I’m off the deep end, watch as I dive in“Shallow” from A Star Is Born
I’ll never meet the ground
Crash through the surface, where they can’t hurt us
We’re far from the shallow now
One of the most interesting tales I’ve heard told about social media in 2020 is this: Once upon a time, ten years ago, social media was a story about the wonders of technology; five years ago, it became a story about unrivaled business growth; today, it is a story about politics.
What will it be tomorrow?
(Credit to Longform for the social media “story” narrative.)
Here are some predictions I have, based on reading and studying news, trends, and reports from all of the major social media networks the past several years.
You will see more ads. Social media ad spend will increase in 2020.
You’ve probably seen this or experienced this already as a consumer or as a marketer. Content distribution is changing. Product discovery is changing.
Organic is saturated, and ads are taking over (as many as one out of every four posts, according to some estimates).
This happens with any network over time.
As networks scale, so too does the amount of content. There is much more noise, and much less signal.
Combine this with the law of clickthroughs, and the result is that brands need to pay to have their content and products seen on social media. And as demand for ads increase, social networks respond by increasing the ad inventory. After all, Facebook and Instagram, et al, make their money from ads.
- 171% increase in CPM Facebook
- 20% increase in CPM Twitter
- 44% increase in CPM LinkedIn
- CAC has increased by over 55% in the last five years.
So that’s part one: Social networks are incentivized to increase ad inventory and advertisers are more than willing to pay.
The second part is that consumer behaviors are changing. In 2019, for the first time ever, more money will be spent on online advertising than television advertising.
The chart above comes from an article in The Correspondent, which outlined all the negative consequences and risks of online advertising today. Last year, $273 billion was spent on online advertising worldwide (of which social media is a major percentage), and according to the article, the bubble may burst at any moment.
The idea of a bubble implies that there’s nothing really behind the rise of online ads. It’s a house of cards that will be knocked down and exposed. I disagree. I believe that paid promotion is the way that content distribution evolves as networks scale and as those same networks are incentivized to grow ad revenue. And when it comes to the viability of ads as a channel for marketers, I’m with Web Smith of 2PM:
Savvy brands use performance marketing as a secondary tool for growth and it’s working for them. There’s no reason that this will change in the near future. Online advertising is not dot com bubble 2.0.Web Smith, 2PM
What does this mean for organic posting?
Fear not, organic posting is not going away. It’s never going away. With organic, there’re the obvious brand benefits to creating a solid organic posting strategy: quality, positioning, community, earned media. And, as Web Smith hints at in the quote above, paid is not a sustainable distribution strategy on its own. Paid is a “secondary tool for growth,” best used strategically to go into new markets or double-down on existing, validated efforts. You build something of value for people (a brand, a product, an experience), then you layer paid on top of that.
(The next predictions won’t be so long, I swear.)
Instagram and Pinterest will become shopping-first e-commerce platforms
What does the market crave?
This can look a lot of different ways for a lot of different networks. LinkedIn, for instance, is making learning easier. Twitter is making conversations easier.
For Instagram and Pinterest, they want to make shopping easier.
Already, both platforms are go-to sources for product discovery. Instagram has a slight edge in being further along the buying journey. People see an Instagram ad and buy the product. People see a Pin and get inspired to find out more.
Regardless, the future for both platforms is e-commerce.
Already, Instagram has announced Checkout for Instagram, which is an in-app shopping experience. You can see something in your Instagram feed and buy it without ever leaving the app.
And Pinterest has a number of shopping-focused features:
- Shop the Look, which highlights the items in a photo you can purchase. Click an item to go to that brand’s website. These pins can come from the brand itself or from any number of Pinterest influencers (who then get a cut of sales)
- Catalogs, which allow you to upload an entire product catalog to feature on Pinterest
Social networks will diversify into … payment processing.
The major strategic bet for both Instagram and Pinterest is e-commerce. They both want to help consumers find and purchase products within the walls of their network.
Facebook wants to move further into privacy. In the near-term, this means messaging, and I’d expect Facebook to follow a similar path to how things work overseas where apps like WeChat are so tied into daily life that they handle everything from payments to vacation planning. How do you monetize messaging? You don’t. No one wants to see ads in their SMS. But what you can monetize is being the go-between for daily life and interaction.
You probably heard the bluster about Facebook’s new digital currency, Libra. That’s a very long play for them.
What’s more interesting to me is the recent announcement of Facebook Pay, which will allow you to make payments directly through Facebook platforms like WhatsApp and Messenger.
Shopping is likely to get a ton of the headlines, and deservedly so.
Social commerce could be one of the most seismic changes for brands and businesses since e-commerce stores hit the market.
But the underpinning of social commerce — and the mechanism by which this move makes so much business sense for social networks — is payments. Instagram and Pinterest are set up to take a small percentage of sales that occur on their platform. Facebook, if it continues down the path of payments (with a long-term play toward digital currency like Libra), opens up a huge revenue opportunity with payment processing fees.
It remains to be seen if other platforms like Twitter and LinkedIn are interested in this approach, too. For now, it seems like they have room to grow revenue with better ad tech and more ad volume.
Creators will be influencers. And everyone can be a creator.
What is an influencer?
At the most basic level, you’re an influencer if you have an audience that trusts your opinion. Some might argue that an influencer also must have a large following, but we’ve already started to see that evolve as “influencer” has come to mean anyone with a Kylie-Jenner-level of millions of followers to niche, micro-influencers with followings in the 10,000s or even 1,000s.
If you look at influencers from another lens, it’s very much like hyperfocused social proof. You used to see social proof happen at scale (think: the number of shares on a blog post); now social proof is much more tied to trust (think: logos on websites, your friend’s recommendation to you).
Brands have started to notice this trend, which is why micro-influencers have been on the rise.
Social networks are starting to pick up on it, too.
Take Instagram for instance.
They recently came out with a new designation in the app for Creators. This is huge! The only other designation they’ve made before is individuals versus businesses. That was foundational, too: the separation of buyer and seller.
With Creators, what Instagram is essentially saying is that they support:
- Those who sell stuff
- Those who promote the stuff being sold
- And those who buy the stuff
“Stuff” in this case can be more than just a product. It can be content. It can be anything. By empowering Creators, Instagram is acknowledging how important this group of people is within the social media ecosystem.
Without quality content, attention suffers. Without attention, you can’t show as many ads. Without as many ads … well, you know where I’m going.
Similarly, without influencers helping distribute products, then product discovery suffers. When product discovery suffers, you can’t sell as many products.
Without Creators, then Instagram is like an Amazon without recommendations.
So look for Creators to be on the rise, not just on Instagram but across all sorts of social channels: Facebook, Pinterest, LinkedIn (Influencers), Twitter. You can already get a sense for the value of Creators by looking at the App Store — how many apps are there these days for making awesome, beautiful content? These apps make their money from business users today (because businesses have a greater willingness to pay for quality, fast content creation). But even this paradigm might shift as Creators are recognized and compensated for their place in the market.
TikTok is here to stay
Pros for TikTok:
- Rapid user growth. The app hit 1.5 billion downloads this month, beating Facebook and Instagram in downloads thanks to growth in international markets (India, China).
- Has a ton of resources at its disposal. TikTok is owned by the Chinese startup ByteDance, which is valued at $75 billion
- Not US-based (and therefore brings a fresh viewpoint to social media)
- Popular among Generation Z. 69% of users are between the ages of 16 and 24
Hesitations about TikTok:
- The risk of government regulation. There’s been a lot of attention aimed at TikTok by U.S. lawmakers who want to know more about its ties to the Chinese government
- Flash-in-the-pan longevity. We’ve seen many, many other social media apps come and go. Though none have been as successful as TikTok, there are already some whispers about slowing growth
- Unproven ads model. Too early to tell how TikTok ads will perform for the company.
Will TikTok become the next Instagram (prince of social media), the next Snapchat (imitated but still alive), or the next Vine (here then gone)?
Opinions vary wildly on where the app will end up. But for now, and for the next year or more, the app figures to play a prominent role in the social media marketing landscape — whether it’s forcing competitors to adapt or whether it’s carving out more and more space in the market.
If nothing else, we should not underestimate it.
No one is more aware of the opportunity and the challenges than the TikTok team. Their U.S. General Manager spoke out this month to address some of the concerns about the app and to talk a bit about its roadmap. Among the things she mentioned were:
- Building out a team of U.S.-based leaders
- U.S.-led content moderation
- Localized community guidelines
- Prioritizing data security
So we know they have a plan for thriving in the U.S.
And, thanks to a leak, we also know how they will woo brands with advertising opportunities in five categories: the hashtag challenge, a brand takeover, in-feed video, branded lenses, and a “top-view” video. These ads are not cheap. Hashtag challenges, for instance, cost $150,000 per day minimum, and they work a little something like this:
A gummy bear stands alone on a cardboard-box stage singing Adele. “Never mind, I’ll find … “ The camera holds a close up on the candy performer before it pans out to the audience, revealing a sea of gummy bears. The chorus rings out from the crowd: “ … someone like you.”
And that’s how TikTok is done (#haribo, #haribochallenge)
There’s a lot still to figure out. For instance, those ad scenarios don’t leave a lot of room for the long tail of ad spending that is what has given Facebook and Instagram their huge revenue numbers. Plus, TikTok was spending $3 million per day in the U.S. to acquire new users, so how sticky will the app be once spending has slowed.
Nevertheless, TikTok has exposed an underserved portion of the market that they are serving very, very well.
Will the other social networks be able to catch up?