Facebook shares soared to all-time highs and Twitter's stock sank to new all-time lows in 2015. In the new year, social media will take on a bigger role than ever in consumers' lives, as these and other platforms look to weave themselves into everything that we do.
Here are a couple of predictions for 2016:
CEO Evan Spiegel must be carefully monitoring the public markets to figure out what it'll take to build on his private company's roughly $16 billion valuation. But all signs point to an IPO, probably in the second half of next year. The ephemeral messaging and content app is growing fast and has massive scale, with 100 million daily active users, and 6 billion daily video views in November, three times the number in May. The company has raised nearly $1.2 billion total, though a source told CNBC that Snapchat is burning through quite a bit of cash on a growing team and bandwidth.
The company's 2015 revenue, according to a source, will be about $70 million, with expectations of at least doubling next year. Snapchat generates revenue from ads and sponsored content and channels within its "Discover" and "Live" stories. It also offers brands custom lenses and "geofilters" to weave brands into the way users communicate and consume content across the app. (The company declined to comment.)
Spiegel has made some key hires — including a chief strategy officer from Wall Street, Imran Khan, a year ago, and in August a new finance chief from Mattel. That said, one of the biggest challenges to the company going public may be management turnover, as it's lost a number of top execs in the past year. Another uncertainty: questions about the ability to scale its ad format.
On the heels of Facebook announcing it will integrate Uber into its Messenger app, we can expect messaging apps to do far more than just text and make voice calls. Facebook will continue to make Messenger a more useful tool for its 700 million-plus users to take care of personal business. The company's likely to roll out its personal assistant test more widely, and look for more ways for its users to take care of all interactions with companies within the app — such as scheduling repair visits, tracking returns to retailers, monitoring delayed flights, or making restaurant reservations.
Meanwhile, Facebook's other messaging app, Whatsapp, which has shunned ads, will likely look for more ways to make money by giving brands a platform to communicate with customers as well.
We've seen Snapchat deepen its relationship with the NFL and Facebook work with publishers to bring articles directly to consumers with Instant Articles. Now we're sure to see that trend continue, as Facebook in particular pushes to get more content to get directly through its platform to consumers. In 2016 look for Facebook to work with more content creators and brands, and for content companies to pop up to create more custom-branded content to flow into the news feed. This will be part of a larger push to get consumers to watch and read within social apps — without having to leave Facebook, Instagram or Twitter.
This past year we've seen social platforms experiment with "buy" buttons — Facebook, Instagram, Twitter and Pinterest all have them. They're unlikely to have driven significant revenue this past holiday season, but we should expect all these platforms to roll them out widely in 2016. Next year may very well be the one that consumers get comfortable with inputting their credit card information into Facebook, Twitter, Instagram and Pinterest.
But perhaps the biggest potential lift for Facebook: It will ramp up the e-commerce services it offers small businesses, looking to be a one-stop shop for everything they need to interface with consumers. From customer service management through Messenger, to making Facebook pages an alternative to mobile websites, to offering them e-commerce services, Facebook will push for small and medium businesses to live online within Facebook, to make sure their customers, like their users, also never have a reason to leave.