Social Media's Impact on the Economy
Social media has reinvented how we as consumers take in information and respond to products. The average consumer spends up to nine hours a day online, and many companies have quickly realized that social media is the most effective way to reach their audiences on a global scale.
Among teens, 95% report that they use a smartphone or other electronic device to access the Internet each day. The top four social media sites used are Facebook, Instagram, Snapchat, and Youtube. The prevalence of teens on these sites have created a slew of jobs in the tech and entertainment industries that had not existed a decade ago, such as social media manager and online influencer. Not only that, advertisers have created new methods of reaching this large audience by implementing ads within social media sites.
Social media has created a way for brands to reach audiences across the world. Before the internet, companies could only sell to consumers through physical stores and locations, racking up costs of having to manage and maintain their stores. Now, companies no longer need flagship stores to bring in customers—they simply have to list their products online, and people all around the world can purchase them. Brands can also advertise their products directly to consumers through advertisements on sites like Facebook or Instagram, and they can maintain a following of loyal customers by running social media accounts.
Not only that, but social media makes such forms of advertising much cheaper than before. Television ads run upwards of $123,000 for a nationally broadcasted station and up to $4 million for a Super Bowl ad. Posting on Instagram is free, and only a few hundred to reach audiences of non-followers. It's also a better way to keep consumers up-to-date with the latest releases and sales as compared to the traditional television ad format.
The lesser cost of using social media to advertise and sell has allowed the growth of small businesses and the sales of niche products. The rise of "artisan" or "craft" products over the past few years can be attributed to their presence on social media sites, and the new sensation of going "viral" has boosted some small brands to multibillionaire status.
The transition from traditional advertisement strategies to today's use of social media has fueled the growth of companies like Facebook and Google, who now control almost 60% of the digital ad market. We can only wonder how the digital ad landscape will change in the future.
Sources: https://www.adweek.com/digital/the-digital-gold-rush-how-social-media-fuels-the-economy/
http://www.pewinternet.org/2018/05/31/teens-social-media-technology-2018/
https://www.forbes.com/sites/quora/2017/08/02/how-does-social-media-influence-the-economy/#dba14a644d00
https://www.visualcapitalist.com/dominance-google-and-facebook-one-chart/
Among teens, 95% report that they use a smartphone or other electronic device to access the Internet each day. The top four social media sites used are Facebook, Instagram, Snapchat, and Youtube. The prevalence of teens on these sites have created a slew of jobs in the tech and entertainment industries that had not existed a decade ago, such as social media manager and online influencer. Not only that, advertisers have created new methods of reaching this large audience by implementing ads within social media sites.
Social media has created a way for brands to reach audiences across the world. Before the internet, companies could only sell to consumers through physical stores and locations, racking up costs of having to manage and maintain their stores. Now, companies no longer need flagship stores to bring in customers—they simply have to list their products online, and people all around the world can purchase them. Brands can also advertise their products directly to consumers through advertisements on sites like Facebook or Instagram, and they can maintain a following of loyal customers by running social media accounts.
Not only that, but social media makes such forms of advertising much cheaper than before. Television ads run upwards of $123,000 for a nationally broadcasted station and up to $4 million for a Super Bowl ad. Posting on Instagram is free, and only a few hundred to reach audiences of non-followers. It's also a better way to keep consumers up-to-date with the latest releases and sales as compared to the traditional television ad format.
The lesser cost of using social media to advertise and sell has allowed the growth of small businesses and the sales of niche products. The rise of "artisan" or "craft" products over the past few years can be attributed to their presence on social media sites, and the new sensation of going "viral" has boosted some small brands to multibillionaire status.
The transition from traditional advertisement strategies to today's use of social media has fueled the growth of companies like Facebook and Google, who now control almost 60% of the digital ad market. We can only wonder how the digital ad landscape will change in the future.
Sources: https://www.adweek.com/digital/the-digital-gold-rush-how-social-media-fuels-the-economy/
http://www.pewinternet.org/2018/05/31/teens-social-media-technology-2018/
https://www.forbes.com/sites/quora/2017/08/02/how-does-social-media-influence-the-economy/#dba14a644d00
https://www.visualcapitalist.com/dominance-google-and-facebook-one-chart/
I liked this post as it is very relatable to us. I think the transition from physical stores to online shopping and social networking is very interesting, as there are new jobs created, as you said in the post, but also declining shopping malls. In the work place, technology is taking a huge role as the younger generation is searching for more ways to take advantage of social media. Employers who are not used to the prevalence of technology should find a way to connect themselves with new workers who may be more adept with the internet. This would result in better growth in the economy.
ReplyDeletehttps://www.information-age.com/social-networks-contribute-digital-economy-123468714/
This post really resonates with me. I found myself wasting a lot of time on social media, so from September to December I cut out social media to focus on college apps, and my productivity skyrocketed. When I got back on social media after college apps were over, I could see how much time I'm wasting really clearly. However, I am still on social media to this day because of the scheme that social media has laid out for us: FOMO, or fear of missing out. If you can monopolize how people communicate, then you can pretty much control people's time spent on their devices, which is quite scary. This is exactly what social media companies are doing and they're quite literally putting us in a vicious cycle.
ReplyDeleteThanks for the post! I agree with Jamsheed and Kevin -- this is an incredibly relatable post. I found it interesting how different countries are trying to combat more subvert advertising. There seems to be a greater call for clearer labels on celebrity endorsements and advertisers. For example, in the UK artists and bloggers like Zoella and Rita Ora were threatened with jail time unless they disclosed who was paying them for Instagram posts. I see many young fans in comment sections of celebrities that I follow who don't seem aware of what posts are (in my eyes) obviously sponsored. The impact celebrities have on social media is amazing, if not a little terrifying. As we've seen in the "Generation Like" documentary, online personalities/presence can bring in lots of money. Why do you think companies are investing more in advertising on social media? Is it just because it's cheaper, or is it because it has a larger, more personal reach?
ReplyDeleteWhile a pop culture source, this article raises several interesting points: https://www.thisisinsider.com/celebrities-disclose-sponsored-content-instagram-social-media2019-1
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ReplyDeleteI could not agree enough that social media did play a huge role in advertising, especially online advertising. For example, when I like a piece of clothing on Facebook, Facebook would automatically send the sponsored brand’s products into my feed which are similar to the product that I just loved, and further making me look into the brand's website. This shows that the effectiveness of online advertisement in our daily life. Besides, your post also reminds me of the strategies being implemented in online advertising. In these days, through using Big Data Analytics, one interesting aspect to point out is that its real-time and targeted benefit of collecting a massive amount of data of its users and analyzing their online behaviors. At the same time, it is also scary that these social media platforms, like Facebook and Instagram, came across the so-called privacy to make their money out of their users' online actions. (Source: https://www.qubole.com/blog/big-data-advertising-case-study/)
ReplyDeleteNice Julia!! I think that social media has had a huge influenced the new trends, and find it pretty scary but also amazing how social media has become a global advertising platform. I got curious about Instagram's revenue model and learned that they generate the majority of their revenue through sponsored post advertising. These sponsored posts also based on the user profile that Instagram has made of user us based on the things we like and follow.
ReplyDeletehttps://www.feedough.com/how-does-instagram-make-money-instagram-revenue-model/