Facebook’s Disappointing Q3 Results & Regulatory Challenges Ahead

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Following on from recent news regarding facebook’s poor Q318 results, Jon Tipple, Chief Strategy Officer, Worldwide at FutureBrand, discusses further bad news for the firm.

Facebook’s disappointing Q3 results – despite strong earnings, the social media giant failed to reach analysts’ estimates on revenue, daily active users and monthly active users – reflect some difficult challenges the social media giant is wrestling with, including sluggish revenue growth and shrinking margins, as well as a steady stream of users choosing to leave the platform altogether.

Sadly, there’s more bad news for the company in the recently released 2018 FutureBrand Index, which takes PwC’s Global Top 100 companies by market capitalisation and re-orders them in terms of how strongly positioned they are for future success.

Despite still occupying a healthy eighth place in the PwC ranking, Facebook fell 37 places to 43rd position in the FutureBrand Index since it was last published in 2016 – and it’s widely perceived as one of the brands that will fall behind the most over the next three years.

This might be no more than a reflection of recent high-profile negative media coverage, but it might be more than that. The Index tells us that trust, admiration and passion for Facebook have all dropped, along with innovation and thought leadership.

The FAANG companies – Facebook, Apple, Amazon, Netflix and Google – are all about 20 years old now. In human terms they’re approaching adulthood, with all the grown-up challenges that entails. For them, this translates to issues such as data protection, privacy, corporate taxes and fake news.

The companies that score well in the FutureBrand Index – and which are therefore most strongly positioned for future success – are those that consistently align the totality of the experiences they create for all with their wider corporate purpose.

Focusing on these issues should be a priority for Mark Zuckerberg and his team if they want to arrest the decline and bring support back for the Facebook brand.

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