Facebook's three-step plan to take over the rest of the world
Earlier this week, the company rolled out a new kind of ad format meant to bring a video experience to low-bandwidth emerging markets.
Throughout the launch event, the main refrain was how Facebook plans to "connect the next billion."
Right now, the main Facebook app has nearly 1.5 billion monthly active users. Instagram, its photo sharing app, has 300 million, while Messenger and WhatsApp, its chat apps, have 700 million and 900 million, respectively.
That's a huge swath of the word's population, but Facebook says that it's just the beginning.
Right now, about 3 billion people have access to the Internet, but 3 billion more are set to come online in the next five years, primarily from emerging markets like India and Africa.
Facebook wants to rope them all into its apps and keep its $3.8 billion in quarterly ad revenue climbing.
Here's its three-pronged approach to taking over the world:
1. Make FB work everywhere
Although most people in the US can fire up the Facebook app on their phone and scroll through their News Feed without noticeable lag time, that's not the case in most of the world, where people have slow connections. For example, one third of the next billion people that come online will do so from India, where the majority of mobile connections are only 2G.
Facebook created this graphic to illustrate the network break-down:
The team has sicced its engineering and product teams on solving that problem. The company highlighted its successes earlier this month, like how it has created an open-sourced Network Connection Class system that lets the app figure out a user's connection speed on the fly. With that info, it can adjust what kind of News Feed stories it shows them and how to load them.
For example, with a slow connection, the app will prioritize fully displaying stories that the user is looking at, versus partially loading a dozen pieces of content at once, as well as only initially loading low-res versions of photos. To make sure that people never simply see a loading symbol or gray boxes, it will also show stories loaded on previous connections when a user taps open the app, even when there isn't any connection at all.
To make sure employees understand the challenge, Facebook recently launched a new initiative called 2G Tuesdays that prompts all of its employees to opt into one hour of a simulated slow connection once a week, to help them identify ways it could make the experience even better.
"What we're really trying to do is build empathy inside of the company and to really appreciate that the people we're building for look less and less like us," Facebook product chief Chris Cox said at this week's event.
Shahbano Khushi / Flickr2. Making sure all those new users make it money
Shahbano Khushi / Flickr
Facebook also needs to make money off of all its users in emerging markets.
That's why the company has focused on finding new ways to tailor its ads to feature phones and slower connections since 2013.
Still, while nearly 60% of its daily active users live outside North America and Europe, those users only account for about a quarter of Facebook's total revenues.
The company has worked to shift those percentages by constantly improving its ad experience in other parts of the world. Today, Facebook's ads work even on slow connections, engineer director of emerging markets Kelly MacLean says.
Here are some other ways Facebook's made a monetization push for users in emerging markets:
- It launched a Creative Accelerator program to help advertisers think of unique ways to connect with regional audiences and work with the local infrastructure. For example, in India Facebook has created a "missed call" ad product where people can avoid using their data plan by having the advertiser pay the data costs of sending them some sort of content, like music or a celebrity message.
- It opened a sales office in Johannesburg to help it expands its reach in Africa.
- It's constantly adjusting its ad products to make them better, like allowing advertisers to target uses based on their connection, or with this week's introduction of slideshow ads which create a video-like experience for low bandwidth
By paying extremely careful attention to making sure that as it improves its product in emerging markets, it can also find new advertisers with fresh ways of reaching consumers, Facebook is making sure that it can reap revenue from all users.
Facebook3. Spreading internet itself, to keep the new flow of users coming
To get people in emerging countriesd online, Facebook does not only rely on governments or local companies.
The company has also invested in making sure more people get online as soon as possible, most immediately through the non-profit organization, Internet.org, which it leads.
It has also partnered with local service providers for a service called Free Basics which lets people use Facebook and other apps without paying.
It even has a solution for areas without the right infrastructure for Free Basics. By next year, it will launch its first solar-powered aircraft capable of beaming internet to areas that don't have the cell towers or fiber optic cables to support
With these efforts, Facebook ensures a steady stream of new people coming online, who it hopes will join Facebook and start bringing it ad revenue.
It's not working alone: While Facebook makes its drones, Google is flying internet balloons all over the world, too.
Business Insider / Jillian D'OnfroEverywhere, all at once
Business Insider / Jillian D'Onfro
Director of emerging markets monetization Nikila Srinvisan summed it up at Facebook's presentation:
"We want to reach everyone, across any level of connectivity, how and when they want to connect."
Whether or not you're a Facebook fan, it's hard to miss how quickly the company is hurtling towards that goal.
And we'll probably hear even more updates soon.
Facebook reports its Q3 earnings on November 4, and we bet that its efforts in emerging markets will come up.
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