Social platforms’ results are extremely strong – will this remain in 2021?
Social platforms’ revenue explode during Q3, will things change 2021 and are you prepared to adapt to these potentially new settings?
Social media companies Facebook, Twitter and Pinterest posted blowout revenue gains in third-quarter earnings released last Thursday, a sign that disruptions related to the coronavirus pandemic have cooled and that marketers again are spending at higher levels.
The strength of these companies’ performance, mirrored in report from other Big Tech platforms like Google and Amazon, signals that digital advertising has broadly fortified its position of dominance in the media market. As brands and users adjusted to the pandemic through Q3, ad investments turned back on, and platforms quickly built out features to accommodate business needs around navigating COVID-19.
Facebook, for example, has introduced a wide array of e-commerce integrations across its core social network, Instagram and WhatsApp in a bid to help small businesses make the shift online. Facebook Shop that rolled out in the second quarter, has seen pleasing progress according to Facebook. Much of the efforts from Facebook were functions targeting SME which enabled the platform to acquire several new advertisers
If Q3 represented a peak for social media and Q4 can be expected to deliver fine results are the next few months also interesting to monitor for other reasons. Though a holiday season impacted by COVID-19 will likely benefit companies that have integrated more e-commerce functionality, and result in a sturdy fourth quarter, more serious challenges are speeding down the pike in 2021.
Data privacy regulations, including the California Consumer Privacy Act (a version of GDPR), continue to affect the digital advertising ecosystem, while antitrust scrutiny of Big Tech is ramping up around the globe. Facebook potentially faces an antitrust lawsuit like to the one that hit Google earlier this month.
Planned changes to Apple’s privacy policies will also have a considerable impact on both mobile platforms and marketers. Apple will soon require apps to ask for opt-in consent from users to access its Identifier for Advertisers (IDFA). It’s a development that has sparked controversy, leading Apple to push back the original implementation date to early next year.
These new conditions will not mean the end of digital advertising, but it emphasizes the importance of always keeping up to the fast pace of development in order to proactively manage all your operations. Facebook and other digital platforms handled the introduction of GDPR in a smooth way and initiatives such as Conversion API will ensure that the platform keep itself adapted to the ever-changing world we all live in.
Ingager is confident that social media, and Facebooks platforms in particular, has a promising future for both users and advertisers. 2021 will bring change in many ways and some of these changes will require new ways of working. Advertisers and agencies that are capable to adapt to regulations, user behaviors, increased competition and enhanced functionality will prosper.