How TikTok Is Eating Into Facebook’s Revenue and User Numbers
Meta has released its second quarter (Q2) 2022 results, and things aren’t looking good for Mark Zuckerberg and co. So, let’s look at what happened to Facebook in the second quarter of 2022 and the potential causes of its declining fortunes.
Facebook revenues have declined and user growth has stalled
If you look at Meta’s press release, you’ll see that the social network’s revenues have been declining since 2021. According to CNBC, Mark Zuckerberg indicated that economic conditions are worse than in the second quarter of 2021.
Facebook has also seen a decline in the number of new users registered on the platform, as the number of monthly active users has not changed much in the past few quarters before 2022, as shown in the chart you can see on DataReportal.
While Apple’s privacy changes (as reported by Business Insider) could have contributed to the turmoil in Facebook’s ad business, it’s unlikely to be the main cause of the damage.
TikTok is the main cause of Facebook’s decline
The picture is quite the opposite for TikTok in the quarter before the second quarter of 2022. According to Bloomberg, TikTok’s annual revenue in 2021 was $4.6 billion and is expected to reach $12 billion by the end of 2022. China-owned social video As noted by Insider Intelligence, the app also has a rapidly growing number of users.
This statistic has led many to speculate that TikTok is the main reason behind Facebook’s decline in both revenue and user growth. And while correlation does not equal causation, the relative success and failure of both companies appears to be related.
TikTok owes much of its success to the recommendation algorithm it uses. It suggests content related to your interests and keeps you engaged for a long time. Additionally, shorter videos allow you to access more content in less time.
Facebook initially lacked these features. However, it’s now taking off thanks to services like Reels that can make money for creators.
Another advantage that TikTok has is that celebrities with huge followers use it to communicate with their fans. This has caused their fan bases to shift from Facebook (and others) to TikTok.
Additionally, more and more businesses are using TikTok for advertising and branding due to increased activity on the platform.
TikTok’s massive user base makes it easy for ordinary people to get noticed and brand themselves. In fact, TikTok has turned many ordinary people into global celebrities, Khaby Lame being a prime example. And lessons can be learned from Khaby Lame’s success on this platform.
TikTok has been criticized for many reasons. However, there are many positive aspects to TikTok, and all of these factors have played an important role in its growth and in driving users away from Facebook. While Facebook is trying to recover, for now, the statistics are very much in TikTok’s favor.
Can Facebook take on TikTok?
Facebook may have seen a decline in revenue. However, it is still the top social media company in the world. This is the largest user base that can benefit from introducing new services like Reels and improving current algorithms.
The best thing about the heated competition between Facebook and TikTok is that you, the user, get a new and improved service from it. This is especially evident if you look at the evolution of Facebook over the past decade.