Navigating User Growth in a Post-Facebook World
As more information comes out about Facebook and its role in the spreading of disinformation and profile harvesting, many major long-term questions remain unanswered. But one in particular has the marketing world scared: is the distrust of social media here to stay?
Many digital-first companies in the last decade owe much of their success to tapping into and leveraging Facebook as their core marketing strategy. The use of Facebook’s powerful lookalike audience features, its unparalleled user demographics database, its algorithmic approach to multivariate testing and its offsite pixel-tracking capabilities have made it by far the dominant advertising platform.
But the unfolding events suggest there is a now a non-zero probability of a secular backlash against social media. As Recode’s Kurt Wagner says: “Facebook has dealt with these kinds of firestorms before. But this time feels different. Users are fed up. Politicians are fed up. And investors are clearly concerned: Facebook has just had its worst two-day stock performance since 2012, the year the company IPO’d. It has lost more than $50 billion off its market cap.”
As a growth systems thinker, I like to assess all possible scenarios, high and low, when assessing risk and strategy. Let’s play out the worst case: we see an onslaught of social media distrust by users and politicians. In the short-term, this crisis of public distrust may lead to a) users slowing their user engagement with Facebook and other social media platforms, or b) users shifting their social media consumption to alternatives (i.e. from Facebook to Instagram). In the medium to long-term, as fears of data privacy and disinformation persist, users may go from lower engagement to no engagement. This shift in user behavior may even create an opening for new or existing social media companies that prioritize transparency in privacy and security measures (i.e. decentralized blockchain-based social media platforms). Politicians like Mark Warner, the top Democrat on the Senate Intelligence Committee, are already calling for public hearings on Facebook and potentially other major social media players. Restricting Big Tech could become a fixture of the 2018 midterms.
I am seeing a few other trends (discussed below) that, when stacked on top of each other, suggest the traditional path to user growth (i.e. scaling via spending on social media channels) will be even harder. While the likelihood of the above scenario might be low today, if we are at the start of a secular backlash against social media, growth for companies is going to be extremely tough with current paid user acquisition strategies. How should companies navigate user growth in a post-Facebook world?
This potential sea change in our industry provides an opportunity for us to take a step back and rethink our approach to marketing and user growth. There is no silver bullet or one-size-fits all model; instead, we need to be more responsive to people’s everyday actions outside of their social media usage. Constant hypothesis-driven testing and validation will help you understand your company’s distinct user growth strategy. Here are three approaches to smart user growth.
1. Primary Research. The law of shitty click-throughs and an emerging user distrust of Big Tech will require a more creative growth mindset.
Paid user acquisition channels come and go so frameworks to unlock user growth need to be adaptive to changing contexts (see James Currier’s perspective on the history of fleeting growth channels and slide below).
Primary research is critical, especially in times of secular shifts in user behaviors. In The Culting of Brands, marketer and activist Douglas Atkin studies cult-like brands and religious organizations to understand the drivers of unwavering loyalty. He refers to French researchers Bernard and Veronique Cova’s work on tribal marketing and the doctrine of piggybacking. He writes, “they hold that marketers should consider their product or service from the perspectives of its ‘linking’ value to a community rather than its ‘use’ value. Marketers need to ask how their brand can best support a community versus simply how the product is delivered and used by individual customers.”
By bringing in elements of ethnography, companies can develop highly innovative growth strategies to unlock deeper user growth. Ethnography allows companies to immerse themselves in the culture, environments and habits of their users. Seemingly small insights — like habits around daily news consumption or morning rituals — can lead to new ways of building a deep connection. Ethnography helps companies understand the signs, symbols and language of communities. Start a listening tour. Go where your customers are, location by location, and live and breathe their everyday habits through onsite user interviews or mystery shopping. Find ways to engage within those preexisting experiences and build powerful feedback loops.
2. Underserved markets. As we enter the later stages of the smartphone s-curve and await the acceleration of new s-curves — see Carlota Perez’ technological surge cycle — the biggest opportunity for value creation is around building tech-enabled solutions for historically underserved customers.
Access to technology is not equal within and across countries (see the US’ digital divide). And culture and identities are not equally represented in the digital world (see journalist and artist Surya Mattu’s work on machine bias). In a world of uneven technological adoption rates, a one-size-fits-all model for user growth makes increasingly less sense. Many investors, including GGV’s Managing Partner Hans Tung, see mass market-first strategies as the new path for user growth: “Unlike the first wave of late 1990s (Internet companies that targeted higher-income consumers who could afford expensive computers), today’s startups can quickly reach billions of middle-income consumers who only need a simple smartphone and low-cost data plan to get online.”
Based on the ethnographic work mentioned above, segment prioritization becomes more critical than before. companies can leverage their learnings to identify and solve for the most underserved segment that already exists in their user base. Companies that understand how to observe and connect existing low-bandwidth digital user behaviors to analog unmet needs will see massive gains in quickly identifying and scaling tech-enabled solutions. With rising CPMs on Facebook as well as the threat of declining engagement levels, searching and uncovering viral growth built on top of low-bandwidth existing behaviors increasingly makes more sense.
3. Holistic user experiences. It is increasingly easy to build software. Now, the real value is in finding and retaining customers.
Growth is not just paid user acquisition; it is a systems-based approach to building and scaling end-to-end user value efficiently and effectively. Companies that succeed during major shifts in marketing environments work holistically to improve their user experience across retention, virality, onboarding and user acquisition. By building and optimizing end-to-end experiences for the most underserved segments, companies can focus on scaling more of the newly identified segments to grow their product usage further. This requires an interdisciplinary approach to user growth that blends agile development, human-centered design and performance-based marketing. Identify the biggest drop-off points and key levers in your user journey and deploy the necessary tools and frameworks to rapidly test and close the gap. Holistic thinking of LTV, CPA and user experience will differentiate the winners from the losers.
Regardless of the size of a #deleteFacebook movement, the status quo approach to user growth needs a thorough reassessment. The unfolding events around Facebook should act as a wake-up call to marketers. The reality is that it is already tough to grow a business on Facebook. The non-zero probability of a social media backlash will only exacerbate and hasten this trend.
Now is an exciting time to explore new ideas and debate strategies. Companies that are open-minded and adaptive in their user growth strategies today will be poised to build a long-lasting growth engine.
About the Author
I’m an experienced product manager, growth thinker and startup advisor. I work with passionate founders, helping them uncover core user value at scale & build a strong growth engine.
I was Head of Consumer Product & Growth at Dia&Co, a personal styling service for women sizes 14+.
I run office hours to provide free advice on growth systems for companies, projects and NGOs.