Major Keys: Social Media’s Impact on Marketing and the News

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By Steven Feng

Whether you are riding with DJ Khaled through the journey of more success on Snapchat or reading the latest Humans Of New York post, there is no question that social media has become deeply embedded into our daily lives. Companies like Facebook, Twitter, Instagram, and Snapchat, which were all founded between 2004 and 2011, have experienced astonishing rates of growth. These tech startups have mushroomed into multibillion dollar corporations virtually overnight, with Facebook leading the pack, boasting a market cap of $318.27 billion as of March 21, and Snapchat bringing up the rear, with a Fidelity market valuation of $12 billion.

The driving force behind these impressive figures is this: social media, which started as a forum for individuals to share their lives with friends and family has evolved into a powerful and lucrative platform that has had a far-reaching and significant impact on various sectors of the economy. In this article, we’ll focus specifically on two sectors, advertising and news media.

Let’s first examine the impact on advertising. The rise of social media has revolutionized the way companies market their products to consumers. Although television ad sales still account for 38.4 percent of the $503 billion global ad market, the New York Times reports that digital ad spending may soon overtake it. In 2015 alone, social network ad spending hit $23.68 billion, with Snapchat charging companies a staggering $750,000 per day for sponsorships, which ranged from ads that play during live stories (location specific Snapchat stories) to filters that promote a company product. The photo sharing start-up is able to demand such high prices because of its large user base. On average, Snapchat has nearly 100 million daily active users, and the company is even rivaling Facebook on daily video viewership. The effect of this user base can be seen clearly in ad viewership statistics. Fashion magazine Cosmopolitan averages 3 million Snapchat views daily, and music mogul DJ Khaled posts Snapchat stories that each earn well over 2 million views. With such high visibility, social media like Snapchat have been able to claim more of the market share by offering prime advertising real estate to companies at a lofty price.

Another reason companies are so eager to promote their product on social media is because they are revolutionizing how advertisements reach the consumer by more effectively pinpointing and reaching target audiences. Despite the recent entry of targeted TV ads that take a more granular approach in determining viewership demographics than before, these ads still cannot compare to the specificity of ads that appear on social networks because social media employ large amounts of user information in order to fine-tune an advertisement’s audience. In particular, Facebook has access to a log of websites you’ve visited in the past 90 days as long as those websites have a Facebook plug-in, such as a “Like” or “Share” button. More specifically, when you visit a website with one of these social plug-ins your browser automatically sends a cookie, which contains your user ID as well as the website URL, date, and time back to Facebook. The company claims that they record this information in order “to help show you a personalized experience on that site and to improve our [Facebook’s] products.” In this way, web data in conjunction with self-reported interests and activities allows Facebook as well as other social media platforms to distribute personalized ads to target audiences.

Now examining the impact on news media, one can see that social media’s vast user base has not only had a significant impact on the propagation and public perception of news but has also changed the way journalists interact with the public. A 2015 study conducted by the Pew Research Center found that 63 percent of Twitter and Facebook users consumed news on these social media platforms. The proportion of users who use these social networks as news sources has increased substantially from 2013, when only 52 percent Twitter users and 47 percent of Facebook users got their news from these respective outlets.

The study also found that there were differences between the types of media consumed on each site. In particular, Twitter users were twice as likely to report that they used the site for breaking news than their Facebook counterparts. This most likely arises from Twitter’s design, which promotes the use of short and concise messages. Following the trend of providing concise media coverage, Facebook debuted its “Trending” sidebar in mid-2015, which allows users to more easily find popular articles on politics, science and technology, sports, or entertainment. As a result, Facebook and Twitter now play a major role in deciding which topics are presented to the public, which ultimately has an effect on what issues are being discussed in Washington.

The increase in users obtaining their news from social media platforms has prompted journalists to be more active on these social networks. However, this has some unforeseen consequences. A 2014 ING survey reports that the majority of journalists believe that social media is not only necessary to the performance of their daily activities, but that social media also provides better quality reach than traditional media. However, 60 percent of journalists report that they are “less bound by journalistic rules” on social media than in traditional media. Journalists’ tendency to do less fact checking on social networks, compounded with the fact that the nature of social platforms rewards those who are able to post their article first, has created a “publish first, correct if necessary” culture in the media.

Social networking has also produced a setting in which journalists can easily interact with their audience through methods like conducting straw polls or posing questions that shed light on public opinions. As a result, half of the reporters in the ING study use social platforms as their main source of information, and 50 percent of journalists believe that consumer opinion is more reliable than statements issued by organizations. This in turn raises concerns about the reliability of news pieces that are based on consumer opinions because 32 percent of journalists regard posts on social media as unreliable, and authors do not always check whether the opinions used in their articles are based on facts.

There’s no question that applications like Facebook, Twitter, and Snapchat have had a significant impact on how we live our daily lives. On the surface, social networking has transformed the way we communicate, interact, and share information with one another. However, it’s also worthwhile to dig a little deeper and examine some of social media’s less well known impacts. By doing so, we can reveal both beneficial and detrimental changes in different economic sectors like marketing and news media and ultimately gain a better understanding of how social media is shaping our world.

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