People’s attraction to any platform or channel ebbs and flows over time. The trend of social media is no different. Recently, it is becoming clear that users are disengaging with social media platforms. Reasons vary. Some cite the lack of privacy, while others point to the fact that social media can be a breeding ground for trolling.
Companies are already doing their part to protect their brands from the upcoming social media trend reversal.
For example, advertisers are cutting budgets and shifting focus to other platforms. Bottega Veneta, in early 2021 announced it to stop posting on Instagram and Facebook. Talking about Twitter, following Musk’s controversial takeover, more than 50% of the advertisers have already left.
Consumers are growing wary of excessive personal data collection:
And even social media companies themselves have started to lay off their employees preparing for the worst. For example, Twitter’s new CEO Elon Musk, and Meta’s Mark Zuckerberg have recently fired tens of thousands of employees. On the other hand, Pinterest Inc. is slowing hiring and has laid off some recruiters due to the uncertain digital-ad market.
Many companies rely solely upon social media to promote their products and services. In fact, Facebook alone generates $40 billion in revenue from advertising. 93% of marketers use social media for promoting their products and services in some way. So, the downfall of social media can quickly affect the marketing strategies of companies.
How social media downfall affects different fields of businesses:
|Business Field||Impact on Social Media||Consequence|
|Online businesses||Negative digital reach||Reduced interaction with customers, making it hard to promote products and services|
|Advertising companies||Decline in ad visibility||Less revenue generated from campaigns|
|Event organizers||Inability to promote events||Fewer attendees, resulting in less profits|
|Retailers||Inability to advertise||Decrease in sales and profits|
|Marketing firms||Lack of marketing tools||Strategies turn ineffective|
|Travel companies||Impeded access to customers||Decline in bookings and income|
|Entertainment companies||Unable to market services||Lack of customers, hence reduced profits|
|Media companies||Decreased access to potential customers||Reduced audience|
|Education companies||Harder to reach students||Lower enrollment and income|
|Consultants||Inability to connect with customers||Reduced profits|
|Public relations firms||Blocked access to customers||Hindered reputation building|
|Bloggers||Reduced access to readers||No/Fewer readers and less revenue|
|Affiliate marketers||Inability to promote products and services||Fewer sales, fewer income|
|Social media influencers||Decreased reach and engagement||Lower income from sponsorships and endorsements|
|Freelancers||Lack of access to clients||Fewer projects i.e. reduced income|
And guess what, the reversal is well within sight!
The rise of Social Media
First of all, what caused social media to come this far and high? Social media’s rise began in the late 1990s, with the first social media site, Sixdegrees.com, founded in 1997. And as of October 2022, 59.3 percent of the total global population uses social media. Over the past 12 months, social media user numbers have continued to grow. In fact, despite a social media downfall being in sight, the truth is that 190 million new users have joined social media since this time last year. It’s pretty easy to understand why individuals and businesses invest so much in social media now. However, the rise of these platforms, which made social media what it is today, has a story. Here are the drivers behind the rise of social media:
Need of a digital society
With the growing number, all internet users started getting connected with one another in some way or the other. This gave rise to the need for an online society, where people can interact with each other, share information, and express their thoughts. And guess what, this need of having an online society resulted in the rise of social media which has now become an integral part of our lives.
Six Degrees provided a platform for users to create their own profiles and connect with other users in the late 90s. This was followed by the launch of Friendster, a social networking platform in 2002, which allowed its users to upload images, videos, and music, get connected with others, and comment on their posts. Society’s need of having an online presence led to the launch of social media giants such as Facebook, Twitter, and Instagram.
Social media has provided us with an easy and effective way of communicating and staying connected with our family, friends, and colleagues. With the help of social media, we can easily share updates about our work, post pictures, and videos, and even voice our opinions about different topics.
Most people think that the rise of social media was led by the people using it. However, there are various other factors in the game;
Business interaction with customers
Businesses, that wanted a digital way to reach their customers, were the key driving force behind the rise of social media. They made use of social media to establish relationships with customers, increase brand loyalty, and get customer feedback. The use of social media, according to a recent study, is really effective. Businesses that invest in social media marketing see an average return of $2.80 for every dollar spent. That’s huge!
It is social media that also gives businesses the opportunity to create organic content. Social media gives you the opportunity to connect with fans and followers every time they log in. This should inspire you to keep your social media posts entertaining and informative for your followers. Your followers will be glad to see your new, organic content in their feeds. They keep you top of mind, so you’re their first stop when they’re ready to make a purchase. This is the reason that this type of content allows businesses to connect with their customers in a more personal way. This also helps businesses show their true personalities and build trust with their customers.
In fact, businesses always needed a way to reach audiences; they were just not getting it. Traditional marketing like television, radio, and newspapers ruled in the past, As time changed, and with the rise of the internet, businesses had to keep up. Social media has been the result.
The Drivers of Social Media Downfall
Social Media and Democracy in the US
The Pew Research Center survey found that, except in the US, a majority of global citizens view social media as beneficial for democracy overall. However, US citizens largely viewed social media as a bad thing for democracy. As the US is the biggest market for social media, this has a significant impact on the social media trend. Particularly in the US, people are of the opinion that social media undermines the election process and erodes trust in government. And, they are not wrong, maybe. We have all witnessed the 2016’s US presidential election and its aftermath. Thinking back it is a bit scary to see how social media was used and misused by people looking to manipulate public opinion.
No Diversification in Social Media Advertisement
Social media websites show various types of ads to users. Necessary for businesses to reach potential customers, ads are tailored to users’ interests and demographics. Ads are displayed in newsfeeds, pop-ups, and sidebars. Ads can be text, image, or video-based. Like that, advertisers can target specific audiences and track performance. So, by providing relevant ads, social media websites generate revenue and help businesses grow.
However, too much ad exposure can lead to people’s reduced interest in social media. Ads can be intrusive, distracting, and annoying. They can reduce user engagement and create mistrust. Too many ads can clutter newsfeeds and negatively affect user experience. This can lead to users abandoning the website and seeking alternative online services. To avoid social media’s downfall, websites must carefully manage ads and ensure they are relevant to users.
It should look more like this:
|Instant Experience Ads||8.4%|
|Augmented Reality Ads||0.01%|
Instead, most social media sites still show the same, boring, images and video ads more than 75% of the time.
As we have seen in recent times, users have started to get really annoyed by Facebook ads. Not only are they intrusive but they also take up a huge portion of the screen. This makes it extremely difficult to scroll through the feed and find the content that you are actually interested in. People are starting to become more aware of trackers. As a result, people are completely abandoning platforms like Facebook.
Social Media Profiles
In 2022, the number of people using social media has not decreased by much. However, some forms of social media are better to generate revenue than others. For example, Facebook is more effective for businesses than Instagram for generating revenue. Whatsapp is still one of the most popular social media apps for messaging, however, it does not generate much revenue.
So, people’s reduced interest in one specific type of social media, the one where public profiles are a thing, causes the overall social media field to decline.
Examples of such social media are Twitter, Instagram, Facebook, etc. The trend of such social media sites as Facebook and Twitter has been pretty bearish this year, as we’ve witnessed.
As your social media profiles can be used against you, people are becoming more cautious. Cautious in the way that they are abandoning platforms that are the most profitable for social media companies. Rather, they are heading on to Reddit. Reddit, though, generates very less revenue, but its anonymous profile is much safer in people’s view.
Personalities like Elon Musk have warned people about the negative effects of social media, that it makes you feel inferior. Now, such small signs have played a great role in people’s reduced interest in social media. Also, people are becoming more aware of how social media companies sell your data to the highest bidder. Yes, they do, and the awareness of this has made people think twice before using social media, especially in business. However, the problem is not even about the data being sold, but the fact that people are not being informed about it.
Social Media Discouraging free speech
Andrew Tate and Donald Trump are just a few examples of people who have faced consequences for expressing their opinions on social media. Although they were not the most pleasant posters, this has made people think twice about what they post online. As a result, people have had to become more careful of the consequences of the words they use there. No single person should be able to control what people can or cannot say in a public forum. When Musk took over Twitter, he promised to make Twitter a haven for free speech. But he is struggling to maintain Twitter as a thing. The fate of social media heavily correlates with Twitter.
Lack of meaningful interaction
Social media is used to connect with people and share ideas, but it is not always successful. Users are so focused on getting likes and followers that they forget the purpose of social media. They are also getting less engaged in meaningful conversations on social media. At least, nothing more than a bunch of people fighting in the comments. This has contributed to the decline in the use of social media. Like, who really cares about the amount of likes you get? In reality, what helps it is not even about the number, it is about the quality of the conversation. This is why people are slowly getting bored and leaving social media platforms.
Fake news is one of the biggest problems on social media today. The problem is that it is difficult to distinguish between fact and fiction. In fact, inaccurate news has created a lot of confusion and mistrust among social media users. This has made people more skeptical of the information they are getting from social media.
Yes! As TikTok and YouTube shorts have become increasingly popular, people have started creating cringe content. Even facebook’s short videos and Instagram reels add up. This has led to people getting more annoyed by the content they are seeing online. When one hears of social media, cringe comes up in the mind of a lot of people. While this factor is not the biggest contributor to the downfall of social media, it is still a factor.
How much did 2022’s wall street decline impact social media trends?
After a decent recovery, the S&P 500 is still 19% down this year, and we are writing this in December. Now, this has had a direct impact on the fate of Facebook’s or Twitter’s stocks. The declining US economy is causing a dip in the number of social media users, as well as the company’s profits. As the majority of tech and social media companies are located in the US, they have seen a significant drop in their stocks and profits. Also, their user base has reduced.
But the question here, is, how much did this decline really impact the stable upward trend of social media? It did to an extent or two. However, it could have been better. For example, meta’s stocks have fallen by over 64%. Meta’s owner, Zuckerberg, has lost over $90 billion in 2022. A better outcome would have been if the tech giant had started diversifying its investments and resources, instead of accumulating its wealth in the US economy. And maybe, the companies could have shown a better future of social media to its users, rather than ones like the “Metaverse”.
As social media is a big part of the consumer economy, it directly influences the stock market. So, the damage is mutual. Social media has contributed to a downtrend in the stock market, also resulting in the downfall of many companies. Cousins of social media, like online streaming services, also got caught in this economic downfall.
Now, when talking about the downfall of social media, the alternative is what needs to be discussed. To start, people should focus on having meaningful conversations with friends and family. Face-to-face interaction should be given priority. Additionally, people should invest more time in non-digital activities. Whether it’s reading a book or taking a walk, these activities can be beneficial in terms of mental health. In fact, as mixed reality is going to disrupt reality itself, we simply may not require social media. For example, in mixed reality, there is no such thing as real or virtual, as both worlds are intermingled. And if we go social in mixed reality, then the interaction will not require any other physical devices like smartphones at all. We might well be heading toward that era.