If you recall from my prior blog entry in 2009 titled “Has Facebook Been Lucky” I reported that unique visitors to Facebook were climbing exponentially throughout the recession we were facing at that time. I additionally noted that traffic to Facebook during that same time also had a 98% correlation with the unemployment rate. And to top it off, it all made perfect sense. During that time many people were losing their jobs and were seeking to reconnect with past friends and acquaintances. Facebook was the perfect vehicle. Individuals were reaching out to Facebook and creating accounts at lightning speed. See Figure 1 below from 2009 revealing this phenomenon (click on figure for larger image).
Figure 1: Facebook Unique Visitors Vs Unemployment Rate through September 2009
Now two years later, I felt it was time to revisit this story. In particular I wondered two things:
- Is the relationship between Facebook traffic and the unemployment rate the same?
- is traffic to Facebook still skyrocketing?
Let’s take a look.
The Relationship Between Facebook and the Unemployment Rate
Facebook visitors are continuing to climb as Figure 2 below shows (click on figure for larger image). However, at a much slower rate than we saw during the height of the recession in 2008 and 2009. In October ’09, at the point where the unemployment rate began to decline, we note the growth rate of Facebook unique visitors has definitely slowed down. And, as of April ’10, how this Facebook visitor metric relates to the unemployment rate has definitely changed. So the question is why and does this make sense.
Figure 2: Facebook Unique Visitors vs. Unemployment Rate through January 2012
Current Facebook Visitor Dynamic
The dynamic observed today makes perfect sense based on other circumstances that have transpired since 2009 and how we are now using Facebook today versus two years ago. Let’s take a look:
- It has been reported that both big companies and small businesses have increasingly jumped into Facebook since 2010.
- In February 2010 there were more than 3 million active business pages on Facebook, nearly double the 1.6 million it reported in December 2009. Wow!
- Pages that Facebook defines as local businesses went from 700,000 actives to 1.5 million. Local businesses comprised half of the overall increase in active Pages over the last couple of months (from December 2009 to February 2010).
- According to another study, it has been reported the average user becomes a fan of 4 pages every month. (New Facebook Statistics Show Big Increase in Content Sharing, Local Business Pages, http://www.insidefacebook.com/2010/02/15/new-facebook-statistics-show-big-increase-in-content-sharing-local-business-pages).
- According to research from the University of Massachusetts at Dartmouth 56% of Fortune 500 companies had a Facebook profile in 2010.(Fortune 500 Social Media Use: Twitter Overtakes Facebook, http://www.marketingprofs.com/charts/2010/4041/fortune-500-social-media-use-twitter-overtakes-facebook)
So in other words, we are now using Facebook to interact with brands we “like” in addition to stay in touch with friends and family. We’ve developed more intimate relationships with our beloved brands on Facebook.
Other developments over the past two years also driving us to Facebook include the following facts:
- The gamification of Facebook has also taken place since that time also. In fact, Facebook casual gaming has helped to triple the number of gamers in the US in the past three years. http://news.yahoo.com/study-facebook-gaming-declines-2011-social-gaming-seeking-054626421.html
- Product discounts and "social badging" are the most commonly cited motivations for "liking" brands on Facebook, according to a survey conducted by ExactTarget released in September 2010. (Facebook Users Like Brands for Discounts, Social Badging, http://www.marketingprofs.com/charts/2010/3882/facebook-users-like-brands-for-discounts-social-badging)
So, maybe there is another connection to the unemployment rate? Could the time we spend on Facebook now be correlated with the unemployment rate? The answer is a big fat yes.
The correlation with the unemployment rate has shifted from unique visitors to time spent as Figure 3 below clearly depicts (click on figure for larger image).
Figure 3: Facebook Time Spent vs. Unemployment Rate through 2011
By examining this graph we note, as the economy improves the time spent on Facebook is also decreasing. The correlation between the two metrics is significant. Even though unique visitors is still increasing as was shown in Figure 2. As the population shifts back to work, our time is now shifting away from leisure and as a result we spend less time on Facebook. Makes perfect sense. So cool. Love data!
Summary
In 2008 and 2009 we saw that Facebook was a means of people connecting with each other as the unemployment rate was high, and many individuals were seeking work, and reconnecting with their contacts. In 2010, we saw many businesses jump into Facebook to create brand pages and monetize this channel. We noted the increase in overall business pages nearly doubled during 2010. This increase in business pages, coupled with the improving employment situation led to a new dynamic in Facebook; people connecting with brands and a shift in time spent on Facebook. As more people enter the job market, the time spent on Facebook declines, and this relationship is evident even as overall Facebook users climb albeit at a slower rate than 2009.
Perry
Special thanks to Yuko Ichihara, my Research Analyst, for her valuable research work and insights provided.
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