Just how dominant a business tool was social media in 2017? Despite being involved in an investigation by Congress, Facebook reported its highest earnings ever in Q3, up nearly 50% from a year ago. Its mobile ads are so popular that the platform is actually starting to run out of space for them, even though they’re charging more than ever. Meanwhile, the network eclipsed the 2-billion-user mark, now counting nearly one-third of the planet among its user base.
Behind these numbers is a growing realization among businesses that social media is the single most effective way to reach audiences, with teens (i.e. tomorrow’s consumers) now spending up to nine hours a day on social platforms. An insatiable appetite for video among users, paired with better technology for making, posting and targeting social updates, sees companies now spending more money on social and digital ads than on TV advertising.
These trends show little sign of slowing up in 2018. Here’s a glimpse into five key factors that will impact how businesses use social media in the year ahead:
Goodbye free reach on social media (for real). For years, companies’ organic reach on Facebook (the percentage of their followers who see company updates that aren’t “boosted” with ad money) has been dwindling, dipping as low as 2%. Now it seems Facebook may finally kill organic reach on the News Feed entirely. This fall, the network rolled out a new “Explore Feed,” a kind of second-class stream just for company updates. Testing has already begun in some countries to banish all company social posts from the all important (and increasingly crowded) News Feed over to Explore.
Unless, of course, you pony up. These latest developments are a final, firm reminder that Facebook is now a paid platform for companies, little different in this respect from traditional pay-to-play advertising channels like TV, radio, print or billboards. To reach an audience via the News Feed—any audience, at all—it’s going to cost you. Considering that 51% of companies currently struggle with lack of a social media ads budget, this may prove a harsh wake-up call in 2018. One silver lining: Facebook has pioneered some of the most precise ad targeting tools ever. (Wanna pitch to twenty-something soccer fans living in Phoenix who work in retail and like dogs? No problem.) So, at the least, ad money promises to be well spent.
By Forbes Contributor Ryan Holmes