The Impact of Facebook's Stock Price Fall

Facebook and its parent company, Meta, started to show a decline in stock value starting early February 2022. This is important for marketing professionals to acknowledge, as social media is a major aspect of marketing, advertising and interacting with a company's consumer base. Learning more about this drop in valuation can help you understand how you might manage a business' social media accounts, and in which platforms you invest time and money.

Why did Facebook's stock price fall?

Facebook's stock prices recently declined by 25%, an irregular drop in price. This means that its profits are also declining, which is rare for such a giant company as Facebook. There are several attributes that contributed to this fall, including:

  • Ad performance: Facebook's ad revenue hasn't risen as expected, which affects Facebook's profits.
  • Fewer daily users: The social media platform has also dropped in daily users.
  • Competition: Other social media platforms, such as TikTok, have become more popular, gaining more daily users.
  • Metaverse: Metaverse, or Meta, is an immersive social media platform that Facebook is developing. However, Meta is an expensive investment, which can challenge Facebook's stock prices and profits.

The significance of Facebook's stock price fall

Facebook's stock price fall is an important event for marketing professionals to notice. As a leading figure in social media, Facebook's falter in success is something that those who use this platform to promote their business should consider. This is because of the causes of the fall in Facebook's stock, especially those regarding fewer daily users and its competitors. Fewer daily users on Facebook means that fewer individuals may interact with your company's content that you post. It also limits the audience you reach.

Other causes of the fall, particularly Facebook's unreliable ad revenue, may mean that Facebook is not a reliable place to advertise. For this reason, you may reconsider using part of the company budget to purchase ad placements on Facebook, or reduce your investment in Facebook ads, since they may not perform as well as other types of advertisements.

Tips for navigating changes in social media platforms

Understanding the impact of Facebook's stock price fall can help you make better decisions as a marketing professional. Here are some tips to help you optimize your social media use for marketing purposes:

Understand your target demographic

Understanding your target demographic, particularly their age, can help you decide which social media platform to use most often. You can do this by conducting market research and reviewing user statistics from various platforms. For example, younger audiences often have TikTok accounts, so if you're trying to attract a younger audience, you might invest more time in cultivating a TikTok account or posting video-based content.

Recognize the format of popular content

Recognizing the format of popular content can help show what types of advertisements may be most successful. For example, video content, such as the posts featured on TikTok and Instagram is often popular. To mimic this success, Facebook and Twitter added video features to their platforms called "Reels" that mimic a TikTok format.  

For more tips on navigating social media for marketing needs, contact The Department of Marketing for a consultation.

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