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As social media platforms weigh up user experience vs. monetization, marketers struggle to keep up

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1 year ago

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Social media is becoming more bifurcated as an experience and marketers are left trying to read the tea leaves to determine which channels will suit their needs.

The split looks like this: there’s the user element of social media (as a way for people to connect and interact with each other) and there’s the media one (for advertisers and brands to target users). As new and emerging platforms enter the competitive field, the contrast of these use cases was clear during the recent earnings window. Platform execs appeared less interested in supporting user connections for the sake of them and more fixated on increasing users to bring in more money.

Meta CEO Mark Zuckerberg said that once execs have sorted user retention and experience on Threads, they’ll work on monetization. Snap’s CEO Evan Spiegel said that his platform’s top priorities are investing in products to sustain community growth and engagement, including measurable returns for advertisers and new revenue sources. And Pinterest’s CEO Bill Ready confidently noted that his team has become “laser focused” on its strategy with the aim of helping users go “from inspiration to action.”

A surge of new platforms, including successes like TikTok, Discord and Patreon, as well as those that have since sputtered for advertisers like Clubhouse, BeReal and arguably even Lemon8 have put more pressure on these platforms to tout whether they’re investing in their platforms for the user experience or for advertisers.

Complicating matters even more are the identity crises experienced by larger, established social networks, spanning from X (formerly Twitter) to TikTok.

It’s left marketers in a bit of a tizzy as they find themselves entangled in a whirlwind of uncertainty, further complicated by the rapid pace of change catalyzed by the pandemic.

Identity changes according to platform

The more marketers try and embrace these changes, the more disorientated they get. They can’t rely on conventional best practices to orientate their efforts. Just look at the speed in which short-form video on TikTok took the social landscape by storm and became the defacto marketing format for most. The platform’s requirement for “authentic” and “native” content has thrown every marketing rulebook out the window.

Nor is it as easy for marketers to initiate conversations around their brands as it once was. They can no longer be seen as brands and just spout out corporate speak. Nowadays, many have adopted a more human approach, dubbed the unhinged social media manager. In fact, it might be more effective for marketers to step aside in these instances, as demonstrated by Bose’s revised approach.

Alongside humanizing the brand, (its previous focus on product and engineering had alienated its audience), Bose teamed up with NME earlier this year to host a music festival at SXSW. The social videos created off the back of the event showed the brand’s move to create content around the brand, rather that simply make its products the sole focus.

“All these changes are crystallizing this idea that who we are depends on where we are on social. And by that I mean people have multiple versions of themselves that they use depending on the platform they’re on,” said Tom Sweeney, head of creative strategy at FanBytes by Brainlabs. “This isn’t about platform preference, though. It’s more about their identities.”

So marketers are left having to find their audiences as those audiences themselves examine who they want to be on each platform.

Marketers are seeking external help

Marketers still want what they’ve always wanted — tangible results. But the talent (whether in house or external) they employ to get them those results is evolving.

“They are mostly looking for services that specialize in managing campaigns, creating content specifically catered towards these platforms, as well as help increase engagement metrics such as views and likes,” said Anna Koval, marketing officer and co-founder of Tarotoo. She has seen a recent uptick in queries from brands asking for help with transitioning away from text-based social media. “They also seek advice on how best to reach their target audiences through these new mediums.”

In some cases this desperation has made those marketers rethink their hiring strategies, gravitating toward recruiting content creators immersed in evolving trends. The trend has gained momentum, leading agencies like The Social Standard to launch programs like “Creator Recruiter” to meet the demand. The program enables the agency to place full-time hires in brands, or freelancers to become the face(s) of the brand. As its CEO Jess Phillips explained: “We’ve placed creators at brands like Adobe, ZenDesk & LossProof and more.”

Another example is luxury retail brand The Ridge Wallet, whose CEO Sean Frank recently posted on X that he was offering a $1 million contract to a content creator to work as the company’s in-house creative director. Why? To “elevate and humanize our story.”

Their determined search for help underscores just how colossal the challenge is for marketers.

And it’s not exactly difficult to understand why.

Social priorities have changed

An array of perspectives on what platforms are for users — and what those platforms are thereby investing in — can leave even the most astute marketers puzzled. Some predict the decline of text-based social media, while others vehemently advocate for its enduring significance. Then there’s the camp that asserts today’s social media is more about creating fandoms than fostering interpersonal relationships. And let’s not overlook the observers who foresee a permanent revolution in social media through subscriptions.

Ultimately, they all converge on a central idea: there’s potential for profit in both the community and entertainment realms of social media, but charting the way forward will be intricate. The emergence of Threads, an X competitor, bolsters this idea. Examining its bumpy trajectory alongside X’s tumultuous ownership under Elon Musk leads to the conclusion that platforms, captivated by social entertainment, grapple with reconciling it with their community-oriented elements.

“I don’t think it’s true that there isn’t money in connecting people to each other, it’s just that we have to relearn the way to connect,” said Alexis DeBrunner, associate strategy director at R/GA. “We can’t just shout products and messages into the social echo chamber anymore and hope the algorithm or paid targets do their job. We have to rewrite the playbook on how to empathize, connect and offer true value to the consumers and communities we want to engage.”

When social interactions are done well

When marketers get this right, though, it works wonders. And that’s precisely why McDonald’s campaign involving the brand’s mascot Grimace, which saw the launch of a limited edition milkshake to celebrate the character’s 52rd birthday, received such widespread acclaim over the summer.

Responding to the campaign, TikTok users created their own playful video reviews of the shake to post on the app — some with exaggerated reactions — which became its own viral trend. The most remarkable aspect? McDonald’s had no hand in orchestrating it. The entire trend was the brainchild of the drink’s passionate Gen Z TikTok audience. Moreover, the brand’s only involvement was a low-key post on X acknowledging the trend.

According to McDonald’s president and CEO Chris Kempczinski on the company’s Q2 2023 earnings call, Grimace had been “everywhere the past few months, all over the news and more than three billion views on TikTok.” Though despite the entire trend having been nothing but user generated content, meaning that McDonald’s let its fans do the work, rather than dictate its terms to them, the trend helped to boost sales by 11.7%. As Kempczinski noted that this was “yet another proof point of the power of marketing at McDonald’s.”

The success hinged on a potent mix of unforeseen events and a touch of insider expertise.

“They [McDonald’s] shifted from dictating product conversations in a traditional advertising manner to letting today’s culture and people naturally engage with their product,” said Shray Joshi, founder and CEO of Good Peeps.

Giving up control

Numerous agencies are guiding brands toward this approach, urging them to relinquish control. The need for speed is becoming paramount, prompting advertisers to reassess not only their social team’s workflow but also their level of access to higher management.

Once again, the recent launch of Threads is instructive here. Within a matter of days, social teams had to determine a strategy for the launch. Some brands gave power to their social teams to go for it while others were more tentative. American Eagle & Netflix are great examples of the former.

“We’re creating thousands of pieces of content a month across platforms like Instagram and TikTok,” said Bose’s CMO Jim Mollica. “It’s a publishing model that’s focused on making sure that what we put out on these channels feels less like a commercial and more about content around the brand.”

All this discourse on “community,” reach,” and “relevance” shouldn’t catch many marketers off guard. They’ve been fervently pursuing these aspirations since the inception of social media a decade ago. However, the predicament lies in the ever-shifting landscape of social media, which turns these aspirations into moving targets. Unfortunately, many brands still need to allocate adequate resources and attention to hit those moving targets.

Budgets move according to priorities

Estée Lauder made this very point to Digiday earlier this year. As did gifting company Edible’s chief marketing officer Kevin Keith, who said the brand commits to strategic partnerships with production companies that can complement the work they do in house because they “can’t do everything.”

The pattern repeats itself across the board. But there are early signs of change on the horizon. Notably, social ad spend is on the rise, despite the pressure most marketers are under to cut costs. Most (53%) marketers plan to increase their spend year-on-year in social advertising in 2023, per a Gartner study of more than 400 respondents.

It’s probably no coincidence that this increase in spending comes at a time when short-form video has become ubiquitous across the most prominent social networks, reminiscent of the Stories format that came before it.

“Short-form has become way more than just how I as a brand entertain [people] these days; it’s also about how I educate and how do I engage [them] in the most authentic, unassuming way possible,” said Joshi.

Marketers are continually thinking longer and harder about the content they create and where they place it. Why? Because the platform landscape is changing and evolving quicker than ever. And being able to adapt is the only way to stay afloat.

“Brands can’t keep up with trends & changes,” Philips pointed out, adding that that’s why it’s been so important for brands to hire creators who have emerged in these spaces and are adept at creating lots of content in efficient ways. “[It’s about] setting up the right framework for your social media team’s success. Think of social media as the front door to your business. That’s what it is.”

— Kimeko McCoy contributed to this article.

 

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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3 weeks ago

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August 23, 2024

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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3 weeks ago

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August 23, 2024

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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3 weeks ago

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August 20, 2024

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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