In the past several months, there have been a lot of talks about economic uncertainty. The pandemic’s implications on the global economy are still being felt. With changes like stimulus checks, dropping interest rates, and more free time than ever before, there was a massive run of success for investments like cryptocurrency and major publically-traded companies. However, that bull market has ground to a halt, and it now seems likely that a recession is upon us.
This is being felt by companies across industries dealing with the fallout from a decrease in spending. The stock market has seen a significant drop from previous values. Many of the companies that have had the harshest declines are in technology, including several social media companies that have seen their value drop astronomically.
While this doesn’t spell the end of the road for social media, it is a cause for concern for people involved in the industry. While stocks ebb and flow, these drops can reflect important changes in investor or consumer confidence. Let’s look at the current situation and dive into what it means for the future of social media.
The Current Decline
The drop in stock prices for major social media platforms is certainly alarming. While a lot of the decline in social media stock’s value is a product of current market conditions, many of these platforms have been hit significantly harder than the rest of the market. This could mean a change in how these companies are valued on the market. There are several major examples of social platforms that have had tough starts to their 2022.
As of writing in May 2022, Facebook’s stock is currently valued at $177.33. This represents a steep decline of 47.87% in just six months. This is certainly dramatic. Even more dramatic? How Snapchat’s parent company, Snap Inc., has fared. In the last six months, the stock price of Snap has dropped 73.18%. Twitter’s stock price is down 22% over the last six months, despite the positive momentum the Musk purchase had for their business outlook. Pinterest is down nearly 62% in the past six months.
This is all no coincidence, so what is going on? Why are social media stocks experiencing such dramatic tumbles? One of the big reasons is that several major companies have had to make some unfortunate announcements to shareholders that have shaken consumer confidence. Meta had to announce in early 2022 that they experienced their first quarter ever where their user base declined. More recently, Snap Inc. shared with shareholders that they weren’t going to reach their revenue targets, dragging their stock and the stock of many other social media companies down.
This is scary not just for investors but people whose businesses are based on the success and growth of social media. Whether influencer marketer companies or Facebook Ads experts, the social media ecosystem is important to uphold a lot of businesses.
What Does It Mean for the Future of Social Media?
The question remains whether this change reflects the future of the social media industry or just current market conditions. Rising inflation concerns, interest rate growth, and global turmoil from the war in Ukraine and the supply-chain disconnect are fueling serious financial uncertainty. It isn’t just major social media companies seeing huge stock value decreases; it is almost everyone. That might mean that this situation is a product of market conditions.
There can also be an argument that this is a serious concern for smaller businesses in the social media industry. The same CNBC report references Morgan Stanley analysts that expect online ad platforms to feel the downsides of this consumer pullback. The better the economy is, the more consumers have to spend on non-necessities, and with the market moving towards a recession, these could be lean times for social media marketers.
Long-term, the prognosis for social media marketing is still incredibly strong. The growth of social commerce and the creator economy will continue as consumers continue to focus more of their spending online. While it is certainly concerning to see major tech giants struggling, social media isn’t going anywhere. While large economic trends impact every industry, the social media marketing sphere will likely be able to shake off the impacts of this current moment and resume its stratospheric growth.
Social media outreach can help your business achieve stratospheric growth, and partnering with an influencer marketing firm is critical to optimizing this area of your business. Influence Hunter is a top influencer marketing agency with years of experience helping businesses from multinational corporations to rising start-ups develop customizable, high-performing campaigns. Contact Us Today to find out how we can help grow your business.