“All good things come to an end.” Those words couldn’t be any more true.
With Facebook investors looking toward an exit and an expected IPO sometime early next year, the casualties from Facebook not only include a multitude of social networks and startups, but very soon, Facebook developers.
While it may be a little premature to write off the future of Facebook developers, the signs are there that their door is closing.
Only A Matter of Time
When Facebook first started, they were on the outside looking in when it came to making money. While Facebook was laying the groundwork for their social network, other companies moved in and enjoyed the spoils of Facebook’s hard work. Social gaming companies like Zynga took full-advantage of a potentially limitless distribution network and market and turned themselves into a multi-billion dollar company.Fast-forward now to the present and you see a completely different landscape. No longer is Facebook standing around while others make money off of them. Rather, they have taken the upper-hand and have re-positioned themselves. From the removal of certain Facebook API’s (example: Static FBML app) to the upcoming July 30th deadline for Facebook games to move toward a Facebook credits based currency system (30% of transactions will be pocketed by Facebook), developers looking to make a profit off of the social network giant will find themselves with few opportunities.
While some may be surprised at this news, Facebook has steadily made it clear that eventually everything would be developed in-house. If you look at some of the early Facebook applications that fan pages and websites would embed and compare it with those available today, the numbers have dropped drastically. Facebook has taken every great application that’s been built by an outside developer and has built it themselves. Logically, it makes sense. Why would Facebook let others make something when they can make it themselves.
How This Affects Sports Teams
With the potential exit of Facebook developers and apps, sports teams should consider the following points:
1. Social Media Agencies. In most cases, social media agencies rely heavily on customized applications for Facebook. While these applications can be visually stunning, the downside lies in the actual conversion rate for Facebook apps. To give you one an idea of the conversion rates that they are looking at, ReadWriteWeb published an article earlier where they found the following:
Like blocking, where a user has to “Like” a Facebook Page in order to access a feature, typically has a 50% or more drop off rate, even when there is something there that is actually worth liking the page to get, such as exclusive content or a great coupon.
Asking the user for a laundry list of access to their profile usually results in a 30% or more drop off rate, and that is for well known brands that they trust.
With Facebook tightening the grip on privacy opt-ins for 3rd party apps, sports teams need to begin re-evaluating if there marketing dollars are spent in the right way. In addition, the bigger question becomes if social media agencies themselves can survive if custom Facebook applications increase in difficulty and decrease in conversion and effectiveness.
2. You don’t need custom Facebook apps to be successful. If you take a step back and view how the average user interacts with Facebook, you will quickly realize that you don’t need custom Facebook apps. As mentioned, if it’s useful, Facebook will undoubtedly have noticed and will build it themselves. From photo widgets to embeddable like buttons, Facebook has made it so that you don’t need to spend hundreds and thousands of dollars on something custom. Especially with sports teams, what’s important is interacting and engaging with ones community, which doesn’t need a custom app.
3. Why are you spending money on Facebook? This is a big question that every sports team should ask themselves. As every dollar spent needs to be accounted for, spending money on Facebook should be done with the utmost caution. In addition, teams need to identify what factor success is being measured against. Spending money to get more fans may sound glamorous, but at the end of the day, what is that fan doing for you? Unless you are capturing fan data (which Facebook doesn’t allow), putting a dollar value on a Facebook fan is still too difficult. Additionally, Facebook apps have long been appealing because of their appeal in monetizing fans (ex: Enter and win contests), but they have been around long enough for us to understand that these rarely work.
Ultimately, with or without outside Facebook developers and the custom applications that they build, Facebook will continue to be a valuable asset for sports teams. Still, just how the social network giant is constantly changing, sports teams need to continue to evolve as well.