Yet Another Report Bemoaning Facebook’s Demise

Facebook needs to watch out as its growth levels and other social networks catch up, according to a report from Adobe.

Yet Another Report Bemoaning Facebook’s Demise
[Image: Flickr user mkhmarketing]

A slew of recent Facebook reports seem to suggest the social giant is losing its steam. Earlier this month, a marketing firm crunched the numbers and said the network lost 3 million teenagers in the last three years. Last week, Princeton students came out with a study saying Facebook will lose 80% of its peak user base by 2017 (a claim the company took down soon after).


Ahead of Facebook’s earnings release Wednesday, Adobe issued a report of its own, analyzing 240 billion ad impressions and 1.5 billion posts on Facebook from the fourth quarter of 2012 to 2013. Overall, “likes” made up 82% of the engagement on Facebook, but engagement rates for links, text, and video posts all saw a decline from the year prior.

“It’s not because the audience of Facebook doesn’t like video anymore,” Tamara Gaffney, principal analyst for the Adobe Digital Index, told Fast Company. “We believe the creative treatment posted to Facebook was not as high quality.”

Though she said Facebook saw record-high click-through rates for ads, jumping 365% in the fourth quarter year over year, she warned of leveling growth as other networks catch up. The cost per click increased 29% over the holiday season, but the rise was lower than expected, she said. However, the cost per thousand ad impressions leapt 437% from the year prior.

Facebook still refers the most traffic to retail sites, but its growth for revenue per visit was the slowest, up 72% to $1.22 from the year prior. Meanwhile, the other major networks all gained in revenue per visit: Tumblr by 340% to $1.10, Pinterest by 244% to $0.93, and Twitter by 131% to $0.83. “What we discovered really shocked us,” Gaffney said. “The biggest growth year over year came from Tumblr.”

She also notes that the Tumblr audience likely has a higher household income. “That might be the reason Tumblr’s delivering higher quality traffic even though it’s much, much smaller,” she said. Pinterest is also forecast to overtake Facebook in revenue per visit in the U.S. this year, and already has in the U.K., Gaffney added.

About the author

Based in San Francisco, Alice Truong is Fast Company's West Coast correspondent. She previously reported in Chicago, Washington D.C., New York and most recently Hong Kong, where she (left her heart and) worked as a reporter for the Wall Street Journal.