The Evolution of Social Media

Samantha Ho
Sep 10 · 4 min read

In this day and age, social media is all the rage with individual users and corporate bodies tapping on the synergy of online community networks formed over interactive Web 2.0 Internet-based applications. With social media channels growing exponentially since the early 2000s, it comes as no surprise that 42% of the world population are daily active users, who spend a whopping average of 2 hours 22 minutes per day on social networks and messaging.

In general, social media is understood as the use of online communication in a variety of forms to create communities and networks where users share information through mediums such as text, audio, and video. Since 1997, the world has witnessed the evolution of social media starting from the very first social network Six Degrees, eventually taking on various forms of platforms including blogs on Livejournal and Tumblr, social networks by the likes of Friendster, MySpace, LinkedIn, Facebook, MySpace and media sharing platforms such as Youtube, Twitter, Instagram, Snapchat, Vine. Today social media has become highly integral to people’s lives and will continue to be so in years to come.

Quick Factsheet

  • With the world population growing at 1.1% (84 million) between January 2018 and January 2019, growth trends have followed through with 9.1% (367 million) for internet users and 9% (288 million) for active social media users.
  • Likewise, mobile users have increased by 2.0% (100 million) and mobile social media users by 10% (297 million). In 2018, smartphone users have recorded over USD 100 billion for in-app expenditure.
  • In terms of active user accounts, Facebook ranks highest with 2.2 billion users followed by Youtube, Instagram — which explains the bulk of media expenditure (84.9%) dedicated to Facebook in 2018.
  • To tap on the growing user base and consumer reach, social advertising expenditure has jumped up by 27% year-on-year in 2019 Q1 — of which Instagram spending records a 44% increment as it rose to become one of the most engaging platforms in 2018.

Upcoming Trends

As with any digital industry, new trends are constantly arising within social media — Hootsuite lists the top 5 social media trends for 2019 to be:

  1. Content personalization to rebuild trust
  2. Usage of Stories for engagement
  3. Bumped advertising budgets to overcome declining organic reach
  4. Social commerce adoption
  5. In-app messaging for 1:1 service experience forecasts the global social media management market to grow from USD 9.2 billion in 2018 to USD 17.7 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 14.1% during the forecast period. Major factors identified to accelerate the market include the need to increase Return on Investment (RoI) on social media strategy, the increased focus on market and competitive intelligence, as well as the need for social media measurement to enhance the customer experience.

Investments in Social Media

While cynics may shun tech investments now that the social media landscape is dominated by giants such as Facebook and Youtube, the savvy investor is well aware that fresh opportunities are bound to be around the corner.

Despite social media startups not adopting proven business models, investors are constantly keen to put their money down mainly due to the former’s ability to attract an exponentially increasing user base of social media-savvy millennials. A fine example would be Snapchat, which scaled with rapid app adoption among youths due to the ephemeral 10-second (currently extended to 60-second) videos. Even when Snapchat was recording no revenue, Facebook offered USD 3 billion and Google was rumored to offer USD 4 billion — but the startup rejected all acquisition offers to enter 6 rounds of funding and rake in almost USD 650 million. As of 2018, Snapchat has attained a USD 10 billion valuation and is due to enter yet another funding round to ultimately push its valuation up USD 19 billion, possibly heading towards an IPO. At such sky-high rates of growth potential, it comes as no surprise that investors are aggressively pumping funds into social media startups.

Click here if you want to invest in Social Media related US stocks!

Samantha Ho

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QARA is a fintech startup that provides asset management services through the AI deep learning technology.

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