Review: Did Facebook lose half of its users in 2015-2017?

Screen Shot 2018-01-02 at 1.23.16 PMFour years ago in this blog, I spoke out against the (non peer-reviewed) study by Princeton’s Canarella and Spechler (2014) that Facebook would lose 80% of its users between 2015 and 2017 (http://arxiv.org/pdf/1401.4208v1.pdf). Always keen to verify such predictions, we can now evaluate who was closer to the truth.

  1. The facts: did Facebook lose half of its users?

In 2017, Facebook users topped  2.07 B globally, a 16% increase over 2016, which saw a 15% increase over 2015. Likewise, active users (logging in at least daily) topped 1.37 B, also a 16% increase over 2016. So, contrary to Canarella and Spechler, and consistent with my predictions, Facebook usage grew instead of declined over this period – see the above Figure by Statistica.

  1. The motivation: why?

My blog (https://analyticdashboards.wordpress.com/2014/01/30/will-facebook-really-lose-80-of-its-users-by-2015-2017/) listed 2 main flaws in the Princeton study:

(a) It is far-fetched to compare a social media platform to a disease from which you naturally recover. In marketing, (first) adoption of a new product (such as microwaves) has been modeled as a disease, but that does not mean that microwave sales fall to zero once everyone has been infected. Instead, it is the competition with (better) alternatives that mostly drives the faith of products and social media platforms. MySpace was a specialist focused on music and got driven out by the more generalist Facebook. As I predicted 4 years ago, such a stronger competitor has not arisen for Facebook. Real alternatives such as Instagram have grown (from 200 million to 600 million users) while runners up have seen mixed fortunes such as Twitter and Snapchat, who are now adding features to be more like Facebook (https://firenewsfeed.com/technology/734305 ). Meanwhile, Facebook has continued to innovate and improve – in contrast to MySpace.

Screen Shot 2018-01-02 at 1.32.58 PM(b) the study uses Google Trends data, interpreting a decline in search as a decline in interest. The above Figure shows that Google Trends indeed continued to decline for Facebook. However, the authors’ interpretation may be useful for relatively unknown companies aiming to win customers, but not for the best known company in its category, boasting billions of users who no longer feel the need to online search for it. Thus, (Google Trends) search interest is not a key performance indicator for Facebook usage in our Chaptr 8 analysis (https://www.amazon.com/Its-Not-Size-Data-How/dp/0814433952)

Our morale of the story? Forecasting is tough, especially when it is about a specific future 🙂 but that does not mean we should stop trying! Here are a few fun predictions for 2018:

Screen Shot 2018-01-02 at 2.28.42 PM

Cheers to such delicious, happy and healthy 2018 from a cold but wonderful Boston,

Prof. Koen Pauwels

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