Social Media: Another Rollercoaster Year
9 min read.
2020 is expected to be another rollercoaster year for social media platforms. The pressure to be socially responsible will continue to mount for all. In the past year, significant shifts in the way that Facebook manages user data resulted in increased awareness of privacy issues across the company’s portfolio (which includes Instagram and WhatsApp).
Instagram removed ‘likes’ from posts, ostensibly to reduce their negative effects on some users. More recently, each platform has communicated their different approaches to handling political advertising. Facebook was heavily criticised for its decision to accept political ads and not police the truthfulness of their content.
Twitter, on the other hand, has won the PR battle by declaring a ‘no political ads policy.’ Apart from watching the continuing fallout of this controversy and the inevitable slide into an era of regulation, the other key issues to watch this year are outlined below.
FACEBOOK’S VIDEO STANDARDS NEED TO EVOLVE
In 2017, Facebook’s Q2 earnings report indicated that the platform was running out of ad space in its newsfeed. At the time, this was deemed a significant issue for the company. For the first time in its short history, growth in ad spend was slowing.
The first solution was to allow brands to buy advertising through a combined Facebook and Instagram ad platform. This made it easier for advertisers to run campaigns across both platforms, which would ultimately result in Instagram’s revenue growing by a multiple of four (since 2017) to $14 billion in 2020.1
In 2020, Instagram is expected to account for 30% of Facebook’s overall revenue.2 Once WhatsApp’s long-awaited ad offering is launched, we expect it to be integrated with the combined Facebook and Instagram ad platform, which should facilitate strong revenue growth for the messaging app.
Facebook’s second decision, to move to a ‘video first’ model, changed the business forever – and led it to become one of the world’s largest commercial online video platforms. In 2019, most of Facebook’s revenue came from video formats.3
Today, the big issue for the company is the quality of consumer interaction with video ads on the platform. If Facebook is to compete effectively in the long run, its approach to video needs to evolve.
Ads are muted, meaning users must engage with the commercial to hear the content (subtitles are essential). Viewability is questionable, as users scroll quickly past the content before it even loads. The result of this is lower viewing completion rates.
Despite this, Facebook still earns enormous revenue from video advertising, because the above issues are offset by the sheer scale of its platforms’ reach and its targeting capabilities, which are still streets ahead of the competition. However, relying on these competitive advantages will not guarantee advertisers’ support indefinitely – Facebook must do more to facilitate viewer engagement.
THE RISE OF TIKTOK
TikTok is now an important social platform and has already been downloaded 1.5 billion times globally.4 Owned by $75bn Chinese tech company ByteDance, TikTok is a mobile app for creating and sharing short 15-second music videos. It claims to be the go-to place for fun, raw, video storytelling. It has several tools for people to easily create micro-content and displays a personalised content feed to each user. It also has plans to introduce a shopping tool, allowing users to buy directly from brands.
Globally, TikTok has circa 500 million active monthly users.5 In Ireland, daily active users (over 15 years of age) are estimated at 90,000.6
Brand safety has been a concern for TikTok due to the vulnerability of its young user base and nervousness about the platform’s ability to rein in harmful content. There is also a national security investigation in the US into TikTok’s alleged censoring of anti-Chinese content and questions about how it stores personal data.
TikTok is aware of its shortfalls and seems to be learning fast. Currently, it plans to launch its full suite of advertising opportunities in the Irish market in the second quarter of 2020. We recommend a cautious approach to ensure that the requisite brand safety controls are in place before committing to any advertising investment. However, this is a platform to watch.
REGULATORY CONTROL AND MORE SCRUTINY
In April 2019, at Facebook’s F8 developer conference, innovation was de-prioritised in favour of structural changes regarding privacy. Facebook tried to battle the negative perception of its data policies by focusing more on connecting users with their ‘close friend networks’ across its platforms. Facebook has also been on a publicity drive to educate users on how to manage their privacy settings.
Margrethe Vestager, the European Commissioner for Competition, recently announced she will increase her focus on regulating the tech industry. She is taking steps to speed up investigations and is applying a rarely used rule known as ‘interim measures’, that acts as a ‘cease and desist’ order for companies to stop certain behaviours during any investigations. This means that Vestager will not hesitate to act in a fast and effective manner when competition rules are broken. Large fines are inevitable.
The increased focus on regulation could impact Facebook’s plan to merge all three of its platforms under the one ‘messenger’ umbrella. Mark Zuckerberg has always envisioned replicating the Chinese app WeChat, with Facebook, Instagram and WhatsApp all coming together in one application. If Vestager has her way, this ‘super-app’ might not happen.
For marketers, increased and tighter measures may mean a reduction in advertising opportunities over time. With the 2020 US elections looming, many public figures continue to question Facebook’s role in democracy. Brands should remain watchful of how the platform evolves in 2020 and their decision making should be agile.