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The world is more interconnected than ever before, and recent months have proved just how significant technology is in our daily lives. But what about social media? A 2019 study showed that nearly two-thirds of the world’s population is plugged into the matrix* and it’s much more than sharing family picnics: it’s an organisational tool for protests, a source of political debates and yes, it still has those funny cat videos. It’s pervasive in our daily lives. Last week, each day on average, I used social networking apps on my phone for 1 hour and 30 minutes – the largest portion of that being Instagram at nearly an hour. But it turns out I’m in the minority, as the average time for millennials is actually 2 hours and 38 minutes, per day!* So I’m putting that extra hour to use (and most likely increasing it) all for the sake of work: FundCalibre now has Instagram, a source for reliable, bite size investing information.
“The first rule of social media is that everything changes all the time. What won’t change is the community’s desire to network.” — Kami Huyse, CEO Zoetica Media
While the fundamental need for human connection hasn’t changed, platforms and technology continue to evolve. Faster internet connections and mobile devices have made social media a significant part of our lives, with the time spent on these apps each day creeping upward. The platforms where we spend our time are also changing: remember MySpace?
Facebook has been one of the most popular social networks on the planet since 2008. A holding in AXA Framlington American Growth**, Facebook – if you include its bundled services – has more than 2 billion people use its network each day^. While it’s unlikely to be topped, Facebook isn’t above public controversy and scandal. The Facebook–Cambridge Analytica data breach in 2018 is an example, as is Mark Zuckerberg‘s testimony about allowing false advertising during the 2020 Presidential election.
Another social media platform making headlines is TikTok, which has taken off over the past few years, not to mention during lockdown. ByteDance, the owner of the short-form video app, is a holding in Scottish Mortgage Investment Trust^^. The average user of TikTok (and its Chinese counterpart, DouYin) spends a staggering 52 minutes per day on the app^.
Qzone, a social networking website based in China, allows users to write blogs, keep diaries, send photos, listen to music, and watch videos. It is owned by Tencent, a holding in First State Global Emerging Markets Focus**, Invesco China Equity** and Jupiter Asian Income**. Qzone attracts around half a billion users per month. However, WeChat, also owned by Tencent, is now the service of choice for almost everyone in China.
Gen Z spends the most time on social media at nearly 3 hours a day! But these younger people are moving away from platforms like Facebook, in favour of multimedia-heavy sites such as YouTube and Instagram. While the latter is owned by Facebook, YouTube is a part of Google, who parent company Alphabet is a top ten holding in Lazard US Equity Concentrated**. Right this minute, no fewer than 4.5 million videos on YouTube are being watched*.
Interestingly, since 2015 there’s been an increase in those using social media to network for their jobs too. Although not exclusively all via LinkedIn, the business-oriented social network platform was launched in 2003 and is a textbook example of slower and steadier growth. Owned by Microsoft Corp, a holding in Brown Advisory Global Leaders** and Premier Diversified Growth**, it has grown every single year since it was launched, with a 24% increase in 2019^.
Lastly, Pinterest: a popular source of inspiration, I myself used when decorating our new house. Cormac Weldon, manager of Artemis US Smaller Companies, commented recently, “Many of the most successful internet companies are extremely large (and so lie beyond our hunting ground). But we do have one holding in this area: Pinterest.
“Although we first bought Pinterest some time ago, we have added to our position over recent months. It has begun to prosper in the way we hoped. Not only has it benefited from increased usage during lockdown, that surge seems to have persisted even as lockdowns
Ultimately social media is a broad and complex industry, with each platform appealing to a different range of age groups and personalities. As the global population continues to grow, we’re likely to see more and more opportunities to stay connected.
*Source: Global Web Index, Visualizing Social Media Use by Generation, 2019
**Source: Fund factsheet, 31 July 2020
^Source: Visual Capitalist, The Rise and Fall of Social Media Platforms, 2019
^^Source: Annual Report & Accounts, March 2020