The privacy scandal of the Cambridge Analytica case outraged almost all Facebook users, but it is not surprising that either, says the “Verne” site of the newspaper “El País”. And this is evidenced by the fact that despite the criticism and campaigns like #DeleteFacebook, the vast majority preferred to remain present in the social network.
It can be said that only a very few of more than 2.2 billion Facebook users have left the platform. A few others even configured the privacy permits of the social network. The rest stayed, and this may be because almost everyone is affected by the so-called network effect: when a product or service is more valuable while it is used by more people.
The concept has existed since 1908, although not under that name, when the president of Bell telephony, Theodore Vail, presented a report in which he explained that it was more difficult to compete with the company the more customers a region had. As well as the phone that is most useful while more people have it, the same goes for Facebook.
The network effect is evident when identifying the barriers that form: competitors with many problems to enter the market with problems to attract users to be an alternative, and users who find it difficult to stop using the product or service.
Facebook is the absolute social network. Gather the best qualities that other networks have: publish photos, comment with friends, complain about personalities, find work, buy things, read the news and much more. This characteristic makes it difficult to dispense with its existence in the everyday. And you still choose to leave the platform, still remain oblivious to other products such as WhatsApp or Instagram.
To this, we must add that Facebook is designed for people to spend as much time as possible. This for three great things that social networks usually offer, according to “Wired”: Connection, to contact friends, customers, companies; content, such as news, photos, videos, games; and social prestige, as a number of ‘likes’ and ‘friends’ and a window to the lifestyle of users.
But although it is a factor to catch people, in the long run, the network effect can also scare them away. The more people there are in a place, the more noise is generated to continue being useful. In addition, we must take into account the factor of trust, the same one that Facebook is aiming to reinforce precisely to avoid losing users with different measures and decisions.
The influence of social networks on purchasing decisions grows
The ‘social commerce’ – the ‘online’ sales driven by social networks – grows to 24% annually and already moves 6.500 million dollars. For brands, it is essential to understand the peculiarities of each network.
The big consumer brands want to draw the attention of the user in social networks. They know what happens there a long time – two and a quarter hours a day, according to the consultancy GlobalWebIndex -, and they want to take the opportunity to contact them. Facebook, Instagram, YouTube or Pinterest can be the scene of the next big battle to win the consumer’s pocket.
The analyzes of the use of networks and consumer behavior point in this line. According to a study by the BI Intelligence consultancy, in 2017 the 500 largest trading companies in the world entered 6,500 million dollars, 24% more than in 2016, with the ‘social commerce’, understood as an ‘online’ sale started in the social networks.
Other consultants have also published reports that reaffirm the growing importance of this sales format. The French company Criteo says in this study that 51% of US consumers know a product on social networks for the first time, and 44% goes to them in search of more information. And according to ViSenze, an artificial intelligence company applied to electronic commerce, a third of online purchases start on social networks.
With these data, it is not surprising that the marketing budgets of consumer companies increasingly take into account social channels, including YouTube. Advertising investment in these media reached in 2017 the 42,000 million dollars, with an annual increase of 32 %. Currently, it is estimated that networks take 11% of marketing budgets, but that figure can rise to 19% in 2022, according to BI Intelligence forecasts.
But not everything is rosy in ‘social commerce’. The measurement of the impact of campaigns is still a pending issue, and strategists have to be very mindful of the differences in social networks, and their users, to give the spot.
According to an article by Business Insider, the 500 largest distributors worldwide won 6,500 million dollars through social purchases in 2017, 24% more than in 2016. The generation more willing and eager to buy through the Social networks is the Centennials.