The Diverging Futures of Social Platforms
Charting the development trajectory of major U.S. social media platforms and dissect what they mean for marketers
We are now well over a decade into the social media era, during which the cultural zeitgeist has become increasingly shaped by public discourses that unfold across social platforms, resulting in various social, economical, and political implications. Following the Cambridge Analytica scandal, the public opinion on social media has decidedly taken a turn for the worse in recent years, as more and more people start to question social media’s net negative impact on society and mental health. A 2020 survey by Pew Research Center found that 64% of Americans say social media has a mostly negative effect on the way things are going in the U.S.
Therefore, it is no surprise that a growing number of social media users are retreating from public-facing feeds to niche, interest-based social platforms — a trend that we analyzed in the last section of our Outlook 2021 trend report. It also makes perfect sense that Facebook, the social network company with dominating market share in the U.S. and most global markets, has made a strategic pivot away from the news feeds to focus on messaging, groups, and local communities to help users make “meaningful connections.”
Up until now, monetization on most social channels has been centered around in-feed ads, be it within the main feed or interstitials between stories, also aided by a robust influencer economy atop. Yet, faced with growingly negative public opinions, most major social platforms are looking for new growth opportunities and charting out their respective future roadmaps. Upon a closer look, a diverging future of social media is starting to take shape, as different platforms pursue different strategic goals and new monetization methods, all of which will have a profound impact on how brands utilize social channels to connect with consumers in the long run.
Let’s take a high-level look at the major social media platforms in the U.S. and ponder where their current trajectory will lead them.
Facebook: The Platform Ambition Never Dies
Facebook is at a crossroads. On one hand, its dominating position as the leading social network company in the world has attracted a lot of public and regulatory scrutiny; on the other hand, the company’s flagship platform has been falling out of favor with the younger generations in the U.S. Facebook has lost millions of users with a sharper decline among younger individuals over the past two years. Today, only 21% of U.S. users between age 12 and 34 say that Facebook is their social media brand of choice. The company overall is still doing great business-wise, but its flagship site is sinking in terms of both attention and reputation, which puts its long-term prospect in jeopardy.
Following the aforementioned pivot towards building, in the words of CEO Mark Zuckerberg, “a privacy-focused social network built around messaging,” Facebook has been making a concerted effort to building out its consolidated messaging platforms with brand-friendly tools, improving its Groups features, and deprioritizing content shared by publications in favor of user-shared posts in its main feed. Over the past two years, it has also launched a Nextdoor competitor and an integrated dating service, all in the name of helping users make “more meaningful connections.” At its latest developer event in May, a heavy focus on Facebook’s messaging platforms re-affirms the company’s commitment to shift to private messaging.
While this approach should be sufficient in maintaining Facebook’s relevance as a social platform for the time being, messaging has become such a table-stake among social media channels, not to mention orthogonal competitors like Apple’s Business Chat or Discord, that it won’t be enough to future-proof Facebook’s namesake service. For a better long-term prospect, Facebook has an undying dream of becoming a platform, a la Apple’s IOS or Google’s Android.
It is no secret that Facebook wanted to be a platform, but it famously missed the boat in the early days of mobile and ended up becoming an aggregator. Yet, this platform ambition has endured, driving it to acquire Oculus in 2014 and start building a VR platform when most of its competitors took a “wait-and-see” approach. Now seven years later, even though Facebook has arguably cornered the VR hardware market after having a minor hit with the Oculus Quest 2 sales last year, VR itself is still far from being a consumer-ready mass media channel that Facebook can hang its hat on. Facebook Horizon, the company’s take on VR worlds for virtual socialization, has been stuck in an invite-only beta phase since its 2019 launch, but it offers a glimpse at how Facebook may evolve as a platform should VR ever take off in earnest. Until then, Facebook will coast along with its industry-leading social graph, global reach, and robust digital ad products, while the company turns its innovative energy to Instagram.
Instagram: Welcome to the Digital Mall of America
Instagram started off as a kitschy photo-sharing social app before being acquired by Facebook in 2012 for $1 billion. Today, it has over one billion users worldwide and contributes over $20 billion to Facebook’s annual revenue. More importantly, unlike the Facebook main app, Instagram has maintained its popularity across age groups in recent years. 65% of Gen Z checks Instagram on a daily basis, while only 34% does the same on Facebook, per Business Insider data. Before TikTok popped onto the scene in 2019, Instagram was the place where much of the digital culture originated, and despite rising competitions, it still asserts a strong influence on categories such as fashion, cosmetics, wellness, and food.
Building on top of its robust influencer economy, Instagram is now on a clear path to become a digital mall as parent company Facebook continues to double down on adding shopping-related features to Instagram. Prior to 2019, brand placements and tagged products already enabled users to discover products and make purchases via Instagram. Over the past two years, however, a series of integrated commerce features have made shopping on Instagram far more seamless and convenient. It launched in-app checkout in March 2019 and made it available to all U.S. businesses in August 2020, before following up with built-in shopping cart features for IGTV and Reels in October.
The platform itself is also becoming more prominently commercial, as Instagram redesigned its app with a dedicated shopping section and added support for influencers to sell products in live video. It recently started testing a new “Drop” tab to showcase trendy and limited-edition items on its platform, further indicating its commitment to experimenting with social commerce features. Instead of being content with revenue from shoppable ads, Instagram now aims to become an ecommerce platform that takes a cut of all the sales made on its app.
This commerce-oriented strategy makes perfect sense for Instagram, given its visual-first nature, robust influencer base, and command on mobile user attention. Plus, the timing is good for Instagram to propel the social commerce momentum. Recent data from eMarketer reveals that in 2020, social commerce surged by nearly 38% in sales, and it’s projected to rise by over 34% in 2021. Despite the impressive growth rate, social commerce is at the early stage of development in markets outside China, as it is estimated to represent just 4.3% of all U.S. retail ecommerce sales in 2021. There is still plenty of room for Instagram to build upon the beachhead it has established and propel social commerce into the mainstream spotlight.
For consumer-facing brands, the growing opportunities of selling directly to consumers via social media platforms like Instagram is becoming evident. However, the question remains whether Instagram can pull off that transformation without disrupting its core user experience to the point of alienating its users and driving them off to less overtly commercial platforms. Facing increasing competition from TikTok and, to a lesser extent, Snapchat, Instagram’s quest to become the digital Mall of America may run the risk of over-staffing its app and reducing its cultural cachet. Nevertheless, brands looking to get a slice of the social commerce pie now have a go-to channel to garner engagement and drive sales.
Twitter: A Multi-Media Creator Platform for All
Twitter is a peculiar presence in the social media landscape: it is culturally significant for being the go-to place for consuming real-time information and commentary on news events and hot topics du jour, but it has been rather stagnant in terms of its user growth as well as its evolution as a social platform. With only 37 million daily active users (DAUs) in the U.S. at the end of 2020, Twitter pales in comparison to the active DAU counts of Instagram (about 140 million), Snapchat (93 million in US and Canada), and TikTok (over 50 million). However, it still has a highly engaged user base, especially among those who work in politics, media, and tech sectors, and thus has sustained its outsized impact on culture.
Compared to other major social platforms, Twitter was notoriously slow to roll out new features and products. Part of it is a lack of strong leadership: CEO Jack Dorsey is well known for his hands-off management style, as he juggles being the CEO of both Twitter and fast-growing payment startup Square while pursuing his personal passion as a wellness guru. In early 2020, Twitter’s new stakeholder, activist investor Elliott Management, reportedly wanted to remove Jack Dorsey as CEO and pushed for a more devoted leadership.
To be fair, it’s not that Twitter has never tried to evolve. In 2015, after live broadcasting app Meerkat blew up at the SXSW festival, Twitter quickly acquired rival app Periscope and subsequently attempted to incorporate live streaming as a key feature of its platform. It even acquired the simulcast rights to some NFL and MLB games in the following years to attract viewers. Yet, Twitter’s interests in shoring up live streaming with costly sports content cooled down by 2019 when it became apparent that, after years of trying, the viewership never quite reached the scale it needed to be economically sustainable. Due to a dwindling user base, Periscope the app was shut down in March 2021, although the live streaming feature lives on in Twitter.
Interestingly, over the past six months or so, Twitter has seemingly rekindled its interests in evolving its platform, rolling out a series of new features that strategically position itself as a platform where content creators can directly monetize their outputs of all formats. This series of new additions stand in stark contrast to its historical inertia, perhaps partly thanks to the push for changes from Elliott Management.
Notably, the company quickly developed and rolled out its live audio product Twitter Spaces at scale shortly after Clubhouse blew up in early 2021, and has started testing Ticketed Spaces so that creators can easily monetize their live chat sessions. It has also added a Patreon-like feature called Super Follows, which allows Twitter users to charge followers in exchange for access to extra content. It acquired interesting startups like news subscription service Scroll and newsletter publishing platform Revue, both of which could further round out its creator toolkit and turn Twitter into a platform where creators and publishers can get paid directly by their fans.
Taking it one step further, Twitter’s latest addition, the long-rumored Twitter Blue subscription service, seeks to directly monetize its power users by offering exclusive perks such as bookmark folders and the ability to undo tweets. It is also aiming to facilitate more cross-platform content sharing as it tests the ability to share tweets as stickers on Instagram stories, so as to ensure that its content can reach a wider audience.
All these creator-oriented features point to a potential strategic pivot in Twitter’s business model away from advertising, the primary revenue source for all major social media platforms today. Instead, it would earn a cut from the revenues that it helps creators generate. For example, it will keep 20% of the revenues generated by the aforementioned Ticketed Spaces. While the creator infrastructure is rapidly coming together for Twitter, whether or not enough users will be willing to pay for content they have been so far enjoying for free remains up in the air.
For brand marketers, Twitter’s new pursuit does not necessarily mean it will suddenly stop being an ad-friendly social channel. Quite the contrary, by transforming itself into a multi-media creator platform, Twitter could make itself more sticky and engaging for its users, which, in turn, could grow its paltry active user base and deliver more eyeballs for brands. In addition, brands may also get to use Twitter as a content marketing tool to engage with its most loyal customers.
Snapchat: All In on the AR Future
Although somewhat flying under the radar compared to its more high-profile competitors like Instagram and TikTok, Snapchat has been going strong over the past year, growing its global user base to 500 million monthly active users. At its 2021 Partner Summit event, CEO Evan Spiegel proudly shared that “nearly one out of every two smartphone users in the U.S.” now uses Snapchat. And it continues to be a Gen Z favorite, as the app reaches 90% of 13–24-year-olds in the U.S., UK, France, and Australia.
One of the reasons that Snapchat is able to carve out its own niche in the increasingly combative social media arena is its singular focus on AR-powered visual communication, which differentiates Snapchat from its competitors. It has continued to improve its SnapKit suite of developer tools, especially its Lens Studio. One recent standout addition is the Connected Lens, which lets two Snapchat users share an interactive AR experience, regardless of whether they are in the same room or miles apart. This brings an important social element to the AR Lens on Snapchat, which so far has mostly been a solitary experience.
Like most social platforms, Snapchat smartly recognizes that it needs to get the creators on board to create video content and AR lenses at scale to keep its users engaged and entertained. This is where Snap’s “flying under the radar” status hurts its growth, as buzzy platforms like Instagram and TikTok continue to dominate the conversation around the “Creator Economy” and attract creators and influencers. Cognizant of its disadvantage, Snap has been building out more user-friendly tools to lower the entry barrier for creators, such as a video editing app Story Studio and a new Creator Marketplace to help businesses to find and partner with Snapchat creators.
In the near future, AR headsets will create even more immersive experiences and unlock new brand opportunities. It is evident that, besides Apple, no other company is better prepared to take on the post-mobile paradigm shift than Snap. The company recently released a revamped set of Spectacles for creators to develop more contextual AR experiences. The main challenge for Snapchat is in the implementation — to make sure they can stay ahead of the competition and grow into the prime destination for AR experiences.
Now with over 500 content partners and 200,000 developers on board, Snapchat is on the right track to make its AR dream a reality, as it continues to push the envelope on what AR experiences could look like on mobile and beyond. In preparation, brands should work with platforms to establish a library of 3D branded assets, explore new consumer-facing use cases, and understand how consumers engage with AR in different contexts.
TikTok: Ground Zero for Digital Culture
Over the past two and half years, TikTok has emerged as a formidable challenger and disruptor to the U.S. social media landscape. When I wrote about its emergent momentum in May 2019, it was evident that this short-form video app had struck a nerve with the younger generations with its unique mix of user-friendly video creation tools, built-in meme culture, and algorithmic feeds. Since then, the growing impact of TikTok has shown no sign of slowing. Per eMarekter’s latest estimates, TikTok’s user base will grow by 18.3% this year in the US, bringing the app to 78.7 million U.S. users in total. Outpacing its social media rivals, an anticipated 37.3 million Gen Z users will flock to TikTok this year, surpassing Instagram’s Gen Z users by 4 million. Adult users of TikTok now spend more time on TikTok than adult Facebook users spend on Facebook, according to eMarketer.
As TikTok grows its user base and expands its impact on not only social media trends, but also the global digital culture at large. Its sustained popularity reveals an interesting direction in which social media is evolving: highly personalized by algorithms and untethered from real-life connections or social graphs. Every user interaction feeds back into the content algorithms and user-friendly creative tools such as “duet” and “stitch” encourage users to participate in the co-creation of content. Ratatouille: The TikTok Musical may be the best example of TikTok’s ability to turn memes into content. The grassroot musical production originated as a viral hashtag on TikTok in late 2020 before being adapted by Broadway professionals into a ticketed virtual benefit performance in January 2021.
When it comes to monetization, TikTok is still in the early stages of developing an ad platform. In April, it started showing more personalized ads to users based on their in-app activities, such as liked videos and interactions with ads. Its ad suite is far from mature in terms of attribution and targeting capabilities, especially when compared to the offering from other established social networks.Yet, brands are already jumping on board to capitalize on the app’s growing audiences and cultural impact. It is understandable that brands would want to be the second Ocean Spray, which saw cranberry juice sales jump after Nathan Apodaca jammed to Fleetwood Mac while skateboarding on a highway. Yet, viral moments are hard to manufacture, and the best that brands can do is to build a closer community with their fans and take advantage of viral moments when they’re brewing.
Unlike its Chinese sibling app Douyin, whose monetization heavily leans on social commerce integrations to drive sales directly for brand partners, the social commerce elements of TikTok has been somewhat downplayed in the U.S., reflecting the difference in market readiness. Still, TikTok has started working with merchants in European markets, including streetwear brand Hype, to test in-app shopping features. While TikTok has run promotional shopping campaigns in the past, the current trials are a precursor to a broader launch of social commerce features that global brands will be able to leverage. If it were to successfully translate Douyin’s success in social commerce to the global markets, that may be enough to give Instagram a run for its money.
Another potential route that TikTok could take is to take a page of WeChat’s playbook and try to grow into a “super app.” Last week, it introduced Jumps, a mini-app program that allows developers to integrate third-party apps into the app. Similar to Snap Mini on Snapchat, Jumps enables brands to prompt TokTok users to take actions (making a purchase, book a reservation, etc.) without leaving the app. Utilizing Jumps could also allow brand advertisers to more easily measure in-app actions as Apple’s new privacy settings restrict access to third-party data. Utilizing Jumps, brands may get a more accurate picture of how their direct-response campaigns on TikTok are performing.
With greater visibility comes greater scrutiny from both the public and regulators, especially regarding its data privacy and censorship practices. The fact that it is owned by a Chinese company further complicates TikTok’s long-term prospects in the U.S. Still, TikTok’s biggest competitive asset is its increasingly entrenched position as the ground zero of digital culture and the go-to platform for democratized creativity. And as long as it stays culturally relevant, it is a platform that brands need to explore and invest in.
Epic: Weaving The Social Graph for the Metaverse
Although Epic Games is not usually considered as an active player in the social media arena today, its ambition in building the metaverse of the future will have a major impact on the future of social media, for online social interactions and user-generated content are things that will be subsumed by the metaverse. And out of all the companies developing “protoverses” today, Epic is best positioned to weave in the social graph for the metaverse future it is building towards, thanks to its ownership of Houseparty and the social graphs of players it owns via its game store.
During the first month of Covid lockdowns, Houseparty reported 50 million sign-ups, a spike that’s around 70 times above normal in some markets. Since then, Fortnite has been positioning Houseparty as a foundational app for in-game communications and socialization, as it added cross-platform voice chat in the game based on Houseparty, extended Houseparty beyond video chat with co-watching of live events, and made it possible for Fortnite users to livestream gameplay to Houseparty.
Over the course of the pandemic, gaming is one of the media categories that have received a significant boost as many turned to video games for an escape from reality. Deloitte reported 34% of U.S. consumers had tried a new gaming activity during the first round of lockdown. Naturally, the increased consumer attention on gaming helped familiarize a sizable audience segment with the aforementioned virtual events being held in protoverse environments. People hosted virtual birthday parties, weddings, and runway shows in games like Roblox and Animal Crossing: New Horizon. For some, part of online socialization has already moved to these in-game environments.
Recognizing the immense opportunities in this realm after some early success, Fortnite has been doubling down on in-game virtual events, hosting everything from a multiday film festival to a week-long concert series on its non-competitive Party Royale island, where players congregate to enjoy a shared experience and interact with each other in real time.
In the future, as Epic continues to develop the metaverse and entice more people to socialize in its persistent virtual worlds, our relationship with social media will drastically change. Perhaps, our online interactions with each other would revert back to a more intimate, personal mode of interactions. It may trigger another cultural shift to get our information “in-person” from friends, instead of from an algorithmically tailored feed.
The Undecided: Reddit, Pinterest, and LinkedIn
Not every social network has a clear roadmap for future development. To me, Reddit, Pinterest, and LinkedIn have clearly all carved out a niche for themselves respectively, but it seems less clear where each of the three would go from here.
Reddit currently bills itself as the “front page of the internet,” but its biggest strength comes from the communities and fandoms it cultivates in various subreddits. Yet it has not released a notable new feature since adding live streaming in 2019 and opening the service to all users last year, which has been met with lukewarm response so far. At the moment, Reddit is similar to where Twitter was last year, focusing on maintenance tasks and showing no clear sign of future evolution.
Pinterest, popular among trend-seekers and great for making digital scrapbooks, is perhaps the least “social” platform of the bunch. Users can essentially get the most out of using Pinterest without necessarily engaging with the social features. For the past few years, Pinterest has been investing in visual search and social commerce as growth drivers, but they face strong competitions from the likes of Google, Instagram, and Snapchat on both fronts, clouding its long-term prospects. A stronger editorial curation may help it better differentiate itself from competitors, but that won’t necessarily solve the lack of social urgency of its platform.
LinkedIn’s future is undoubtedly intertwined with the future of work. With the rise of hybrid work and the creator economy, there will be a need for a recruitment platform built both for creators and freelancers as much as it is for companies and headhunters. LinkedIn has a decent shot at becoming that platform, but it is hardly doing much these days to evolve its platform while the way we work starts to fundamentally shift. Since it’s owned by Microsoft, there is also a missed opportunity of integrating with the ubiquitous Office 360 suite of applications, especially Teams.
In conclusion, most of the major U.S. social platforms are starting to diverge in their approaches to monetization and growth drivers, which means that brand marketers need to better understand the long-term goals of each social platform, and activate and test on the ones that align with your choice of marketing strategies. Different social platforms already offer different brand opportunities today, and those differences will only grow wider.
The future of social media is dynamically developing and we here at the Lab are keeping a close eye on all the innovations that are popping up. If you wish to start a conversation around the trends highlighted in this article and discuss how your company can future-proof your social media plans, please reach out to our Group Director Josh Mallalieu at josh@ipglab.com.
