How Elon Musk Can Save the X Formerly Known as Twitter
Social media platforms like X, Meta, and Reddit are struggling to provide the same free services that boosted them to tech giant status.
The social media value proposition was a great one: They give you a free app to chronicle your life, connect with friends, meet new people, and be entertained, and you give them permission to show you ads.
The issue is that the big tech bubble popped, leading to a 649% increase in layoffs across the industry.
Amazon, which owns popular livestream platform Twitch, led the way with over 27,000 workers laid off. Meta (which owns Facebook and Instagram), Google (which owns YouTube), and X (formerly Twitter) all ranked in the tech layoff top 15 as well.
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Big Tech attempts to course-correct
One way the social media giants have responded to the economic downturn is by charging a fee for verification status.
Musk introduced “X Premium” shortly after purchasing Twitter, and Meta launched “Meta Verified” not long after. These programs come with a verified identity checkmark and benefits such as better analytics, publishing options and advantages, and higher perceived authority.
YouTube has begun fighting harder against the use of ad blockers on their videos, hoping to encourage subscription to “YouTube premium”. They’re also making changes to the advertising options available to creators and advertisers, likely in pursuit of a more profitable model.
Reddit has also shown signs of needing to boost their revenue. In 2023 they announced a significant increase in their API pricing. Because the vast majority of Reddit moderators are unpaid and rely on the API to power their integrated software, this caused a massive outcry and many subreddits joined in a protest.
Other social media platforms have suffered their own user blowback. Many regular browsers are becoming less willing to spend time on apps that don’t cater adequately to their preferences.
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The bottom line looms
Social apps need to increase profitability, and so far their solutions to this problem have been lacking. They’re charging more for the same things (such as increasing ad costs) and charging for things which were previously free (such as verified status).
While social media professionals are amenable to these costs, the social media value proposition is suddenly much less appealing to the masses. What these towers of technopoly need is a monetization strategy that improves their user experience instead of making it worse.
How social media apps can earn more while improving user experience
Considering the current level of technology we enjoy, most digital advertising isn’t much different than oldschool advertising. Social media ads are basically online billboards, and search engine ads aren’t much different than yellow pages adverts.
Of course, there are many aspects of digital marketing that are quite unique, especially organic marketing. But the social media platforms don’t make money from organic marketing, at least not directly. Besides, there will always be companies who are happy to pay to attract new customers.
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While digital ads are still very cost effective when done well, they aren’t especially trustworthy. Most people can’t distinguish between an ad promoting a genuinely great offer and a manipulative ad designed to extract as much money as possible while providing little value.
Most people use search engines to find information, and Google is all about providing the most helpful organic results for their users. The problem is that Google ads display above the organic results, which means that businesses with low-quality products can get the same (or more) attention as businesses with high-quality products.
The way to solve both of these problems is to create paid advertising solutions that brands can use to reach their ideal customers in a way that doesn’t intrude on their enjoyment of their digital experiences.
Marketing and advertising surveys
Marketing surveys are nothing new. You’ve probably clicked on a digital ad before that led to some sort of survey or quiz which ended with you being asked to subscribe to a list or buy a product. This is arguably one of the best ways to segment leads and serve the best possible offers to new and returning customers.
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The issue with using marketing surveys with social ads is that you have to create the survey on your own platform, craft an ad with a high clickthrough rate, and set up your autoresponders and fulfillment automations on the back end.
This is a lot of work, and it makes advertiser profitability much harder to achieve. The average CTR (click through rate) for Facebook ads is less than 1%. That means that in order to get ten people to even LOOK at your quiz or landing page, you need to pay for 1000+ people to see your ad, and that’s IF your ad performs above average.
Of course, not everyone who visits your landing page will complete the optin process. Even if you convert 50% of visitors (which is far above average), you’d be paying for 1000 ad views to get 5 leads.
It’d be easier if the social media platforms did more to facilitate the optin process. I’ll explain how this can be accomplished later in the article, for now let’s look at another superior monetization model.
Influencer marketplaces
Influencer marketing is a massive and lucrative industry. When a brand partners with a creator whose following matches their customer avatar, they can pay premium prices and still get a high return on ad spend.
Plenty of influencer marketing marketplaces already exist, and most of them are centered around the engagement their creators can produce on social media. These marketplaces can charge anything from a small percentage of transactions to $1000+ per month for access to their top talent and software.
The question is, why aren’t platforms like X and Meta creating their own influencer marketplaces? They have the data, trust, and authority to create a superior service to any of the third-party sites, and they can monetize the facilitation of brand partnerships in a variety of ways.
Browsing and buying influencer services directly on a social platform would save money and time for brands and increase profits and ease of use for creators, all while providing a steady source of income for the app.
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User-Generated Content campaigns
Like marketing surveys, UGC campaigns are not a new idea. But like influencer marketing, most social media platforms don’t currently offer it as a dedicated option.
UGC campaigns are one of the best ways to generate user feedback and testimonials, increase brand awareness, and create a sense of community within your customers. While you can technically run UGC campaign ads on most social apps, the tools are not designed to make this easy and in some cases there are rules which make it more difficult.
If social media platforms want to help their advertisers find new customers and help their users enjoy their experience, they should make UGC campaigns as easy to launch and run successfully as possible.
How to implement user-friendly advertising strategies
Almost all digital marketing can be put into one of two categories: Attraction marketing and interruption marketing.
Attraction marketing includes content creation, video marketing, search engine optimization, and search advertising. The essence of attraction marketing is to create an offer people are already interested in and promote it where your ideal customers are looking to find it.
Interruption marketing includes display ads such as website native ads and Facebook ads, video ads (including traditional television commercials), and direct outreach. Interruption marketing relies on stealing attention from other activities (such as an ad in your social media feed).
One of the most effective interruption marketing techniques is to create ads that look and feel like organic content. A traditional example is a television commercial that tells an engaging story or makes the viewer laugh. Modern examples include ads that use memes or educational content as the creative.
I think the way forward for digital advertising is to bridge the gap between interruption and attraction marketing by empowering audiences to decide how and when they engage with ads.
Let platform users earn their ad-free experience
Current methods of advertising online often involve ads that many users consider annoying, distracting, and misleading. This is because advertisers are obligated to grab as much attention as possible so they can have a positive ROAS (return on ad spend).
My solution: Social media platforms should create an option where their users can earn ad-free browsing by opting into marketing campaigns on their own schedule.
For example, X premium costs $8 per month. Twitter/X could create a tab where users earn credit towards their subscription by participating in surveys or UGC campaigns. An average user would likely earn $8 credit in 30 minutes or less instead of having to scroll through ads every time they want to get updates on their friends or the latest news.
Using the same system, brands could pay influencers via the platform to boost their posts or to create their own promotional content. The influencers could then use their credit for premium subscriptions or to create their own campaigns, or just have it paid out to their bank.
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The Way Forward
I’m sure there are lots of nuances I’m not considering, but after 5+ years in digital marketing I strongly believe that most online ads are outdated. The ad formats they offer are just digital versions of traditional ads like billboards and yellow pages.
It makes sense that online advertising started by mimicking traditional advertising, but there’s no reason for that to continue. We know that certain types of marketing campaigns like surveys and UGC are extremely effective, and we know that one of the biggest sales funnel bottlenecks is sending users to a different website.
By providing modern campaign options that people engage with intentionally, social platforms can offer better results to advertisers and a more enjoyable experience to the average user.
What do you think about the future of advertising? I encourage you to share this post on social media and include your thoughts, or contact me if you’d like to discuss my ideas.
Need help getting results with digital marketing and advertising? Claim your spot on the waiting list for my mastermind mentoring group.
