Deloitte Report: Facebook Enabled $227bn of Economic Impact and Created 4.5m Jobs in 2014
While Facebook didn’t invent social networking, the company has certainly pushed the boundaries on what social networking can achieve. With over 1.3 billion active users as of June 2014, Mark Zuckerberg’s brainchild has diversified into numerous services. Indeed, Facebook in its current iteration can no longer be considered just a social network, as it has evolved into a global digital ecosystem.
Facebook doesn’t just help its users connect with their friends and family around the world, as it also drives growth for numerous local and international businesses. On January 21, 2015, Mark Zuckerberg posted an announcement on his Facebook page, detailing a new report by researchers from Deloitte, a prominent international professional services network.
“A new economic report found that Facebook created more than 4.5 million jobs and more than $225 billion of economic activity in 2014,” Zuckerberg proudly posted. “Our mission at Facebook is to connect the world. We often think about this as connecting you with your friends and family — those who matter to you most. But this also means helping people connect with businesses, governments and other organizations in their lives as well.”
“By helping businesses connect with new and existing customers, and by helping developers share their apps with the world, the Facebook community is creating a lot of jobs and economic opportunity around the world,” stated Zuckerberg.
The Deloitte report clearly demonstrates that Facebook made a significant economic impact in major regions around the world in 2014. These major regions are: North, Central, and South America; Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific region (APAC). Moreover, the Deloitte report revised Zuckerberg’s initial findings to $227 billion of economic impact.
Facebook’s highly successful business model focuses on tools that enable businesses to reach existing customers and source new leads via Pages and advertising. These tools don’t just help businesses grow their sales and boost their profits, but creates jobs as well. Marketing effects, which is worth an estimated $148 billion, was responsible for a significant share of the economic impact facilitated by Facebook via third parties in 2014.
The United States, not surprisingly, was estimated to capture the largest share of economic impact at $100 billion in 2014, with the other major regions also gaining large shares of economic impact totaling in the billions last year.
Figure 1 shows Facebook’s $227 billion of global economic impact divided into three broad effects—marketing, platform, and connectivity. These effects are further subdivided among the major regions to determine the regional economic impact created by Facebook.
The Deloitte report went on to define the three effects used to analyze Facebook’s global and regional economic impact:
- Marketing effects details the economic impact of Facebook for enterprises that use it as a marketing platform to connect with consumers and create brand value,
- Platform effects details how Facebook impacts the developer app economy,
- Connectivity effects details the impact created by the sale of mobile devices and increased Internet connectivity.
With its global reach and high user engagement rate, Facebook enables SMBs and large corporations to reach out directly to their leads and customers. Moreover, the three effects directly and indirectly impact new as well as traditional industries, and across business sectors.
How Facebook’s Marketing Effects Reduces Barriers to Marketing and Grows Sales
Businesses are using Facebook’s Pages and targeted advertising tools to acquire and retain new customers, increase brand awareness, and grow their sales. Facebook is also a leading source of organic traffic which diverts traffic from Facebook to external websites.
Meanwhile, Facebook users are using the social network to discover and engage with different brands and companies. Governments and non-profits are also using Facebook to connect with their members and constituents. These different entities benefit from the free flow of ideas and information on the Facebook platform.
According to the Deloitte report, Facebook’s Pages “provide businesses with a way to establish or enhance their presence online across desktop, mobile and tablet.” Moreover, targeted advertising enables marketers to deliver scalable promotional content to highly targeted audiences, which in turn maximizes ROI.
Facebook has become an important source of referral traffic; the social network held a significant share of social referral clicks from mobile devices in 2014. As multi-platform usage continues to grow, it will become increasingly vital for businesses to integrate their marketing campaigns into Facebook’s mobile platform to connect with and convert their target audience.
Figure 2 provides a more detailed look into the macro-regional impact of Facebook’s marketing effects:
Has Facebook enabled you to acquire and retain new customers, build brand awareness, and drive sales?
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