Nothing is actually free

When we post a picture, upload a story on a blog, or tweet about the latest news on Elon Musk, we contribute to the social media business. And, regardless of how we do it, it doesn’t cost us anything, or at least that’s how we perceive it. But, in reality, there are several ways social media platforms can generate profit through these actions, and advertisement is one of the most prevalent. From services to products, almost anything can be a subject of advertising. Furthermore, recent events, such as the “Twitter’s breakup,” have highlighted the relevance of advertisements for social media revenue.

As these platforms have grown in reach in the media environment, so has the sophistication of promotions. Brands can measure the performance of each individual ad in real time, providing significant advantages for analysis and further improvement. In addition, technology allows ads to be customizable. And as users, this is not strange. We have experienced this phenomenon while scrolling through Instagram or Twitter, where ads have popped up with content that perfectly matches what we want or think.

In contrast, traditional media outlets are at a clear disadvantage. While some have adapted to online formats, such as newspapers, there is still a large gap between the advertisements in old and new media channels. Initially, ads in both traditional and newer networks shared more similarities. They appeared on a small portion of the media under a label that stated “promotion” or “sponsored” and provided limited interactions between brands and users. Despite the initial resemblance, the differences grew bigger as social media evolved. For example, data analysis relatively more limited for physical newspapers, TV channels, or radio programs. It is not that the data is insufficient; however, it is easier to change a campaign on Instagram than it is for a printed ad in a magazine.

The diversification of online marketing strategies has followed the evolution of social media. Different promotion types include paid ads, influencer marketing, and user-generated content. Paid ads are traditional ads discussed above, and can be paid by click-thru or by display; influencer marketing involves online celebrities that endorse products, and user-generated content refers to a company that pays a customer to share their experience about their services or products. Indeed, these strategies work wonders for brands, but what do users think about them?

Ads have saturated feeds, so users don’t seem very fond of them. However, at least for now, there is no chance that the situation will change. Parallel to this growth, distrust also plays a big part in the social media environment. A recent Integral Ad Science survey found that more than 75% of ad experts reported as their top concern for social media advertising the declining user’s trust. Surprisingly, despite being aware of this effect, the study concluded that there was no intention of reducing advertising. In fact, despite the real possibility of facing transparency issues, marketers don’t seem to cease promotions. Forecasts indicate that in 2023 the advertisement flow on these platforms will increase.

Given the insights presented in the survey, it is safe to say that so many ads might threaten brands’ performances due to the growing skepticism of promotions and, thus, social media platforms. But is there too much dependability on this revenue stream? Or are brands becoming more hooked on the perks that social media provide for them? Flexibility, great reach for any type of users, and measure of effectiveness are among the most appreciated by marketers. The answer, of course, resides in customers and users. On the one hand, users might start to feel too much presence of ads on feeds, while on the other hand, the globalized use of social media makes it easy to analyze and purchase products from anywhere. Thus, there might be a greater value in equilibrating the number of ads users face when using social media.

There have been emerging solutions that aim to balance the situation, like ad blocking and paid subscriptions. Ad blocking might assist users in getting exposed to fewer ads. Still, brands should pursue effectiveness to reduce promotions’ saturation. Still, for now, the cash cow in media networks is advertising, so the user should state the posture on how many ads they are willing to see online.Some social media platforms have provided a “premium” version of their services by charging a monthly subscription. For example, YouTube Music, Spotify, and even Instagram tested that affiliation method in specific content like subscribers’ lives, stories, and badges. So far, the testing has remained a trial, but it has been interesting enough for other platforms like Tiktok to give it a chance. Thus, it stays unclear which alternative provides more benefits. So, it is your turn! Would you rather have a higher number of ads in your feed or instead pay a small amount monthly for the services you already enjoy?