No fingers on the button: ad supremacy is over for Facebook
Facebook is disappearing. To be more precise, the ‘Login with Facebook’ button is disappearing.
As you surf the internet, keep an eye out for a startling phenomenon. Facebook is disappearing.
To be more precise, the “Login with Facebook” button is disappearing. For nearly 15 years, the little blue button was there on the sites of shops, newspapers, streamers and dating services. It reduced the friction of buying or subscribing or enrolling for, well, virtually anything. Who wanted to fill yet another “sign in” page when, instead, you could just click the Facebook button and the social media giant would sign you in using the credentials it already held for you?
It was brilliant engineering from Mark Zuckerberg. By making life just that tiny bit easier, he got to see what you bought and where and for how much, then to feed that data back into his $US120bn-a-year ($177.2bn) ad machine. But after years of scandal and privacy breaches, people stopped trusting Facebook. And so, in increasing numbers, they have begun opting for inconvenience, manually punching in details.
Companies have begun to respond, too. Nike, computer giant Dell, and Tinder-owner Match are among a growing roster of big companies that have quietly removed the Facebook login from their websites. Dell said this month that customers were using it much less amid data security and privacy concerns.
This does not signal the death of Facebook or its parent company, Meta. Its apps, including Instagram and WhatsApp, are used by three billion people each month, and the company brought in $US118bn in ad sales last year – a 30 per cent rise. Yet when it reports earnings next month, another sales fall is expected after revealing its first-ever drop in July.
Apple has exacerbated its woes. The iPhone maker launched a privacy push in the form of a new anti-tracking prompt that appears on its 1.8 billion devices when anyone opens an app, including Facebook and Instagram. Most people have opted out, starving the company of vital data. At the same time, Apple is building an ad business of its own, allowing companies to buy space at the top of search results in its App Store. An ad executive told The Sunday Times earlier this year that there was “an audible sucking sound” of ad dollars out of Facebook into Apple.
Facebook has also raised ad prices. Meanwhile, the outcomes of those ads, such as resulting sales, had “deteriorated significantly”, said retail consultant John Squire.
Those stumbles have opened the way for a deluge of new rivals. The biggest is Amazon, which last year brought in $US31bn in sales of ads from companies paying to be at the top of product search results. Walmart, meanwhile, has quietly built a $US2bn ad operation.
But perhaps most worrying for Zuckerberg is that Reels – his short-form video feature aimed squarely at slowing TikTok, Facebook’s fast-growing rival – is not working.
Internal data leaked to The Wall Street Journal showed that users spent 10 times more time on TikTok than Reels.
TikTok is wildly popular with young people, and without the next generations to backfill its ageing core audience, Meta’s primacy in the ad business would fade. Squire said: “Their strategic high ground is being eroded by multiple different players.”
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