4 min read

Social Media and Monetization

Social Media and Monetization

Here's the deal: social media platforms, especially the big dogs like Twitter and Meta, are feeling the heat to bring in the dough. The ad market is slowing down, and competition is fierce, so they can't rely on the same old tricks anymore.

Even newer platforms like Threads, which had a big launch and tons of initial hype, struggle to keep users engaged for the long haul. Why? 

Because they haven't figured out how to create a unique culture or vibe that makes people want to stick around. The novelty wears off quickly if there's no substance behind it.

So, what's a social media giant to do? They have to get creative and find new ways to make bank, or they’ll be left in the dust.

Twitter (aka X) Is Making Money Moves

Take Twitter (or should I say, "X"), for example. They know they need to keep their most influential users happy to stay relevant, so they're throwing them a bone by sharing some of that sweet, sweet ad revenue.

Here's how it works: when someone replies to a creator's tweet, and that reply gets served up with an ad, the creator gets a cut of the profits. It's like a little "thank you" for keeping the conversation going and driving engagement.

Sure, this revenue-sharing model isn't groundbreaking—other platforms have been doing it for a minute. But it's still a clever play to strengthen the bond between X and its top talent. It also encourages more people to create high-quality content in hopes of cashing in on those ad dollars.

Threads Missed The Mark On Culture

Conversely, Threads has dropped the ball on building a distinct platform culture. They brought nothing new or exciting for users to latch onto and make their own.

But let's be real - just because Threads fumbled doesn't mean X or any other platform can rest on its laurels. The competition for ad dollars is only getting more cutthroat by the day.

Elon's Big "Super App" Dreams

Then there's Elon Musk and his grand vision for turning X into a "super app." And no, he's not talking about giving it a cape and some spandex (although that would be hilarious).

A super app is basically a one-stop shop that combines a bunch of different services into a single platform. Think of it like a digital Swiss Army knife. This model has been crushing it in Asia with apps like WeChat, which has over a billion monthly active users.

The beauty of a super app is that it keeps people engaged for longer and creates more opportunities for advertising and monetization. Mini-games, social features, payment integration - it's all fair game. And with Musk's experience building PayPal, he might just have a leg up on the competition when it comes to nailing the payment piece of the puzzle.

WeChat's Dominance In The Super App Scene

WeChat is a behemoth in China. It completely revolutionized the mobile and social landscape there.

Get this: 88% of Chinese users are on WeChat EVERY. SINGLE. DAY. They use it for everything from messaging, shopping, and booking doctor's appointments. 

The mini-programs within WeChat are like apps within the app, so you rarely have to leave the platform to get stuff done. And with WeChat Pay built right in, they've got a stranglehold on the entire user journey from start to finish.

In 2021 alone, WeChat's mini-programs generated over $400 billion in transactions. That's BILLION with a B, folks. And their in-app purchases raked in a cool $56 million on top of that. 

The Regulation Hurdles Ahead

But before you think super apps are the ultimate cheat code, let me give you a reality check. These things come with a whole mess of regulatory baggage.

As super apps get bigger and more powerful, governments around the world are starting to side-eye them HARD. They're worried about these platforms having too much control and edging into monopoly territory.

Just look at the heat Facebook and Google have been catching in Europe and the US. Antitrust lawsuits, privacy scandals, congressional hearings—it's a minefield for tech giants.

So, if you're trying to build the next big super app, you better have a good legal team and a high tolerance for bureaucracy. 

Social Media's Sink-Or-Swim Moment

Social media platforms are facing a do-or-die moment. They can't just kick back and count their ad revenue anymore. They have to evolve and take risks, or they will go extinct like the dinosaurs.

eCommerce and livestream shopping are blowing up and creating new ways for brands to connect with consumers directly through social media. Influencer marketing is all the rage because it feels more authentic and trusted than traditional ads.

And don't even get me started on the untapped potential of mobile gaming to boost engagement and ad effectiveness. In-app games create stickiness and a sense of community that can do wonders for keeping users glued to the platform.

TikTok is already ahead of the curve on many of these trends. Its algorithm is scary good at surfacing content, it has an in-app shopping feature, and it's THE place to be for influencers and brands trying to ride the latest viral wave.

No wonder Gen Z is flocking there to spend their hard-earned cash. According to a recent survey, TikTok is neck-and-neck with YouTube and Instagram when it comes to young adults' purchase intent. And with the average user spending almost an hour a day on the app, the engagement is off the charts.

So Where Do We Go From Here?

All of this adds up to a complex landscape that's changing by the minute. If you're an advertiser trying to figure out where to spend your budget and how to reach the right audience, good luck.

If you're a social media platform trying to stay afloat, you've got your work cut out for you. Adapting to this new reality isn't optional—it's a matter of survival.

But here's the thing: the platforms that will come out on top are the ones who can strike the right balance. They need to be agile, experimental, strategic, and mindful of potential pitfalls.

They need to find ways to integrate new features and revenue streams while pleasing users or regulators. They need to foster a genuine sense of community and culture, not just chase the latest gimmick.

It's a tall order, but it's the only way forward. The social media game has changed, and the players who refuse to change with it will be left behind.

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