By Yuval Ben-Itzhak, Chief of Strategy at Emplifi.
Today, social media is ubiquitous. The platforms we have come to know allow billions of people to consume news, stay connected and, increasingly, interact with bands. And they are just as valuable from the brand’s point of view too.
Social media, and the data it collects, are an invaluable tool for marketers – allowing them to sympathise with and understand customers on an incredible level. We’re already seeing the power social media has to impact consumer’s buying choices through targeted advertising, influencer relations or brand communities.
The number of people using social media has grown exponentially. And this shows no sign of slowing down, with the number of social media users projected to reach more than 4 billion by 2025. There’s no doubt that the pandemic helped boost social media activity. As the physical world shut down, consumers went to the digital realm to experience the communication, shopping, and other experiences they were missing.
The past year has been a whirlwind for the social landscape, as traditional platforms fought to maintain and grow their user base, amidst the emergence of new kids on the block like Clubhouse and TikTok. The accumulation of these recent events made the major platform’s recent Q3 earnings even more interesting than usual.
Facebook and friends
Facebook’s Q3 results showed that marketers are still turning to Facebook and Instagram to reach their audiences and satisfy their altered shopping habits, even as the world continues to emerge from the pandemic.
The tech giant may have slightly missed revenue estimates, but it still saw its user base grow. Data has shown that marketers spent 43.4% more on Facebook and Instagram advertising than they did in Q3 2020.
Overall, Facebook and its family of apps continued to go from strength to strength in 2021. As businesses anticipate a future that is social-first, brands’ social media investment is growing faster than ever. Social platforms have become an essential part of consumers’ lives, and brands know they need to be active in spaces like Facebook, Instagram and WhatsApp to maintain and nurture their relationships with consumers.
Facebook is steadily investing in social commerce features which will make not only product discovery, but also purchase and post-purchase care more seamless for consumers on its platforms. While platforms like Snap and TikTok continue to innovate with AR, e-commerce partnerships and other commerce features, it’s Facebook’s family of apps that has the existing audience, the resources and the roadmap to offer the full commerce journey. As I see it, the platform stands in good stead as we enter 2022.
Steady does it
Similarly, Twitter’s solid Q3 results reflected the platform’s stability. Since the platform announced aggressive revenue goals earlier in the year, with social commerce as a key part of their plan, I expect that investments in The Shop Module for product discovery and tests with Shoppable Cards to drive product purchases, could be the source of future revenue for Twitter.
However, with its continued focus on quick, short lived-content, Twitter is lagging behind other platforms when it comes to tangible investment in social commerce. Whether this will lead to a future shift in ad revenue to platforms on which there is greater engagement around commerce remains to be seen.
Twitter’s 2021 Q3 results came shortly after the platform announced the sale of mobile ad network MoPub for $1.05 billion – three times the price it paid for it. MoPub has been a huge revenue stream for Twitter, so this is an interesting move that may signal to advertisers that the platform is maturing.
Overall, it’s been a slow burner for Twitter. However, with investment in features to help tackle online abuse and the introduction of features such as Communities, which is designed to help generate more conversation on the platform, Twitter is in a prime position to see continued growth in the new year.
For Twitter, continuing to innovate will still be paramount. Although SNAP and Facebook were significantly impacted by Apple’s privacy update, competition for users is still fierce…
It’s all hands in for SNAP
It was unsurprising that SNAP was impacted by the Apple privacy changes, but the continued growth in users is a positive sign. The platform continues to leverage its leadership in the camera-first approach, given its early investment in AR technologies, further doubling down to propel its social commerce offering and enabling it to differentiate itself from competitors.
Social commerce is on track to become a significant sales channel for B2C brands and for the platforms, it’s a race against the clock to see who can innovate fast enough to win consumer mind share and branded commerce budgets.
Recently, SNAP proved they understood this, by collaborating with Shake Shack in New York, to add a layer of AR to the shopping experience. The technology allows consumers to virtually try on merchandise via the Snap Shack lens, or use their in-store mirror, before making their purchases via Shopify.
Despite a fantastic last few quarters, headwinds are heavy for SNAP as Instagram and TikTok grab more and more eyeballs, especially among the all-important Gen Z cohort. Ultimately, their feeds are better optimised for ads to display. Over the coming few quarters it will be interesting to see how SNAP’s ad business can adapt to changing user demands, and continue the growth seen over previous quarters, or whether its social commerce offering will be its rocketship. Either way, I’m excited to watch the platform develop in 2022.
Making way for TikTok
Having seen sky-rocketing growth during the peak of the pandemic, TikTok has been shaking up the social media landscape. It is undoubtedly a platform with huge potential. Part of its success is due to the platform’s unique bite-sized video content, which other platforms like Instagram have since emulated. And more recently, it seemed the tables had turned, with TikTok announcing the testing of an Instagram-esque Stories feature.
TikTok’s iconic short clip format created an exciting new space for brands to interact with customers – particularly Gen Z, who have seemingly claimed the platform as their own. However, the addition of a feature like Stories, could give brands a new opportunity to shake up their approach. Brands could add urgency to the otherwise endless swipe-able content, by including discounts or competitions within disappearing videos.
On the other hand, the phrase ‘if it’s not broken, don’t fix it’ also springs to mind. While other platforms have adopted the Stories feature, it really only seems to see mass adoption on Instagram. So the big question for the coming months is, will TikTok be edging into other content formats or will they stick to their core strengths?
As the social media landscape continues to evolve, there are endless opportunities for all involved – platforms and brands alike. With the upwards trend in AR and VR, especially with Facebook’s (or should I say Meta’s) recent push into the metaverse, as well as purpose driven campaigns and the social commerce boom, there’s plenty of room for further growth for the major platforms. The social media giants need to keep in mind that authenticity and transparency will be the key to keeping their users engaged and brands invested. Those who get that right, will be the winners of Q4.