Embracing Disruption in 2023
A year ago NFT’s dominated the conversation, crypto was king, Instagram ad spending was in high gear, and the metaverse was on the minds of leaders across industries. As we enter 2023, things couldn't be more different. Below we look back and consider what it means for the future.
The TikTok-ification of Social Media
It’s not just you. In 2022 social media platforms started looking more like TikTok. Instagram “reinvented” itself to focus more on videos than photos, and started showing more algorithmic content as opposed to posts from family and friends.
After pushback from users and celebrities alike (including Katelyn Jenner and Kim Kardashian) Instagram vowed to roll back some of the revisions, but made it clear more changes were coming if it was going to compete against TikTok.
Competition became even harder for Instagram and Facebook when Apple gave a billion iOS users the option to opt-out of being tracked –– limiting Meta’s ability to target ads as effectively as it once did. Rounding out the shifts, YouTube’s TikTok clone, YouTube Shorts, reached 30 billion daily views in 2022, making it one of the fastest-growing platforms of the year – and a way for brands to drive organic growth other than TikTok.
What’s next
Look for TikTok to continue innovating as short-form video dominates. Algorithms across social will increasingly be powered by passions (what we love) over people (who we follow), requiring brands to develop data-rich behavioral profiles to help them connect more effectively with consumers around their personal interests.
Social Commerce Soared
The more time we spent on social media in 2022, the more money we spent there as well. In 2022, Americans spent an estimated $52 billion shopping from their feeds, up 34.4% from 2021. While Instagram pulled back on its commerce initiatives, TikTok doubled down, expanding plans for TikTok Shop (where users can complete sales in-app) and announcing plans to build its own fulfillment centers, setting up a head-to-head battle with Amazon.
Videos tagged #TikTokMadeMeBuyit generated 36 billion views in 2022 (a +500% increase) making shopping even more central to the social conversation. TikTok further embraced algorithmic commerce (A-Commerce) in 2022, strategically leveraging its proprietary algorithm to target products as well as it curates content.
What’s Next
Considering 64% of social media users surveyed by Accenture say they have already purchased from a feed, expect to see creators leveling up their selling skills to boost their value. Brands that engage them can drive more sales and lead revenue growth as the space expands to reach a projected $80 billion in 2025. Look for Pinterest to become a key social commerce player as it fuels discovery and purchase intent through an enhanced shopping API that lets merchants sync their catalogs to the platform.
The Rise and Reimagination of the Metaverse
While Qulture first talked about the metaverse back in 2020, things got real in 2022 when brands like Nike went all in, leveraging its acquisition of RTFKT and generating $186M in revenue. Tiffany, Gucci, Dolce & Gabbana, and Adidas followed suit, generating a combined $59M in revenue before crypto crashed and inflation rose, sending shockwaves across the Web3 world.
Brands that explored the space with a focus on creating value, however, gained critical insights, deepened relationships with younger consumers, and innovated ahead of competitors who stayed on the sidelines. Qulture studied what drove success and developed a three-part framework focused on Identity, Ownership and Community to help brands craft their Web3 strategy for 2023 and beyond.
What’s Next
Make no mistake, Web3 isn’t gone - it’s evolving. In 2022 we broke through a critical adoption phase as more than 400 million people bought crypto. At 8% of all internet users, we are clearly in the early adopter phase as thousands of developers continue to build apps and experiences to power Web3.
For inspiration in 2023, brands should look to leaders like Starbucks that are reframing NFTs as loyalty drivers and NIKE which is expanding its virtual apparel and sneakers business by tapping into Gen Z’s love for gaming and desire to express themselves through their avatars. While 2022 reminded us innovation can be messy, the business case for the blockchain has never been stronger.