By Shubhranshu Singh
When Covid shut the world down, it was tech that kept it up and running. All things digital surged even as the rest of the sectors tanked. But then things changed. The Nasdaq composite, a tech-heavy index, shed off one third of its value. This loss of value totals a staggering $3 trillion. That is equal to India’s GDP. Mark Zuckerberg was tech’s Don Quixote charging at the windmills, and Cervantes himself couldn’t have made a more dramatic loss come alive. Meta shed two-thirds of its value.
‘The Age of Social Media Is Ending’, an article by Ian Bogost in The Atlantic (bit.ly/3IzLR9l), has generated much interest globally. Those who were hyping the narrative of tech exceptionalism should have known this was coming.
Digital markets accessible via internet-enabled mobile phones had been plateauing and maturing for long. Alphabet and Meta depend on online advertising for their revenue. The growth came from eating into the share of ‘old media’. Close to 70% of ad spending in the United States—by far the largest market—turned digital. Then, the base effect caught up. Novelty gone, the music stopped, and the party was over. Looking at just Google trends, the term Facebook has witnessed fading interest levels from an Index 100 to Index 25. Meta’s drops in revenue had never occurred even once in its history.
If Big Tech had looked to the past, it would have got enough guidance to navigate the future. Pioneering companies and brands get scale, concentration, ecosystem advantages, and synonymity with entire verticals and processes. So it was with Tech: Google was search and Facebook, social media. Then, the time bomb went ‘TikTok’, and Facebook’s user count began to drop hard.
When the times got tougher, the party turned to strife. Apple vs Google on privacy. Amazon vs Google in cloud services. Netflix vs Disney vs Warner Bros vs Apple vs Amazon in content. Netflix dropped 50% in terms of market value last year and rushed to pure play advertising with its nose bleeding.
This coincided with headwinds ripping the roof off for digital companies. The Federal Reserve raised interest rates continuously to contain inflation. Tech companies turned unappealing because high rates erode the present value of promised earnings. Such has been the chaos on the way down that even the collapse of the cryptoverse barely made headline news. Geopolitical tensions made China unattractive. ‘Friendshoring’ by Americans drove
Apple to shift new production to India and Vietnam.
But, within all this, the case of legacy social media’s meltdown is the most noteworthy. As social media companies grew their user bases into the hundreds of millions, the business applications of Facebook, Twitter, and other social platforms began to take shape.
Social media companies had access to some of the richest trackable user data ever conceived. They were powered by a user-data-based business model, designed to mine, map and manipulate our actions to the degree that sophisticated algorithms learn every bit about us and exploit this in possibly insidious ways.
The shapeshifting of the social digital space from ‘networking’ to ‘media’ might appear cosmetic, but the duality soon became irrelevant. Technological improvements — specifically, powerful in-phone cameras—shifted the focus of mobile apps to video and images. In addition to written messages, end-users could now broadcast in real time. But then branded content took over and community networking became an optional extra.
Effectively, social networking has now migrated to chat applications like WhatsApp and Telegram, away from the cacophony and forced feed of social ‘media’. As our lives moved online, social media platforms could predict our emotions and behaviours. They leverage these insights and auction us to the highest advertising bidder.
But users aren’t just being sold grocery or shoes. The targeting capabilities of these platforms give anyone with a motive the power and precision to create disinformation on scale.
Now toss machine learning into this concoction enabling deployment of tailor-made content targeting potential targets to a ‘segment of one’ level. Machine learning is at work to deploy the right ads, not to find like-minded people or a long-lost friend. The rules of engagement swung away from community to focus on content without our conscious consent. Social media platforms started monetising reach. This is why the hype cycle started and now there is more content than community building on social platforms.
But, everything about us cannot be allowed to be monetised and become a product for commerce. The required emergence of social networking 2.0 might just pave way for a much bigger and stronger ecosystem where smaller circles are the new reality.
(The author is Vice-president, marketing, domestic and international business, Tata Motors)