Social media usage is on the rise. Here’s what investors need to know.
In the last decade, social media has entirely transformed the way we communicate. And this year, the industry’s impact is set to expand even further as the number of people using social media hits record highs.
With that in mind, savvy individuals would do well to invest wisely in this ever-expanding market. Here, the Investing News Network identifies some of the social media future trends that investors should look out for.
1. Growing user base for social media
If you think that social media has finally reached its peak, you’re wrong. There is a steady upward trend in the number of individuals contributing to social networks each day, and according to Statistica, there were 1.96 billion social media users in 2015.
This year, it is expected that 2.13 billion people will be using social media, up a huge amount from the 970 million users seen in 2010. What’s more, projections indicate that the number of social media users will exceed 2.4 billion in 2018. Those statistics show that one of biggest social media trends of 2016 is an increasing pool of active users.
2. Increased emphasis on social media marketing
Another of the social media future trends that we will see is an increased commitment to social media marketing. According to Hootsuite CEO Ryan Holmes, spending on social media advertising increased by 33.5 percent to reach $24 billion in 2015. In 2016, this number will increase even more. Indeed, projections estimate that by 2017, social media ads could account for 16 percent of all digital ad spending. Much of this transition towards social media advertising is driven by the ease and efficiency with which companies can spread their message through social networking platforms.
In May of last year, Statista undertook a survey to understand where marketers were intending to expand their impact. Twitter (NYSE:TWTR), YouTube (NASDAQ:GOOGL), LinkedIn (NYSE:LNKD) and Facebook (NASDAQ:FB) topped the list, with more than half of survey respondents reporting a desire to increase usage on these platforms in the near future. Interestingly, Twitter’s video platform Vine and the video messaging platform Snapchat were among the lowest cited for future marketing usage — indeed, 71 percent of survey respondents said that they had no plans to utilize Vine, and a whopping 82 percent planned to ignore Snapchat. While marketers are choosing to ignore these social video sharing platforms, consumers are becoming more and more enthusiastic. In November, Snapchat began reaching 6 billion daily video views, up from 2 billion just six months before.
Although smartphone and internet users are attracted to the idea of quick, ephemeral communication, it seems as though marketers prefer to stick to the more traditional platforms for social media interactions. People seeking to invest in social media might thus be wise to invest through social media marketing, as this is evidently a growing subsector of the market.
3. User-generated content platforms remain most popular
The breadth of social networking sites available can make it difficult for investors to suss out which platforms are truly the most popular. However, according to Statista, Facebook remains by far the most popular social media platform, with 72 percent of social media users using it.
After Facebook, the percentage of social media users using a specific platform drops dramatically. However, Pinterest, Instagram, LinkedIn and Twitter all pull in a respectable portion of users, with each of these platforms reaching around a quarter of all social media users. What unites these social networks is an emphasis on user-driven content. Indeed, this appears to be another important trend for 2016. Consumers appear most engaged with platforms where content is driven by users themselves. That might be something to keep in mind for investors deciding which social media platform to invest in this coming year.
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This is a republish of an article originally published on December 9, 2015.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.