Social Media certainly had an interesting year in 2013. From several high-profile announcements to acquisitions, some stories really caught us by surprise. Here is my take on some key announcements and my expectations for 2014.
1. Twitter went public
The “global town square”, Twitter has time and time again showcased the power of 140 characters to spread the word, shape public opinion, and literally change lives. The Obama presidential campaign, Arab Springs and the recent shaming of Justine Sacco are just a few examples.
Hashtags and twitter trending topics is how most of learn about whats happening around the globe. So it was not that surprising that Twitter is now a publicly traded company expected to return value to shareholders. In my opinion, Twitter IPO was handled much better than that of Facebook. Yet they have to make a number of improvements and enhance their advertising solutions before they start reaping the rewards.
2. Yahoo acquired Tumblr
To everyone’s surprise Yahoo acquired Tumblr in May for $1.1Bn. Thus far Mayer is yet to make any remarkable changes to the site, other than a few ads on the personal blogging site.
New York-based Tumblr, founded in 2007, had 175 employees, more than 108 million blogs and, according to comScore and nearly 117 million unique users world-wide in March. The acquisition provides Yahoo access to a social networking site, and access to a young hip audience that is deeply vested in the network. One thing is for sure, Yahoo could certainly use a shot of young blood, and Tumblr could help to do just that. Read More on Ad Age
3. SnapChat – The venus flytrap for teenagers
One of the worst kept secrets in Social Media is that teenagers are over Facebook. They have been for a while. With moms, dads and grandmothers rushing to set up their own accounts, it’s just not cool anymore.
In 2013, a new network courted teenagers and won them over. Snapchat, a messaging app, allows teenagers to send a message or snap a photo with a funny caption, and set a timer. When the time winds down, the message disappears. In fact Snapchat got so popular that they rejected a $3Bn buyout offer from Facebook.
The question is whether Snapchat will live to see its popularity grow. That might be a little doubtful. For one thing, this is a highly fickle audience whose preferences are hard to pin down and who flock to whats cool. Analysts have also identified several security flaws in the system, not to mention its every stalkers dream.
4. Instagram Integrates Advertising
Facebook acquired Instagram in April 2012. The $1Bn acquisition not only provided Facebook a superior product, but also a highly entrenched audience. We all screamed and shouted about our favorite app being taken over by the social giant, promised to leave, and then quietly pretended it never happened. Some reports say Facebook valued each Instagram user at $33. Was it worth it? Considering Instagram was earning exactly $0 at the time.
In October 2013, Instagram launched ads on the site. The site spent nine months laying out the ground work for advertising, starting with new service agreements. How the Terms of Service was quickly axed once Facebook and Instagram realized that users were not going to go along with it.
“We’ll focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community,” – Instagram Blog Post
A few advertisers have already started advertising on the site. An ad from fashion designer Michael Kors that instantly gained over 36,000 likes. Kors’ ad has started to appear in users’ timeline, despite their pre-fed settings, but users can choose whether or not to follow the particular brand.
This is a good move for FB and Instagram. According to market research firm eMarketer, advertisers will spend $9.52 billion on social network ads worldwide this year – about 8.1% of their overall digital ad budgets. These include revenues to Twitter, Facebook, LinkedIn and other social networks. Moreover, spending on mobile ads will increase 89 per cent globally this year to reach $8.8 billion, up from $4.02 billion last year. Advertising on Instagram should help Facebook increase its lead in the mobile display advertising category.
The Year Ahead
Its more apparent than ever that Social Media is an essential part our lives and it continues to expand its influence.
2014 will undoubtedly see more acquisitions and collaborations. There will be a strong focus on monetization and analytics next year. In order to justify the cost of maintaining and investing in social media, we need to showcase its value proposition. The question is what is value ? Is it a dollar amount, positive word of mouth, someone tuning into a show, buying an album, or creating user-generated content. Hopefully more organizations can decide what this means for them in 2014.
Happy New Year!!