Businesses such as Facebook built their appeal among younger early adopters but they will make the bulk of their money from older users, says the Institute of Directors' Martin Thomas
The author and social media theorist Clay Shirky says technological tools “don’t get socially interesting until they get technologically boring”. What he means is that even after the early adopters have inevitably moved on to something new, it is the adoption of technologies by mainstream audiences that ultimately determines whether or not they will have a positive social impact.
Although Facebook and the like rose to ubiquity thanks to younger early adopters, looking for something new and exciting, they will make the bulk of their money from older, more loyal users.
Much of the talk in social media circles is about young people starting to abandon Facebook. A recent US report by iStrategyLabs has revealed that the number of teenagers using the site has dropped by 25 per cent in the past three years.
Conversely, the 45-54 age group is now the fastest-growing demographic on Facebook and Google+ and the number of 55 to 65-year-olds using Twitter has increased by 79 per cent since 2012.
Admittedly these growth figures reflect a low starting point, but they underline how even Facebook – which reached the grand old age of ten this month – has reached a stage of maturity.
When your parents, and even worse your grandparents, are on Facebook, it will inevitably lose some of its cachet. According to anthropologist Daniel Miller, as far as Britain’s 16 to 18-year-olds are concerned, Facebook is “dead and buried” and quite frankly, they are “embarrassed even to be associated with it”.
How the mighty have fallen. One minute you’re the hottest new technology on the planet, attracting a hyperbolic stock-price valuation; next, you’re as fashionable as your dad’s video collection.
All technologies operate in a Darwinian ecosystem: they are always at risk of being replaced by something new. Remember when Sony dominated consumer electronics, IBM dominated PCs and Nokia enjoyed a 70 per cent market share? History has shown that technology-based businesses with dominant market shares and apparently bullet-proof business models will eventually be replaced by younger, more innovative versions of themselves.
As we speak, there are smart people working in sheds and cluttered labs in Silicon Valley or any other Silicon derivative – Silicon Fen, Silicon Roundabout, you name it – inventing better versions of Facebook and Twitter.
The latest hot new social media app is the typically idiosyncratically-named Jelly, created by Twitter co-founder Biz Stone. The Jelly app allows people to pose questions, accompanied by a picture, to their Twitter and Facebook contacts.
Some of the early uses of the app, according to the Jelly website, have included providing photography advice, advising on a winning chess move, fashion tips, saving a life (of a spider) and learning how to hang art on a brick wall.
Admittedly, these don’t sound like the most essential things in life, but never underestimate the social value of the apparently trivial.
As with most new social technologies, many people’s initial response is to question the need (“What’s the point?”) and criticise the name. But Biz Stone’s track record merits respect. It took most people a few years to see the point of his Twitter app beyond trivial questions such as “Should I have bacon or sausages for breakfast?”.
There will always be another Jelly around the corner, grabbing the attention of fickle youth and potentially cannibalising the business models of more established technologies. The good news for the social media businesses trying to appease demanding investors and justify inflated share prices is that older users are more likely to stick with them.
We are less worried that Facebook has become a bit boring and unfashionable. We like it because it is useful, not because it is trendy. The technology is tried and tested and just about everyone in our social circle uses it. It may be boring, but it works.