An exploration into how monetization is shaping the social media landscape
It’s no secret that money makes the world go round. So, it shouldn’t come as a surprise that our favorite social media channels are making a subtle shift towards a monetization-heavy, and consumerism-friendly atmosphere. In fact, you’ve probably noticed yourself.
In a trend that has been building since way back in 2005 with the very social media advert (on Facebook, no less) the ability to monetize your social media presence has grown exponentially in recent years allowing for in-app shopping, sponsored content, gated content, and even subscription-based social media memberships. In fact, 30% of shoppers now begin their shopping research and purchase journey on Instagram, while 18% start on Facebook and 7% begin on Snapchat according to research.
Is monetization taking over social media? Have social media platforms lost sight of their original purpose? Join us as we explore.
Popular ways to earn money through social media include sponsored content, using social media to promote products to earn money via affiliate schemes, gated content (such as paid entry or subscription to a Facebook Group), or listing products for in-app shopping. When it comes to platforms such as YouTube, you can also earn money through the ads that are tacked onto your long-form video content. Even social media platforms are looking to get involved and make money from users with the introduction of paid subscription options such as X Premium or Meta Verified.
Let’s start by clarifying that monetization on social media isn’t necessarily a bad thing. Social media can be amazing for businesses looking to sell products (especially small businesses) as well as influencers looking to make a living, and content creators who want to earn from their craft. Social media in today's world is a kingpin in any business’ marketing strategy, particularly when it comes to platforms such as TikTok and Instagram, and Pinterest too, depending on the industry.
Since social platforms such as TikTok and Facebook have introduced features for in-app shopping, it’s been a gamechanger for businesses who are able to increase their sales by minimizing the number of steps required to make a purchase — after all, customers don’t even have to leave the app. According to research, one million Facebook users buy from Shops monthly.
Of course, it’s also in the best interest of social media platforms to develop features to support monetization that will bring more users and businesses to their apps. Social media offers a real opportunity to make some extra cash, which is naturally appealing to many people. With features such as subscriber groups on Facebook, partnership message folders on Instagram, and in-app shopping, social media platforms are doing their part to support influencers, brands, and businesses.
The average person spends two hours and 24 minutes on social media per day, so it’s only natural that businesses and brands will begin to target people where they are spending their time. As the influencer economy has grown, it has also become important for influencers to have multiple revenue streams that enable them to generate enough income to be full-time creators. Developing features to support such endeavors is mutually beneficial for the influencer as well as the social media platforms on which they live. Businesses have since caught on to the benefits of using influencers as a part of their marketing strategy to promote their products and services. Then, like the final piece in a puzzle slotting into place, the development of in-app shopping allows those who have been influenced to make an instant purchase without leaving the app. Over 45% of TikTok user purchases are driven by influencer collaborations and content, with 37% of users immediately purchasing an item after discovering it on TikTok.
No doubt about it, monetization on social media will not be slowing down any time soon. That being said, there’s a possibility that social media platforms may begin to put additional focus into other features in order to prevent their platforms from becoming too dominated by the shopping culture. Maybe social media platforms will even take further steps to bring a more social aspect into their existing shopping experiences, with features to support connections between customers and allow for discussion around purchases. While B2C companies are typically benefiting the most from social media consumerism, it is possible that platforms like LinkedIn may dabble in the future to fill in the gap for more B2B purchases.