Each Reaction on Facebook makes it richer.
The iconic like button on Facebook (FB) was supplemented with 6 reactions in early 2016. Facebook successfully condensed all of our emotional impulse into a set of six reactions. Users were liberated to express their anger or grief to the elements on their news-feed. But, this was a subtle move by Facebook to help the advertisers.. With enhanced capabilities of artificial intelligence it could be improvised to limits still unknown.
Reactions have grown in their capabilities. Now we can react on comments,to the private conversations that you have on Messenger. To understand how it adds few more digits to the revenue of Facebook we need to understand how it does business and how money flows into the balance sheet.
The heart of the cash machine at Facebook.
The core business of Facebook has always been to serve advertisements to end users. The unique selling propositions (USP ) of FB has always been targeted advertising. It’s algorithms select the target audience of a particular advertisements which helps the advertiser. It achieves this capability by creating a graph of your interests, likes, places you visit and if you connect with people of similar interests. In short the algorithms exactly know who you are, what you want at that point of time and which things you avoid. Reactions tend to add more muscle to this very algorithm.It helps Facebook refine the audience for an ad-selection. Its evident in this information age that data is the new currency and it carefully collects data about elements you “Wowed” and things you were “Angry” at.
How this works ? An Example.
I am an average Facebook user and end up spending close to thirty minutes of my day scrolling the news-feed and reacting to myriad of news, check ins of my friends , posts from pages product announcements. Few days ago I “Wowed” the product announcement of the new Surface Book by the official page of Microsoft. The Facebook algorithms were smart enough to learn my desire for a tablet. I was presented with advertisements of Android, Windows and iPads. However the WWDC happened few days back. I was indifferent for the announcement about the new iPad Pro. Also I was “Angry” about the high price of the new iPad. The Algorithms of Facebook were zillion times smarter this time. They figured out that I need a Windows tablet. They stopped serving me ads about Android and iPads. For the sellers of iPads, I was not among their target audience. It narrowed down. This clearly would not have been possible without the Reactions.
In the unit-economics level, it is known as Average Revenue Per User (ARPU). Facebook has been very successfully monetizing each individual user on its platform. The Reactions helps in targeted advertising and it directly improves the ARPU. This adds more advertising dollars to the top-line.
The ascent is visible across all regions with further space to grow.
Not only money. It drives up user user engagement.
Addiction to Facebook is well know phenomenon. This drives the engagement for every individual and it is achieved by the news-feed. The news feed is tailored for every individual users by a multitude of algorithms. These algorithms need to know more about the user to refine the feed. The Reactions funnel more data to them and in turns make them better with the end result. The news feed establishes a very personal relationship with the user and keeps them hooked to the platform. With the advancements Facebook has made with Artificial Intelligence (AI) and Image Recognition techniques we can expect the feed to be even more intimate. It all helps Facebook to keep spinning the wheel of advertising and rake up ad-dollars.
The Future of News-Feed and Facebook.
Facebook wants to personalize news feed to an extent that it becomes nearly impossible to ignore. It wants to have all the elements of Life, Culture, Politics, Philosophy embedded in our feed to consume and achieve its vision about a sustainable global community. It has successfully earned prowess in AI and machine learning to improve every aspect of the platform. It exactly knows about the things we like, dislike, we care about , we “wow” to and things which makes us “angry”. To know more it has even allowed us to react to comments on posts and also on messages.
All this calibrated data about every user will be then funneled to the machine learning algorithms to improvise every aspect of user experience and could even be used to build a new product which cant be thought of now.The more it knows, the better the results churned out from the AI. This is known as the positive feedback law of machine learning.
The advancements, of all sorts is making Facebook mightier. Every bit of data collected adds to the clout it has over society. Repercussions are already felt in every part of world from politics to social life. We should leave it to Facebook to use its might for the advancement of mankind through the immense data it has about close to 2 billion people on its platform directly.
