Social media marketing is changing. In the wake of the Facebook privacy scandal, GDPR and the general awareness of privacy, social media platforms are adapting their brand image and the way they provide certain marketing services. Some are trying to monitor and regulate polarising conversation, while others are working hard to revamp public perception of their business model. In any case, it’s clear that times are a-changin’. How and why they are changing, however, is a matter of debate.
Social media had its fair share of scandals before 2016, but none match the intensity and global outrage that the current privacy issues caused. Facebook, as ever, was the top dog back then. With more than 1.79 billion users and counting, it showed no signs of slowing down. They recorded a massive $26 billion in ad revenue in 2016, helped in part by the increasing number of businesses using the platform and by the growth of Instagram. To put it simply, Facebook was aiming for the stars and acquiring any obstacles that could potentially get in the way.
Twitter was experiencing something slightly different. For the first time, its ad revenue stopped growing, resulting in the start of a decline. (Unfortunately, a sign of this to come.) It saw a slight growth in overall users, but it continued to record a net loss. In 2016, its net loss was $167.1 million, showing the fragility of the service. In short, Twitter was struggling.
As a counterpoint to Twitter, LinkedIn experienced growth in 2016, with total revenue increasing 35% year-on-year to $861 million. This was partly due to their new mobile experience, which was a much-needed upgrade that placed it on par with its competitors. LinkedIn also made big changes in other areas, as it was acquired by Microsoft in June 2016 for $26.2 billion. Things were looking promising for the company
Minor mentions should go to Google+, which was still alive and kicking with more than 418 million users. Snapchat was also exploding in popularity, with its quick and easy image sharing service being extremely popular with a younger demographic. Remember Vine? That was still around too, with more than 40 million users. Things were looking promising for the social network, which later closed down in December of the same year due to the encroaching competition. Ouch.
These changes highlight the volatility of the social media landscape, as it was becoming increasingly competitive as companies fought for the steadily decreasing amount of new users. Twitter was already feeling the pinch. Unfortunately, this was a sign of things to come.
Privacy. If anything has changed in the last 3 years, it always involves that word. You’ve probably heard of Cambridge Analytica, even if you don’t actually know what it is. They utilised an app called “This is Your Digital Life”, which allowed them to gather the data of those using the app. This was done with their consent. However, the app also allowed them to gather data from their friends too. This data was then used for various political advertising purposes.
Once this was made public, Facebook suffered for it. Facebook’s stock price fell dramatically, down almost 40% initially. It has since recovered, but it hasn’t reached the same heights as it was before the scandal hit. As a result of the scandal, it was feared that attitudes towards advertising would become sour. However, this doesn’t appear to have happened. While Facebook has announced new features to promote goodwill and improved functionality for its users, it’s ad revenue continues to rise. This is occurring at a slower rate, and Facebook predicts that this slower growth will continue until 2020. Is this a sign of things to come?
After a slew of falling profits and doomsday-like commentary from analysts and experts, Twitter seems to be on the rise. Its ad revenue was up 21% in the first quarter of the year, with $727 in total revenue. This promising progress has resulted in a stock value growth of 32%, which is a far cry from the issues that plagued the platform in 2016. They attribute this growth to their focus on identifying malicious behaviour, which they say has resulted in an 18% drop in those types of comments. This, in turn, has made the platform more attractive to advertisers. Once seen as a lost cause, the phoenix appears to be rising from the ashes.
LinkedIn appears to be performing well, with Microsoft reporting an increase in LinkedIn sessions by 22% year-on-year. Revenue has also grown by 25%, which shows that it’s still appealing to advertisers. However, this growth has slowed every quarter over the last year, suggesting a steady decline. Microsoft has been focusing on integrating new technology, such as AI, while also bringing LinkedIn up to speed with other social networks. This doesn’t appear to have spurred growth like they were expecting, though they could be taking a slower approach to their updates.
Other networks have dealt with privacy concerns in other ways. One standout example of this is Google+, which shut down in April 2019 because of a security issue that affected 52.5 million users. Google stated that no data was accessed, but they decided that the issue was large enough to warrant a big response. Snapchat encountered a bit of resistance when its Snap Maps feature was first introduced, but it’s still experiencing growth. Its users are up 8% to 203 million, while its revenue received a 48% increase in revenue to $388m.
If you’ve made it this far, you might be thinking that all looks good for the most popular social networks. But that’s not entirely true. New challenges are on the horizon, and new competitors are rising up to take their crown.
Growth in western markets is slowing down. That’s abundantly clear, as the largest social networks are having to innovate to keep up. While revenue and the rate of growth are increasing, the year-on-year growth is generally slowing down. As a whole, the privacy scandal doesn’t seem to have affected the social networks as much as they feared, but users are definitely savvier when it comes to these issues. This should be a good thing for all involved.
Other competitors are also rising in emerging markets. WeChat, QQ, and QZone are social platforms that dominate the Chinese market, which is experiencing huge growth as the population-heavy country gains greater access to the internet. Interestingly they’re also owned by the same company, Tencent, which regularly acquires new companies in its effort to dominate the market in China and increase its global reach. (Sound familiar?) We wouldn’t be surprised if they tried to promote their platforms to other areas, though the current hesitation around Chinese products may prove difficult to overcome.
We should also mention Tik Tok in this category, as it’s a new contender that appears to have found its footing. With an initial release in September 2016 for western markets, it had a slow rise to popularity before exploding in 2018. It’s owned by ByteDance, a Chinese company. In October 2018, it was downloaded 68 million times worldwide, and ByteDance is valued at $75 billion, making it the most highly-valued privately held company globally. One to watch out for.
The social media industry is constantly changing, as companies rise and fall and scandals appear and dissipate before our very eyes. As marketers, it’s important that we remain aware of changes that could affect the advertising process, as predicting these events and trends is becoming a crucial part of being a standout social media advertising provider. Please click here for more details on our social media marketing services, and don’t hesitate to contact us if you have any questions.