If you are in the journalism arena you get used to receiving press releases full of statistics. Normally there are headlines in the billions or hundreds of millions and normally about usage of this, take up of that, or the market value of the other.
So when we got a press release that predicted that video advertising on YouTube and Facebook would grow 130% over the next five years and be worth $37 billion by 2022, forgive us, but we were almost unimpressed.
We were actually much more impressed by the fact that a billion hours of video is watched on YouTube every day. That, and that the amount of data that equates to in 2022 is the equivalent of 129 billion 4K videos.
Then, of course, you think ‘that is some investment in network capacity’ and then ‘how do they know’?
‘They’ – in this case Juniper Research – knows because of their sophisticated modelling tools and a lot of experience in doing this. That said, we are always frustrated by the fact that we never seem to keep these kinds of announcements from five years ago, so we can dig them out and laugh, or be very impressed by their prescience.
What we would like to know is how many variables research houses put into these models. Us mere mortals do not know what we will be watching, seeing or reading in six months, let alone five years. For them to predict what will happen in five years seems ambitious to say the least.
Because, with Facebook, YouTube and other social media platforms there many, many variables.
There is the extremist content that governments are now cracking down on. This has changed how YouTube deals with some advertisers, particularly smaller ones. Inevitably, this will drive up costs, both human and technology (AI will not solve this alone). The same goes for Facebook. More so, in fact, as their AI is lagging Google’s by some way and their human team for filtering unpleasant content is nearing 20,000.
Then there is the tax issue which, while small in terms of Google’s turnover, must inevitably begin to bite. And create negative publicity.
Then there is the backlash against social media sites, particularly Facebook, which some are saying is a machine that harvests data for its own ends, and has long forsaken being a social media platform. We said as much the moment it went public, when it had to change from a social media business to a commercial media business.
As a result of increasing hatred of advertising intrusion and distrust spawned from data collection and extremist content, users are liking social media less and less – and leaving. In the UK alone, 5% of people in a recent survey said they had stopped using Facebook in the last year. Twitter lost 6%.
It may be that this is good, in a social sense. Facebook friends are clearly different from real friends (most, anyway) and maybe the pendulum is swinging the other way, towards face to face friendships, and away from Facebook ones.
Add to this the sheer size of these companies. Then think of Standard Oil, that became too big and too powerful for Government to countenance. So they split it up. In fact, people are actively touting the idea of splitting Amazon up. And why stop there?
Either way, you have to wonder whether any or a combination of these tectonic issues could put a dent in research houses’ predictions, and, more importantly, the financial security of companies who rely on advertising for 95% of their business.