Facebook (NASDAQ:FB) users may soon have options to curate their News Feed by different topics so they don't have to scroll through one long feed every time they use the service.
The company has been experimenting with multiple feeds since at least October, and it says it's a way to help deliver to its users some options they've been asking for. But the driving force behind the changes might be bigger than creating options for users. Creating the additional feeds should drum up more revenue for the social network.
The all-in-one feed we've all become accustomed to may be nearing its end. Facebook hasn't announced any rollout date yet, but it has been experimenting with multiple feeds and giving marketers a chance to test them out and provide feedback.
The change to a multi-feed format makes sense for two key reasons:
- It would serve to declutter News Feeds, especially for its heaviest users.
- It would provide the company with additional ad space and ways to accommodate a larger inventory of advertisers.
Let's take a quick look at each of those points.
User engagement remains key
As users, we've come to count on Facebook as a near-utility to stay in touch with friends and family, keep up with the news and current events, and connect with people who have similar hobbies and interests.
But as a business concern, Facebook exists as a vehicle for advertising. Ads accounted for 92% of Facebook's $12.5 billion in revenue in 2014, up from 84% of the company's $5 billion in venue two years earlier.
In its annual report last year, the company identified the largest threats to that massive and growing revenue stream, and the first bullet point on the list was "decreases in user engagement, including time spent on Facebook."
The second threat? The "inability to continue to increase user access to and engagement with Facebook," especially with mobile apps.
From what Facebook representatives have said in the press, the move is a reaction to a growing frustration that users' all-in-one News Feeds may be growing to cluttered.
"People have told us they'd like new options to see and have conversations about more stories on Facebook around specific topics they're interested in," a Facebook spokesman said in an email to the news media last month.
Too many cars on the highway
Your Facebook feed, after all, is simply a conduit for information to travel, much like a highway is for vehicles. It's more efficient and convenient than traveling winding roads or city streets. But on Facebook, every new person, group, or publication you add to that feed is essentially a new entrance ramp bringing traffic onto the highway.
After a while, the News Feed, just like the highway, starts to lose its appeal the more crowded it gets. If I'm looking for news on the presidential primary and have to scroll through scores of posts filled with friends' cat photos, family pics, and rants about bad service at restaurants I'm never planning to eat at, I'm probably a lot more likely to look for a different route to my information destination.
A well-designed multiple-feed platform, however, could help to solve that problem by allowing me to go straight to a politics News Feed.
The move would seem to dovetail with some other efforts under way at Facebook. As it rolls out features such as Instant Articles and looks to bring more publishers on board, a single News Feed could get even more crowded over time.
More time spent, more ads. More ads, more revenue.
On the second front, the move to multiple feeds would give Facebook more advertising real estate, and possibly an even better ability to put the right ads in front of the right people at the right time. If it can keep its users more engaged through the assortment of feeds, it can serve them more ads.
Jason Stein, the CEO of marketing agency Laundry Service, succinctly summarized the driving force behind the shift for AdAge: "More feeds, more personalized experience, more time spent in app, more [ad] inventory."
The move to create a multiple-channel News Feed looks like a smart one for the social network. As with any change, it may take some getting used to. But if done well, it can help the company on two important fronts: better satisfying its users over time, as well as its growing inventory of advertising clients.
John-Erik Koslosky owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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