Last year was tough for social media giants because they faced a string of high-profile controversies.
While the leading social media giants continued to perform well financially in 2017, it was a tough year image-wise for the likes of Facebook and YouTube as they faced a string of high-profile controversies, raising questions as to the ethical responsibility of firms that are playing an increasingly dominant role in the way we consume news, entertainment, and interact with each other on a daily basis.
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Consumption of social media along with advertising revenues continued to grow in 2017. In June, Facebook announced that the platform had reached a milestone of 2 billion users globally while the firm was projected to have boosted ad sales by 46 percent and doubled its net income during the year.
Facebook dominates the social media industry by some margin with an estimated 2.07 billion monthly active users by the third quarter of 2017, yet YouTube (1.5 billion), Instagram (800 million) and Twitter (330 million) all increased their market share during the past year.
Yet scrutiny on social media’s role in the 2016 U.S. election; the demonetization of YouTube content deemed to be politically insensitive; and Facebook’s much-criticized relationship with the Chinese government regarding state censorship produced a landmark debate within both the tech industry and among the general public.
Most controversially, Facebook, Google, and Twitter were called to testify before Congress as to the purchase of hundreds of thousands of dollars’ worth of politically related ads by “inauthentic accounts” in the run up to the 2016 U.S. election, many of them linked to Russia.
Beyond the politics, the societal impact of our favorite social media sites also drew criticism, including from within the tech industry itself. Much publicized remarks by former Facebook vice-president Chamath Palihapitiya in November that platforms such as the one hosted by his one-time employer were “destroying how society works” only added to the sense of crisis.
Social media expectations
In 2018, expect the shadow of government regulation to further intensify the debate. Alleged tax evasion by Facebook and Google, in particular, has become a hot topic in Europe while the issue of personal data analysis for use in targeted advertising has prompted ethical concerns that could eventually become a political football.
The rapidly evolving nature of social media means the debate over how to regulate the industry is unlikely to end soon. Key for the major players will be maintaining their appeal to users while satisfying increasing public and political demands for ethical behavior and transparency. Finding the right balance may not be easy.
