Can't Buy Me Love? Facebook Aims to Firm Up User Support
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What headline news opens this Money Briefing about Facebook's ad plans?
Here's your money briefing. I'm J.R. Whalen at The Wall Street Journal in New York. Facebook has told the journal it's likely going to double its ad spending over the next two to three years. But can a slate of advertising restore your trust in Facebook? Well, ask a Journal Heard on the Street columnist in a moment.
What recent housing and home-price data could affect consumer sentiment?
First, these money and market stories you should know. Another sign the housing market is on uneven ground. The Commerce Department says in May, purchases of newly built single-family homes decreased by 7.8%. And while that doesn't go into the good news column, economists who spoke to the Journal say a swing that broad usually indicates it's a fluke and not a trend. And that's because strong sales of previously owned homes in May balance out the data about new home sales. Meanwhile, average home prices in U.S. major metropolitan areas rose 3.5% and the year ended in April. That's down a bit from 3.7% the prior month and 3.9% in February. Economists see the year-long trend of decelerating price growth
as a process of normalization after several years of steep price climbs.
What did Payscale's survey reveal about college regrets and student debt?
And the salary website Payscale asked a quarter of a million people about their college experience and two-thirds had several major regrets. First was student loans, and with the average student who graduates with debt owing about $30,000, who can blame them? Another is the major they chose, namely humanities, which includes specialties like history and English. Research has shown that the income of people who studied humanities or liberal arts skews lower than those who studied business or STEM topics.
What if you promoted a global powerhouse website and nobody came? That's a question facing Facebook, which is about to double its advertising spending to secure its user base. But can a huge ramp up in spending win trust? Let's bring in Heard on the Street columnist Laura Foreman. So, Laura, among the biggest social media players, Twitter and Snap, Pinterest and Facebook, it's Facebook that has the largest share of ad spending at 93 percent. And yet that's not enough for them to feel secure about their user base.
Why is Facebook planning to double its ad spending to retain users?
First of all, Facebook saying that they are potentially going to double their ads and we don't know if they are for sure. And they're saying that this is going to mark a milestone for the company and that they've never actually done a major direct-to-consumer campaign. So I think they've been around for over 15 years now, and they, of course, have had a tough year in terms of PR with data privacy issues. And so it's less about securing their user base and enticing new users and more about Getting the existing users on the platform to understand the value and sort of like all the different value add that the platform can provide to them.
You know, this brings to mind the classic song, Can't Buy Me Love. You know, Facebook has spent a lot of money on exposure, but they're looking for a lot more than exposure.
Yeah, they are. I mean, with their new announcement that they're going to be heading into cryptocurrency with Libra next year, I think they're really just looking for a way to get users to spend more time on their platform. Jeffrey's had a note out last week that talks about how users are less engaged on Facebook.
How does Laura Forman explain falling engagement on Facebook and Instagram?
Many users are leaving or have been over the last 12 months across several geographies. Users in the US are spending less time on average on both Facebook and Instagram. So Facebook is just really trying to ramp that back up. And I would think that the thinking would be, you know, the more time consumers are spending on their website, the more money they might spend.
And the interesting thing here is that they are really trying to secure the existing users and try not to hemorrhage any more users who have left and gone elsewhere.
Positively for them, data suggests that, well, it was suggesting that users who are leaving the legacy Facebook platform were leaving to go to Instagram, which at least Facebook still owned. And so what was interesting about the data that Jeffrey's presented last week was that engagement on Instagram is actually going down as well.
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Chapters
6 chapters
1
What headline news opens this Money Briefing about Facebook's ad plans?
0:05–0:21
2
What recent housing and home-price data could affect consumer sentiment?
0:21–1:11
3
What did Payscale's survey reveal about college regrets and student debt?
1:11–2:23
4
Why is Facebook planning to double its ad spending to retain users?
2:23–3:26
5
How does Laura Forman explain falling engagement on Facebook and Instagram?
3:26–4:43
6
What strategies does Facebook consider to rebuild trust and increase time spent?
4:43–5:54
Speakers
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