Facebook Net Negative Impact FI

Is Now the Right Time for Facebook to Launch a Smart Display?

Facebook is in the news a lot right now. It is being plagued by claims of bias, fake news, enabling Russian interference in the U.S. presidential campaign, and privacy violations by its former advertising partner, Cambridge Analytica. An October 2017 survey of 1,500 U.S. consumers by The Verge found that Facebook, along with Twitter, were the most distrusted of the big tech companies. About twice as many consumers expressed distrust for Facebook as for Amazon.

A December 2017 Survey by CB Insights of its readers asked a different question. “In ten years, which company will we say was a net negative for society?” The overwhelming choice was Facebook. It was five times more than the second-place choice, Amazon.

This appears to be more than just a bad news cycle for Facebook. A new poll by Reuters and Ipsos found that only 41% of “Americans trust Facebook to obey laws that protect their personal privacy.” That sentiment was lower than Amazon and Google, but also trailed Yahoo which has more than one high profile failures to protect user information. Facebook has serious trust issues with broad segments of the U.S. population when fewer than half of survey respondents believe the company will merely obey existing laws. Given this situation, is now really a good time for Facebook to launch a smart display with a voice assistant? Will consumers trust a Facebook-produced device that is resident in their home and tracking even more of their lives than it already does?

Facebook Smart Display Plans

There are many credible reports that Facebook plans to launch one or two smart displays in 2018. Being a company driven by visual images and text, it makes sense for Facebook to skip the smart speaker and go straight to the smart display. And, it’s not that Facebook is ignoring audio. In December, the company announced a deal with Universal Music for rights to use copyrighted music on the platform. That was followed in January by a deal with Sony Music and just a few weeks ago Facebook announced another agreement with Warner Music. Voicebot’s Smart Speaker Consumer Adoption Report found that music listening was the number one consumer use case on smart speakers and even though Facebook is looking to start with a screen, it will want to offer music options to supplement a visually-driven experience.

The company’s annual developer conference, F8, scheduled for May 1-2, is the obvious time to introduce the new device to the world that will debut in 2018. But, will they do it? Yes. There are two reasons for this. First, Facebook is concerned that voice assistants could become gatekeepers between users and its platform content. Second, Facebook has a global user base that is increasingly skewed toward Asia, the Pacific Rim and Latin America.

Protecting Facebook’s Direct Line to Users

“Home based smart displays are simply an opportunity to capture attention. Being able to browse your Facebook or Instagram feeds by voice while cooking or cleaning around the house is another touch point that the company has not yet invaded…A display device could make your Facebook feed ever-present and remove the friction of having to open an app. You may have noticed that Facebook will send you emails hoping to coax you into opening the app. A display on your kitchen counter or night-stand doesn’t require those prompts. It is always there and visible.” Voicebot.ai August 2017

“Voice assistants introduce an intermediary between the user and content that is not present in mobile. A mobile user simply selects the app they want to activate. A smart speaker or smart display user must ask the voice assistant for access. That means the voice assistant can steer users to other content or promote other services in the process. In fact, the voice assistant controls attention for every initial interaction and attention is the currency on which Facebook has built its business.” Voicebot.ai, February 2018

That first citation from a Voicebot article in August 2017 lists ways Facebook can benefit from smart displays. The second citation from a February 2018 Voicebot article outlines why Facebook sees voice assistants as a potential threat to its digital attention dominance. Whenever Mark Zuckerberg has sensed a threat to his business, he has shown no concern about what other people think he should do. When it looked like image sharing apps could be a threat, he bought Instagram for over $1 billion. Later, messaging apps were gaining global users at a rapid pace and he acquired WhatsApp for $19 billion. I don’t think some bad new cycles are going to keep him from entering a market he is concerned could become an existential threat.

Facebook is an International Company

The other point that everyone should keep in mind is that Facebook’s reputation in the U.S. is no longer the sole determinant of its future success. Yes, the U.S. and Canada accounted for an estimated 49% of ad revenue in 2017, but the U.S. fell to second place behind India during the year in terms of total users. The only other Western nation in the top 10 is the U.K. The others beyond India are in Southeast Asia, the Pacific Rim, Latin American and one if from the Middle East. None of the top 10 cities in terms of Facebook users in 2017 was in a Western country.

This is not to say that the company’s reputation in the U.S., U.K. and in other Western nations is unimportant. The company has some work to do in rebuilding consumer trust. However, it does emphasize that Facebook’s decision criteria go well beyond U.S. consumer sentiment to include its other 1.4 billion users. Facebook may well weather its current public relations crisis in the U.S. just in time for the launch of its new smart display. If not, the company still has many global markets to serve in the interim.

Facebook’s Role in the Voice Era

I am on record saying that Facebook can succeed as a service behind the voice assistants. It would be the number one voice app on Google Assistant or skill on Alexa from the day it launched. That strategy is still available to Facebook and would sidestep the consumer trust issues. Without its own virtual assistant, the company would not be asking consumers to bestow more trust. They would simply be adapting the service already offered in other channels for voice interaction. Amazon and Google would willingly assist in this effort.

However, Facebook wants to maintain user attention at all costs. Given that objective, it will very likely pursue smart displays this year despite public relations problems in the U.S. The challenge will be that even if Facebook succeeds in the smart display market segment, it will still increasingly exist behind a voice assistant on mobile. And, it will have to invest heavily in building out voice models for at least dozens of languages. Facebook realized years ago that it was better off becoming the most popular app on mobile devices instead of building mobile devices. The same situation is likely true for voice, but if they are going to give smart displays a try, 2018 is the year to move forward. The first week in May should tell us a lot about Facebook’s intentions around voice and the home.

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