Simon de la Rouviere

When studying marketing, one of the first and most important lessons is to understand how to define a target market. Understanding who will buy your product is the key to ensuring that textbook “mutually satisfying exchange”.

I remember in one of the first classes, when the lecturer asked us to look at a product and then write down who we thought would the target market be, a lot of students responded (including me) quite vaguely with no idea whether their market was too broad or too little. Was the market even actionable? Where would you find them, etc?

I remember someone saying something to the lines of “…EVERYONE. Basically, people from 18 to 70 who likes having fun!” And then the lecturer would respond with: “Ain’t that cute…. BUT ITS WRONG”.

Well, not entirely, but it boiled down to that.

Remember kids! You don’t market a product for everyone! And that is extremely valuable advice. You don’t advertise billboards in Kenya for the latest Rolling Stone Magazine in South Africa.

So, today, while reading up on Facebook for my research, I came upon this graph. Look at it. LOOK.

That is insane. It is estimated that there are 2.1 billion people using the internet… and 845 million of them are on Facebook. It looks great, the prospects are going straight ahead. About 500 million of the 2.1 billion are in China. Which means, unless internet stats rise, Facebook has a cap of 1.6 billion users. (Don’t argue with me on this. The stats will obviously differ as more people come online. I’m making a point. Bear with me). They added about 245 million users last year (2011).

They still have some space to grow… for oh, about 3 years (at current rates). However in 2015 however, the total internet users are expected to total 3 billion, so that gives them a few more years.

However, what is interesting, is that their strategy for the upcoming years are to target countries like India (and get more of them online). They have already hit caps in countries like the US, where seasonal changes in users are now more common.

This map in their SEC filing shows an interesting map. Every line on it is a friend connection. Interestingly enough, it recreates geographical boundaries. Look at China… Nothing.

Can Facebook run out of users? And when?

That is hilarious. Not in a “haha. Facebook has a big problem in its hand, kinda way”, but more in a “haha. Who would’ve thought that your market cap would be… EVERYONE in the world?” kinda way. In retrospect to what my marketing lecturer said, Facebook actually needs to target everyone at this point. (BURN).

No. But really, their value will increase as long as there are users, but once most of them are online what will they do then? Don’t forget that about 1.7 billion people are living in absolute poverty. In less than a decade they will hit their cap. Serve better ads? Serve more ads? What? Increase engagement (they are doing quite well in this regard)?

It is going to be an interesting ride. There is a pun in here somewhere about saying: “You know what’s cool? Billions!”