How Facebook Can Save Instagram (and itself)

Facebook is having it's Myspace moment. For the first time in history last quarter, it lost users. And now, it's having to do it's first layoffs in it's 18 year history. It's stock is down 60%. Sheryl Sandberg left, and Mark Zuckerberg is left at the helm, having to navigate Facebook's existential crisis.

Facebook's first bumps hit with the revelation's in 2018 of the massive amounts of data it collects on users and shared with other apps. That's allowed Facebook to build the trillion dollar market cap it hit in 2021. By monetizing it's user's data. It's not new for social networks or specific to Facebook. Google and TikTok have just as over-reaching data policies and advertisers are hungry for it, to best and most efficiently target their potential buyers.

But Facebook got hit with the revelations that it's ads likely used by malacious parties to affect U.S. (and likely foreign) elections. It then came out this year from a whistle-blower at Facebook that Facebook had done studies on it's app and user engagement and found that showing users clashing comments and opinions in their news feed was most likely to get them to re-engage with the app. So much for Facebook's mission of connecting the world.

Facebook as an app is dying. It's a hodge podge of features that have all been through into the fire to make sure that it doesn't die. But hardly anyone I know posts on Facebook anymore. For millenials and Gen Z, many don't even have Facebook accounts. I find myself unfollowing pages or individuals when I do go on Facebook or just using it to get my news. Facebook has launched Watch, Facebook Dating, Portal and other high profile efforts that have fallen flat.

In the process, they've been neglecting their crown jewel, Instagram. In 2018, three years after copying Snapchat's stories, Instagram hit over 1B users and looked unstoppable. That's changed.

Enter TikTok. TikTok's rise has been extraordinary. Bytedance launched TikTok in 2018 after buying Musical.ly and merging it with features from their highly successful Chinese version, Douyin. I remember downloading it in the fall of 2018. It was filled with videos of teenagers doing dances to memes. I saw right away it was going to be a monster success.

Gen Z has taken to TikTok faster than any new app or medium. Everyone has suddenly become a creator because everyone has a voice. I don't know the stats, but it seems almost as likely that someone using TikTok will create a video as they are to watch a video. A remarkable thing happened the other day. I commented on a video, and the creator commented back with a video. Gen Z's instinct is to broadcast and record through TikTok. I've watched countless video's of Gen Z TikTok users, casually record a video and have that video blow up. Suddenly, they're a creator.

TikTok took a fundamental feature of social media apps, the notion of "following" or "subscribing" to content and turned it on it's head. You opened the app to a never-ending feed of short-form videos. The algorithm instantly starts tracking what you like, watch, skip, search for and creates a custom feed for you. No doubt the algorithm takes in account tens of thousands of different factors, but it's truly remarkable. When I first started watching TikTok mainly for research for my influencer marketingn company, it was hard to put my phone down. Eventually, I forced myself to delete the app. Then the pandemic hit, and along with hundreds of millions of other people, I took to TikTok that had in it's year plus of growth, matured immensely. There was every type of content category imaginable on TikTok, and TikTok became THE source of memes.

Meanwhile, all this user growth and engagement came at a cost. That cost was Instagram. As TikTok has seen it's growth continue on an explosive track, Instagram has seen engagement plummet. In 2021, Instagram tried to fight back by launching it's TikTok competitor: Reels. But they did it all wrong. They launched Reels as a feature in Instagram. It was a confusing mess at first, but was a feature you had to click into to watch Reels. Then Instagram started messing with their algorithm to push Reels from people you didn't follow into your content feed. That's when all hell broke lose.

What's been made clear in the last 18 months, is that TikTok creators and Instagram creators are not the same. Instagram launching Reels within Instagram treats them as the same and that's Facebook's biggest mistake. Most of the Reels are just nice videos: sports, animals, landscapes, etc. Whereas TikTok's are narratives. People use Instagram and TikTok in different ways, and Facebook assumed you could just add in Reels and users would adapt their behavior. Instagram audiences are used to following creators and their friends, scrolling through the feed and stories. Instagram still does that well. But Reels is a misfit in the app. It feels exactly like what Facebook is trying to do: force you to engage with it. A Reel can pop up in your feed and if you try to interact with it, you're suddenly forced into a stream of Reels.

TikTok does have a major weakness. It doesn't pay it's creators. Facebook needs to do a 180 stat. Here's what Facebook can do:

1) Make Reels it's own app. Find and pay top TikTok creators to publish on the app. Pay smaller creators a decent CPM instead of the pennies TikTok pays it's creators.

2) Pay Instagram creators. Facebook has gotten away with not paying Instagram creators for as long as it's owned Instagram. It can't afford to do this anymore. TikTok just launched a photo feature, and there won't be much incentive left in a few months for creators to stay on Instagram.

3) Double down on features that work in Instagram. Users like Instagram (the old version). It was simple and easy to follow. People used it's messaging and stories heavily. Instagram had well over 1B active users. Instagram should be adding features to it's messaging so it becomes more of a default for messaging. Facebook has a conflicting goal of making Messenger their default, which no one wants. Instagram should add in the ability to make stories longer, stitch in other people's stories and have TikTok-like features in Stories.

Facebook and Instagram have instead tried to throw every feature into Instagram, making it a complete mess and alienating their users. It took a backlash from Instagram creators for Instagram to listen and stop fuckery with the Instagram feed and algorithm. Facebook sees what we don't. That Instagram is crashing. They don't share engagement numbers but a recent test showed that TikTok had 17x the engagement as Instagram. Facebook's behind in a race it might just have barely enough to catch up, but they need to take their blinders off and act.