Now that Big Social is Mainstream, What's Next?

WHAT WE LEARNED FROM THE BIG SOCIAL EARNINGS

Last week all of the biggest platforms reported their earnings, which always cuts through the spin to reveal what’s actually going on under the hood. This time they all told roughly the same story: Growth is good, and so are earnings.

In Meta’s case, the big headline was that they have crossed 3 Billion users – just another sign of their dominance as the world’s largest social network, by a lot.

But the real story is in the details. Specifically, where growth and earnings have come from – and for Facebook, Instagram, Snap, and Pinterest, the trends have been almost identical, just at different scales:

• North American growth is nearly non-existent — they have already squeezed just about every drop of our available screen time
• The rest of the world is catching up, which means that Asian markets are accelerating user growth
• Despite global growth, nearly all of the revenue still comes from within North America
• North American Average Revenue Per User ranges from roughly $5 - $9, while “Global” (non-North American users) comes in under $1 per user

HAS BIG SOCIAL PEAKED IN NORTH AMERICA?

The North American market is clearly at the top of the adoption curve, or maybe even into the back half.

What’s an adoption curve, you ask? It’s the bell curve that every company and new technology goes through, beginning with a few early “innovators,” a larger number of early adopters, then it peaks when we get through the early majority, and levels off through the late majority, and settles back down into the laggards.

Hallmarks of the back half of the adoption curve include a reduction in spend on R&D (fewer new products), cutting SG&A costs (layoffs) and throwing off cash to investors (dividends, share buybacks).

At the same time, there is a raging battle for emerging markets, but the math for those doesn’t quite add up. If a new user is only worth 10% of an existing one, then does it makes sense to invest the same way to acquire them?

SO WHAT?

One thing is clear: The era of rapid expansion and iteration within the social platforms is over. Major disruptions (ie. algorithm changes, content formats) are much less likely to come from the incumbents; instead, any big shakeups will come from the upstart challengers.

In the early days of all of this tech innovation, Steve Jobs was famously quoted as saying “It's more fun to be a pirate than to join the navy.” The big tech companies, it seems, have become the navy. So the big question is: Who will be the next wave of pirates?

A few to keep your eye on:

• Lemon8 — owned by TikTok’s parent company, ByteDance, launched in the US in March, and already the #9 most-downloaded app on the US app store.
• Gas — the “see who likes you” app that all of the high schoolers are obsessed with right now. Users post polls about their friends, people earn coins for answering, then spend those coins to find out what people are saying about them. The hook: It’s all about gassing people up (giving them compliments).
• ActivityPub — this one is less of an app and more of a fundamental shift in how we think about social platforms. It’s an open protocol that social channels can be built upon, allowing people to move between different providers without losing their data and connections. The most famous ActivityPub network so far is Mastodon, and it has partnerships with WordPress and Medium, plus plans to integrate with Threads.

TIKTOK ADDS TEXT-BASED POSTS

COULD THIS BE THE FINAL STRAW FOR X/TWITTER?

This may be one of the simplest and most impactful updates to come to your social feeds in a while: TikTok has just added the ability to share text-only posts.

One of the only hurdles that’s held TikTok back from even more explosive growth has been the challenge that comes with a new content format. New users on TikTok are less likely than they may be on other channels to create an original post, but with text posts, that hurdle is now much lower.

If the future seemed rocky for X/Twitter before, now it’s hard to imagine anything turning it around for the better.

Read more about text-only posts here

HOW ARE BRANDS USING THREADS?

SPARKTORO ASKED 315 MARKETERS

After the most successful launch of all time, Meta’s Threads app usage fell off of a cliff, which is to be expected. There’s just no way to maintain that level of energy and, as we’ve previously written about, Threads hasn’t really established its core use-case yet.

So, the big question is: What’s next for the 100 million+ user social app?

The people at SparkToro polled their community of marketers to get their vibe and here’s a few of the most interesting results:

• 78% have claimed their personal Threads account
• 33% have claimed their business’ Threads account
• 23% said that they’ll be advertising on Threads when it is available
• 44% said that they think Threads will be a top 5 social network in 3 years

Read the full results here

NO NEWS IS BAD NEWS

META IS STARTING TO BLOCK NEWS CONTENT IN CANADA

After months of threats, Meta has started to shut off news content for Canadian users. The action comes as a retaliation to a recent bill called the Online News Act that requires the biggest online platforms to negotiate in good faith with publishers whose content they share.

The action is not unprecedented: Meta and Google took similar measures in Australia back in 2021, and then caved after just a few weeks, agreeing to compensate news organizations. The result has been over $150 million in payments flowing to Australian publishers.

Will the same thing happen here? It’s impossible to say at this point, but Canada is not the only jurisdiction that’s taking a stand. California, Europe, and others are gearing up for similar fights in the near future.

If you start to see some gaps appearing in your newsfeed this week, don’t panic. Instead, perhaps consider supporting Canadian journalism by downloading their apps, or signing up for a subscription.

A FEW MORE STORIES WORTH A CLICK

STUFF THAT WILL MAKE YOU JUST A BIT SMARTER THIS WEEK

• Canadian event management software company EventMobi has acquired online event company Run The World, promising to bring greater integration between online and offline events
• Google makes improvements to PerformanceMax that make powerful AI tools accessible to more advertisers
• Google is categorizing online reviews to give more context about whose advice you’re taking, and which experiences may be most relevant to your own
• A simple infographic on local search that makes it easy to identify where your brand could use a bit of a boost

Written by Conner Galway, Junction Consulting