A recent market research report published by the Pew Research Center, one of the worldwide leading market research institutes, sheds light on a phenomenon that may be the biggest threat that Facebook has had to face until now. A possible consequence of the Cambridge Analytica scandal, what the report reveals is that US users are massively deleting the Facebook application from their smartphone. Even worse, those who are must disinstalling the Facebook app are the younger users. As the Pew centre puts it:
“44% of younger users (those ages 18 to 29) say they have deleted the Facebook app from their phone in the past year, nearly four times the share of users ages 65 and older (12%) who have done so.”
What is this study telling us about the future of the #1 social media app ? Can we believe the results of the study? What is happening in the head of the users? If you want to know more avout the situation, read further.
The aftermath of the Cambridge Analytica scandal
According to the research some 64% of younger American users have adjusted their privacy settings since the Cambridge Analytica scandal. This percentage decreases with the age of the user (only 12% for users aged 65+). The survey reveals also that 9% of users have downloaded their data since this option was made available by Facebook (a consequence of GDPR; see this other article on this topic).
Can we believe the results of this study ?
There is no reason to doubt the results of this study. In particular the question on the desinstallation of the app is a pretty straightforward one: the answer is yes or no. The reality of the results (which only Facebook can assess) is more questionnable when it comes to questions that require the respondent to assess his/her own behavior. Social norms may be involved that can lead the respondent to have a biased view on his / her own behavior. We have given an example of a similar situation in another article where users were overevaluating their cookies-deletion frequency.
Facebook-Fatigue : a phenomenon that is taking on
What this research reveals is a phenomenon that most of us have already felt: the Facebook fatigue. The Cambridge Analytica scandal was just one more argument for users to feel less “attached” to the social network. Eventually, when usage is lower you tend to find substitutes. Instagram (and in particular Instagram stories) is one of them. The only problem is that Instagram is much less of a cash machine than Facebook.
Conclusion
If the results of the study are true (and they is no reason to believe they aren’t), the Facebook share price should decrease. We believe that there is still a financial bubble around tech companies (most of the growth of the stock market is driven by tech companies) and that investors will sooner or later realize that those companies are overevaluated (will that happen after the mid-term elections if Republicans loose their majority?).
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Posted in Research.