SMM Platforms Loss Of Value

Many people saw it coming with the massive changes in social media over the years. 2023 is the year that major social media platforms are starting to lose value. So, how exactly did we come to this point? In this article, we will go over the SMM Platforms Loss of value and decline and we will take a look at what this means for the future of the digital marketing landscape.

SMM Platforms Loss Of Value

If we were to backtrack to last year, there was a lot of chaos and upheaval happening at platforms like Facebook and Twitter.  Meta (formerly known as Facebook) lost billions of dollars in value and they laid off thousands of their staff. Elon Musk’s takover of Twitter caused advertisers to pull out.

In 2022, Meta lost about two-thirds of its value since peaking in September 2021. The stock is trading at its lowest since January 2019 and is about to close out its third straight quarter of double-digit percentage losses. Since last year, users have started to jump ship and the advertisers followed behind them. The amount of daily active users in the US and Canada has fallen in the past two years – from 198 million in 2020 to 197 million.

In 2022, shares of social media companies fell 26.4%. This is around the time that Facebook’s daily active users had dropped for the first time in 18 years.

No Longer “Free” – Platform Subscription Plans

Social media was never “free” in the fullest sense (we “paid” by viewing ads and forking over the consent of sharing our data). However, for the longest time, users were not pushed to pay for social media platform services. The era of free and easy social media access is coming to an end, and in its place is a subscription-based model.

Many social media platforms have adopted this model:

• Twitter’s $7.99 a/month subscription that included the coveted “Blue Checkmark”
• Snapchat’s $3.99 a/month subscription that includes extra perks.
• Reddit’s $5.99 a/month subscription where users can enjoy ad-free browsing, custom avatars, and “Reddit Gold”.

Twitter’s subscription model in particular sparked outrage and it left users scratching their heads. Many users do not feel inclined to pay for a service that has always been free for them. These platforms’ attempts to “nickel and dime” users have turned them off from being on the platform.

The Decline in Advertisers

One of the biggest signs of the downfall of platforms like Facebook and Twitter has been the loss of advertisers.

Since Elon Musk has taken over Twitter, the platform has lost 50 of its top 100 advertisers. Several of these advertisers have slowed their advertising down to almost nothing. Twitter’s advertisers that have pulled out have included Chevrolet, Chipotle, Ford, Jeep, and Novartis AG. Elon Musk has been one of the driving factors to why advertisers have started pulling out of Twitter. He has made many rash decisions including spreading conspiracy theories, and reinstating banned accounts (including that of former President Donald Trump).

Facebook has also been losing revenue from advertisers.  Nine companies formally announced a pullback in paid advertising, cutting their spending to $507,500 from $26.2 million. According to Pew Research, Facebook and other major social media platforms’ growth stalled over the past five years. Facebook’s brand reputation suffered last year after advertisers boycotted the platform with the “Stop Hate for Profit” campaign.

TikTok Ban In the US

The biggest social media controversy to happen this week is TikTok facing a potential ban in the United States. Just today, TikTok CEO Shou Zi Chew testified before a committee of House lawmakers. The China-based app boasts more than 150 million US users each month.

The platform has been under scrutiny from lawmakers over growing fears that user data could fall into the possession of the Chinese government. There is also concern that the app could be weaponized by China to spread information. Presently, there is no evidence that TikTok has shared U.S. users’ data with the Chinese government.

Tiktok’s popularity has complicated any talks of a ban in the US. Here are just a few statistics:

• TikTok app has been downloaded more times in the U.S. than any other social app since it merged with U.S. lip-syncing app Musical.ly in August 2018
• The app is projected to generate more than $11 billion in U.S. ad revenue by 2024 – which will outpace Snapchat, Twitter and Pinterest
• TikTok has also captured far more revenue than its competitors from in-app purchases

Why Businesses Should NOT Depend On Social Media For Marketing

We’ve seen this happen with many of our current and past clients at Faceless Marketing. So many small businesses put social media platforms on a pedestal. Often, they see social media marketing as the “end all, be all” to their business. While social media has proved to be a necessity for small businesses and a powerful marketing tool, we’ve staunchly advised our clients to not depend on social media for marketing for the success of their business. There are more than a few reasons for this:

• Does Not Guarantee Huge Visibility – The Shelf Life of a Social Media Post is Short Lived!
• It’s Essential a “Rented Space”
• You Are Subject To The Platforms Changes, Technical Difficulties, and Outages
• Platforms Reserve The Right To Ban, Restrict, and Penalize Your Content
• Your Customer Is The Platform’s Customer Too
• Platforms Can Disappear Overnight

The Bottom Line

At the end of the day, all these concerns stem from the fact that your business is at the mercy of these platforms. If these platforms go down, so will your business’s online presence. When used correctly, social media can help any business succeed. The key is to NOT lean into social media platforms on their own. There is a huge lack of control over your business when it relies solely on social media.

About Faceless Marketing Firm

At Faceless Marketing, we have helped countless businesses grow their brands – from planning to execution and optimization. As a marketing agency, we provide a full range of creative services, content creation, and data analytics.

As a top digital marketing firm, we stand by this mission. Reach out to Faceless Marketing for a quote or FREE consultation. Call 1-800-357-1299 or email info@faceless.marketing and check out our YouTube channel for more content.