comes down to socio-demographic targeting. Tripti informs that, “If we can get more granular in our approach to acquiring new fans then we can drive a far better engagement through advertising.”

However, Preetham thinks that marketers not only in India but in the SEA region are slow to react and are still not clear in their objective. “If objective is clear then achieving Facebook marketing excellence is not even an argument anymore. For marketers Facebook now provides the largest medium in terms of reach after newspaper and you have the nimbleness of a targeted reach which cannot be ignored anymore,” he adds.

With smartphones proliferating at its all time best in the country, Facebook won’t have adoption problem in India but at the same time it needs to continue to educate marketers and set their expectations right.

The latest Facebook Business Manager roll out should bring some respite to marketers.

Prasant Naidu

Prasant Naidu

Founder, Lighthouse Insights

Founder and Blogger at http://lighthouseinsights.in, Indian social and digital media news.

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