Facebook Live more valuable than Messenger?
Facebook doubling-down on Live this week is one for the history books.
That’s one small step for social media, one giant leap for the Live Era.
After following the coverage, I think we’re underestimating how valuable Facebook Live is.
For perspective, i’ll put Live in the context of Messenger — another valuable product the company is heavily investing in.
Messenger is a juggernaut, 800 million users strong. Even ranking higher in the App Store than Facebook’s flagship app. What’s more, Messenger is a platform that developers can build on top of.
We can talk at length about the Facebook Live announcement.
But there are two 🔑 takeaways that best illustrate it’s value:
- Facebook Live is monetization ready and enables the capture of valuable TV advertising dollars
- The product is central to the mobile app — literally, with a dedicated tab “front and center”
Fundamentally, this product is about revenue and attention.
1. Just add monetization
- Almost all of the Western world is on Facebook. Today the company thinks as much about value extraction as user growth.
- Facebook Live is a canvas for new kinds of ad products. Before, Facebook’s primary use case of scrolling through a feed didn’t lend itself well to full-screen ads. Now with Live, Facebook can naturally slip in video ads alongside live content from your friends.
- Video ads not only generate ten times the revenue of other ad products, they allow FB to take advertising dollars away from linear TV increasing the company’s dominance over old media.
Unlike mobile messaging, which lacks a compelling use case for monetization, Facebook Live has natural moments to serve short video ads. Furthermore, it can leverage Madison Avenue’s comfort with video — in contrast to Messenger, whose revenue products will need customer education and space for an ecosystem to develop. Finally, surplus video inventory unlocks strategic value for the company as Facebook can now capture TV advertising dollars previously unreachable.
2. Location, Location, Location
- In August 2011, Facebook Messenger for iOS launched. For the next three years the app struggled to stay in the Top 100 ranks of the App Store. Today, Messenger consistently ranks near the Top 10.
- What happened? Short answer: Facebook’s massive distribution power. Longer answer: In July of 2014, Facebook removed mobile messaging but started linking to Messenger from a central tab in the main app.
- That same tab now points to Facebook Live. FB Live is now in plain view for more than one billion people every day. The product will experience a similar step change in adoption as Messenger did in 2014.
Facebook has given Live the distribution it needs for hockey stick growth by placing the front door of the product where Messenger used to be. Did other factors contribute to Messenger’s rise? Yes. But remember that at Facebook’s scale, even just a ten percent lift in discoverability can mean millions of new users. Most importantly, unlike Messenger, Live’s revenue generation multiplies the value of the premium placement — making future cases for “bumping” the tab harder to justify. As a result, Live is well positioned to remain front and center on our devices.
Facebook Live is one of the company’s first products to have monetization from the start. More special is the ability to steal TV advertising market share. The product now runs within a dedicated tab on mobile.
But is it more valuable than Messenger?
Maybe, maybe not — One thing is for sure: Live is about revenue and attention capture. And at Facebook’s scale that is immensely valuable.
Facebook Live launches over the next few weeks on iOS and Android. Expect a post from me looking at the mechanics and exploring how they compare to other live products.
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