Snap and Facebook Stumble in Effort to Increase Meaningful Interactions Between Friends

Facebook CEO Mark Zuckerberg speaks on stage in front of a blue backdrop that shows Facebook's 10-year roadmap

Facebook (NASDAQ: FB) and Snap Inc. (NYSE: SNAP) have always competed for users, but recently, they've begun competing for something else: meaningful interactions.

Both companies have recently said that one of their new goals is for users to spend more time interacting with their real friends. The problem is that the two social media companies are frustrating their users who have spent years learning how to navigate the old designs.

Facebook says it's experimenting with many new features to increase positive interactions between friends and will only give a wide release to tools that it deems worthy. Snap, on the other hand, says it isn't worried about the backlash on its new design because change requires an adjustment period.

Facebook awkwardly encourages users to interact more

Facebook's new mission to increase meaningful interactions between its more than 2 billion users was first laid out in a blog post in January when the company said it would start prioritizing posts that prompted meaningful conversations.

"Over the next few months, we'll be making updates to ranking so people have more opportunities to interact with the people they care about," wrote Adam Mosseri, Facebook's head of News Feed.

Part of this update involved showing less content from publishers and businesses in favor of more content from real friends. Facebook noted that some businesses may see their reach, video watch time, and referral traffic decrease, especially those that don't get many comments or reactions on their posts.

Those changes have already led to two digital publishers shutting down due to a dramatic decrease in traffic. Female-focused LittleThings shuttered at the end of February after a four-year run because the News Feed tweak caused its traffic to plunge by 75%; Cox Media's conservative viral content site will close at the end of March.

Facebook briefly experimented with putting all publisher content into a separate tab called "Explore" on the News Feed as a way for users to see just friend updates on the main News Feed, but ended the effort because it didn't help foster interaction between genuine connections.

That's not the only potential update that hasn't resonated. Facebook recently tested notifications that prompted users to interact on a small scale. The results were, at least in some cases, awkward. In one instance, a user got a notification that said 26 people -- including his live-in girlfriend -- "may want to meet up" with him during the week, according to Bloomberg .

The addition of a "breaking news" label for publishers, however, has been well received, and Facebook has expanded its use to more than 50 outlets in North America, Latin America, Europe, and Australia. Publishers can use the label once per day, and Facebook says posts with it get more interactions, including an 11% lift in shares.

"By making these changes, I expect the time people spend on Facebook and some measures of engagement will go down," CEO Mark Zuckerberg wrote in a January Facebook post. "But I also expect the time you do spend on Facebook will be more valuable. And if we do the right thing, I believe that will be good for our community and our business over the long term too."

Investors will be watching closely to see if these changes, and the lower engagement for viral publishers, result in a noticeable drop in Facebook's ballooning revenue, which increased 47% year over year to nearly $40.7 billion for 2017.

Snap hopes big redesign will spur user growth

Snap has been going through a similar struggle, although on a smaller scale. In an effort to boost its long-term growth, the Snapchat parent company on Feb. 6 released a redesigned app that separates professional and friend content. But the update has been met with an overwhelming amount of criticism from its users .

By the end of February, over 1.2 million people had signed a petition on asking Snap to remove the update that they said made features more difficult to use. (Snap said it had 187 million daily active users in its most recent financial report.) The Snap team responded to say that while it appreciated the feedback the redesign was here to stay .

In the last earnings call, Snap CEO Evan Spiegel tied the redesign to three key purposes: bringing friends closer together, doing a better job of promoting publisher content, and making the app easier to use. Despite the backlash, the company claims that early tests show that daily active users watching Publisher Stories on the Discover page increased by 40% with the new design. Snap also claims the redesign is already helping its ad performance and its average revenue per user.

So far, Spiegel has been cool and casual about the criticism, according to comments he made at the Goldman Sachs Internet and Technology Conference on Feb. 15. "We're excited about what we're seeing so far," Spiegel said at the event, adding that the complaints are actually validating the redesign.

One complaint Snap has received is that celebrities like Kim Kardashian no longer feel like people's friends because their content is in a separate area now. Spiegel said this change is good for users, because those celebrities were never their real friends anyway.

It seems Facebook and Snap have both realized that short-term growth isn't worth it if users feel miserable or frustrated during or after they use their platforms. Now they're hoping that the short-term awkwardness from big changes will pay off in the form of long-term growth.

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Natalie Walters has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has the following options: short March 2018 $200 calls on Facebook and long March 2018 $170 puts on Facebook. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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