The Impact of Social Media: Is it Irreplaceable?

In little more than a decade, the impact of social media has gone from a being an entertaining extra to a fully integrated part of nearly every aspect of daily life for many.

Recently in the realm of commerce, Facebook faced skepticism in its testimony to the Senate Banking Committee on Libra, its proposed cryptocurrency and alternative financial system. In politics, heartthrob Justin Bieber tweeted the President of the United States, imploring him to “let those kids out of cages.” In law enforcement, the Philadelphia police department moved to terminate more than a dozen police officers after their racist comments on social media were revealed.

And in the ultimate meshing of the digital and physical worlds, Elon Musk raised the specter of essentially removing the space between social and media through the invention — at some future time — of a brain implant that connects human tissue to computer chips.

All this, in the span of about a week.

As quickly as social media has insinuated itself into politics, the workplace, home life and elsewhere, it continues to evolve at lightning speed, making it tricky to predict which way it will morph next. It’s hard to recall now, but SixDegrees.com, Friendster and Makeoutclub.com were each once the next big thing, while one survivor has continued to grow in astonishing ways. In 2006, Facebook had 7.3 million registered users and reportedly turned down a $750 million buyout offer. In the first quarter of 2019, the company could claim 2.38 billion active users, with a market capitalization hovering around half a trillion dollars.

“In 2007 I argued that Facebook might not be around in 15 years. I’m clearly wrong, but it is interesting to see how things have changed,” says Jonah Berger, Wharton marketing professor and author of Contagious: Why Things Catch On. The challenge going forward is not just having the best features, but staying relevant, he says. “Social media isn’t a utility. It’s not like power or water where all people care about is whether it works. Young people care about what using one platform or another says about them. It’s not cool to use the same site as your parents and grandparents, so they’re always looking for the hot new thing.”

Just a dozen years ago, everyone was talking about a different set of social networking services, “and I don’t think anyone quite expected Facebook to become so huge and so dominant,” says Kevin Werbach, Wharton professor of legal studies and business ethics. “At that point, this was an interesting discussion about tech start-ups.

“Today, Facebook is one of the most valuable companies on earth and front and center in a whole range of public policy debates, so the scope of issues we’re thinking about with social media are broader than then,” Werbach adds.

Cambridge Analytica, the impact of social media on the last presidential election and other issues may have eroded public trust, Werbach said, but “social media has become really fundamental to the way that billions of people get information about the world and connect with each other, which raises the stakes enormously.”

Just Say No

“Facebook is dangerous,” said Sen. Sherrod Brown (D-Ohio) at July’s hearing of the Senate Banking Committee. “Facebook has said, ‘just trust us.’ And every time Americans trust you, they seem to get burned.”

Social media has plenty of detractors, but by and large, do Americans agree with Brown’s sentiment? In 2018, 42% of those surveyed in a Pew Research Center survey said they had taken a break from checking the platform for a period of several weeks or more, while 26% said they had deleted the Facebook app from their cellphone.

A year later, though, despite the reputational beating social media had taken, the 2019 iteration of the same Pew survey found social media use unchanged from 2018.

Facebook has its critics, says Wharton marketing professor Pinar Yildirim, and they are mainly concerned about two things: mishandling consumer data and poorly managing access to it by third party providers; and the level of disinformation spreading on Facebook.

“Social media isn’t a utility. It’s not like power or water where all people care about is whether it works. Young people care about what using one platform or another says about them.”–Jonah Berger

“The question is, are we at a point where the social media organizations and their activities should be regulated for the benefit of the consumer? I do not think more regulation will necessarily help, but certainly this is what is on the table,” says Yildirim. “In the period leading to the [2020 U.S. presidential] elections, we will hear a range of discussions about regulation on the tech industry.”

Some proposals relate to stricter regulation on collection and use of consumer data, Yildirim adds, noting that the European Union already moved to stricter regulations last year by adopting the General Data Protection Regulation (GDPR). “A number of companies in the U.S. and around the world adopted the GDPR protocol for all of their customers, not just for the residents of EU,” she says. “We will likely hear more discussions on regulation of such data, and we will likely see stricter regulation of this data.”

The other discussion bound to intensify is around the separation of Big Tech into smaller, easier to regulate units. “Most of us academics do not think that dividing organizations into smaller units is sufficient to improve their compliance with regulation. It also does not necessarily mean they will be less competitive,” says Yildirim. “For instance, in the discussion of Facebook, it is not even clear yet how breaking up the company would work, given that it does not have very clear boundaries between different business units.”

Even if such regulations never come to pass, the discussions “may nevertheless hurt Big Tech financially, given that most companies are publicly traded and it adds to the uncertainty,” Yildirim notes.

One prominent commentator about the negative impact of social media is Jaron Lanier, whose fervent opposition makes itself apparent in the plainspoken title of his 2018 book Ten Arguments for Deleting Your Social Media Accounts Right Now. He cites loss of free will, social media’s erosion of the truth and destruction of empathy, its tendency to make people unhappy, and the way in which it is “making politics impossible.” The title of the last chapter: “Social Media Hates Your Soul.”

Lanier is no tech troglodyte. A polymath who bridges the digital and analogue realms, he is a musician and writer, has worked as a scientist for Microsoft, and was co-founder of pioneering virtual reality company VPL Research. The nastiness that online existence brings out in users “turned out to be like crude oil for the social media companies and other behavior manipulation empires that quickly came to dominate the internet, because it fuelled negative behavioral feedback,” he writes.

“Social media has become really fundamental to the way that billions of people get information about the world and connect with each other, which raises the stakes enormously.”–Kevin Werbach

Worse, there is an addictive quality to social media, and that is a big issue, says Berger. “Social media is like a drug, but what makes it particularly addictive is that it is adaptive. It adjusts based on your preferences and behaviors,” he says, “which makes it both more useful and engaging and interesting, and more addictive.”

The effect of that drug on mental health is only beginning to be examined, but a recent University of Pennsylvania study makes the case that limiting use of social media can be a good thing. Researchers looked at a group of 143 Penn undergraduates, using baseline monitoring and randomly assigning each to either a group limiting Facebook, Instagram and Snapchat use to 10 minutes per platform per day, or to one told to use social media as usual for three weeks. The results, published in the Journal of Social and Clinical Psychology, showed significant reductions in loneliness and depression over three weeks in the group limiting use compared to the control group.

However, “both groups showed significant decreases in anxiety and fear of missing out over baseline, suggesting a benefit of increased self-monitoring,” wrote the authors of “No More FOMO: Limiting Social Media Decreases Loneliness and Depression.”

Monetizing a League (and a Reality) All Their Own

No one, though, is predicting that social media is a fad that will pass like its analogue antecedent of the 1970s, citizens band radio. It will, however, evolve. The idea of social media as just a way to reconnect with high school friends seems quaint now. The impact of social media today is a big tent, including not only networks like Facebook, but also forums like Reddit and video-sharing platforms.

“The question is, are we at a point where the social media organizations and their activities should be regulated for the benefit of the consumer?”–Pinar Yildirim

Virtual worlds and gaming have become a major part of the sector, too. Wharton marketing professor Peter Fader says gamers are creating their own user-generated content through virtual worlds — and the revenue to go with it. He points to one group of gamers that use Grand Theft Auto as a kind of stage or departure point “to have their own virtual show.” In NoPixel, the Grand Theft Auto roleplaying server, “not much really happens and millions are tuning in to watch them. Just watching, not even participating, and it’s either live-streamed or recorded. And people are making donations to support this thing. The gamers are making hundreds of thousands of dollars.

“Now imagine having a 30-person reality show all filmed live and you can take the perspective of one person and then watch it again from another person’s perspective,” he continues. “Along the way, they can have a tip jar or talk about things they endorse. That kind of immersive media starts to build the bridge to what we like to get out of TV, but even better. Those things are on the periphery right now, but I think they are going to take over.”

Big players have noticed the potential of virtual sports and are getting into the act. In a striking example of the physical world imitating the digital one, media companies are putting up real-life stadiums where teams compete in video games. Comcast Spectator in March announced that it is building a new $50 million stadium in South Philadelphia that will be the home of the Philadelphia Fusion, the city’s e-sports team in the Overwatch League.

E-sports is serious business, with revenues globally — including advertising, sponsorships and media rights — expected to reach $1.1 billion in 2019, according to gaming industry analytics company Newzoo.

“E-sports is absolutely here to stay,” says Fader, “and I think it’s a safe bet to say that e-sports will dominate most traditional sports, managing far more revenue and having more impact on our consciousness than baseball.”

It’s no surprise, then, that Facebook has begun making deals to carry e-sports content. In fact, it is diversification like this that may keep Facebook from ending up like its failed upstart peers. One thing that Facebook has managed to do that MySpace, Friendster and others didn’t, is “a very good job of creating functional integration with the value they are delivering, as opposed to being a place to just share photos or send messages, it serves a lot of diversified functions,” says Keith E. Niedermeier, director of Wharton’s undergraduate marketing program and an adjunct professor of marketing. “They are creating groups and group connections, but you see them moving into lots of other services like streaming entertainment, mobile payments, and customer-to-customer buying and selling.”

“[WeChat] has really instantiated itself as a day-to-day tool in China, and it’s clear to me that Facebook would like to emulate that sort of thing.”–Keith Niedermeier

In China, WeChat has become the biggest mobile payment platform in the world and it is the platform for many third-party apps for things like bike sharing and ordering airplane tickets. “It has really instantiated itself as a day-to-day tool in China, and it’s clear to me that Facebook would like to emulate that sort of thing,” says Niedermeier.

Among nascent social media platforms that are particularly promising right now, Yildirim says that “social media platforms which are directed at achieving some objectives with smaller scale and more homogenous people stand a higher chance of entering the market and being able to compete with large, general-purpose platforms such as Facebook and Twitter.”

Irreplaceable – and Damaging?

Of course, many have begun to believe that the biggest challenge around the impact of social media may be the way it is changing society. The “attention-grabbing algorithms underlying social media … propel authoritarian practices that aim to sow confusion, ignorance, prejudice, and chaos, thereby facilitating manipulation and undermining accountability,” writes University of Toronto political science professor Ronald Deibert in a January essay in the Journal of Democracy.

Berger notes that any piece of information can now get attention, whether it is true or false. This means more potential for movements both welcome as well as malevolent. “Before, only media companies had reach, so it was harder for false information to spread. It could happen, but it was slow. Now anyone can share anything, and because people tend to believe what they see, false information can spread just as, if not more easily, than the truth.

“It’s certainly allowed more things to bubble up rather than flow from the top down,” says Berger. Absent gatekeepers, “everyone is their own media company, broadcasting to the particular set of people that follow them. It used to be that a major label signing you was the path to stardom. Now artists can build their own following online and break through that way. Social media has certainly made fame and attention more democratic, though not always in a good way.”

Deibert writes that “in a short period of time, digital technologies have become pervasive and deeply embedded in all that we do. Unwinding them completely is neither possible nor desirable.”

His cri de coeur argues: that citizens have the right to know what companies and governments are doing with their personal data, and that this right be extended internationally to hold autocratic regimes to account; that companies be barred from selling products and services that enable infringements on human rights and harms to civil society; for the creation of independent agencies with real power to hold social-media platforms to account; and the creation and enforcement of strong antitrust laws to end dominance of a very few social-media companies.

“Social media has certainly made fame and attention more democratic, though not always in a good way.”–Jonah Berger

The rising tide of concern is now extending across sectors. The U.S. Justice Department has recently begun an anti-trust investigation into how tech companies operate in social media, search and retail services. In July, the John S. and James L. Knight Foundation announced the award of nearly $50 million in new funding to 11 U.S. universities to research how technology is transforming democracy. The foundation is also soliciting additional grant proposals to fund policy and legal research into the “rules, norms and governance” that should be applied to social media and technology companies.

Given all of the reasons not to engage with social media — the privacy issues, the slippery-slope addiction aspect of it, its role in spreading incivility — do we want to try to put the genie back in the bottle? Can we? Does social media definitely have a future?

“Yes, surely it does,” says Yildirim. “Social connections are fabrics of society. Just as the telegraph or telephone as an innovation of communication did not reduce social connectivity, online social networks did not either. If anything, it likely increased connectivity, or reduced the cost of communicating with others.”

It is thanks to online social networks that individuals likely have larger social networks, she says, and while many criticize the fact that we are in touch with large numbers of individuals in a superficial way, these light connections may nevertheless be contributing to our lives when it comes to economic and social outcomes — ranging from finding jobs to meeting new people.

“We are used to being in contact with more individuals, and it is easier to remain in contact with people we only met once. Giving up on this does not seem likely for humans,” she says. “The technology with which we keep in touch may change, may evolve, but we will have social connections and platforms which enable them. Facebook may be gone in 10 years, but there will be something else.”