Fashion's Instagram Exodus Begins
Meta is slipping. Fashion won't stick around.
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Good news: Mark Zuckerberg is having a bad week, and I’ll discuss that. Bad news: I also need to discuss the “metaverse,” specifically fashion’s place in it, but I promise it will go down easy here in Back Row, just like that upsetting Balenciaga bag. And in a few years we’ll probably never have to talk about Zuckerberg and the metaverse together again because, if it indeed manifests as our digital future, he’s definitely not going to be the one to mastermind it.
But first, a lot of people are pretty delighted by the terrible earnings Meta announced this week, which sent its stock plunging by 26.4 percent, wiping out more than $230 billion of its value. This reduced Zuckerberg’s personal wealth by almost $30 billion. (At a company-wide meeting Thursday, he blamed his red eyes and tears not on those numbers but rather, Bloomberg reported, a “scratched cornea.”)
Meta’s performance is hugely significant for the fashion industry, which has been enmeshed with Instagram for around a decade. Yet fashion is poised to make an exodus from the platform, and when that happens I don’t think any of us will miss it. Before this week, I thought this would unfold gradually over the course of years. But now it feels like brands and influencers have been granted permission to flee a sinking ship at once. This will happen one of two ways: brands and influencers will leave their accounts up, but start tending to them like a succulent — provide occasional, half-hearted watering and that’s it. Others will leave it behind entirely.
You could arguably date Instagram’s vice grip on fashion to ex-Lucky editor-in-chief Eva Chen’s hire as director of fashion partnerships in 2015, three years after Facebook bought it. With one of its own at the company, the notoriously tech-averse fashion industry (one that to this day communicates via fax) embraced it, labels coming to rely on its influencers and in-app shopping product for promotion and sales. Before the rise of TikTok, I don’t know how you would have launched or promoted a fashion label without investing money in Instagram.
The problem is that Apple now forces apps like Facebook and Instagram to ask users to consent to being tracked. Most of us say no, weakening the company’s ability to effectively target ads to us. From the Wall Street Journal:
Chief Financial Officer David Wehner on Wednesday said the company expects the Apple policy to cost it more than $10 billion in lost sales for 2022, equivalent to about 8% of its total revenue last year.
“It’s a pretty significant headwind,” Mr. Wehner said on a call with analysts.
The company was also forced to admit in its report this week that TikTok is a threat unlike any it has ever seen. Though Meta touted Reels as its fastest growing content type, research shows that younger users prefer TikTok, which was the most downloaded app of 2021.
When Snapchat posed a similar threat years ago, Facebook copied it by introducing its own Stories product. That was pretty effective because a lot of people in their twenties and thirties never wanted to bother with Snapchat much anyway. Disappearing photos weren’t that innovative, and the app never possessed the entertainment value of TikTok.
Now, Meta has attempted to copy TikTok with Reels, a video product introduced in August 2020, but that has been less effective than Stories for a number of reasons. One, it’s easier to make a great TikTok, which has better technology, than a great Reel. Two, Instagram is either refusing to provide — or technologically incapable of providing — users with the same reach that TikTok does. It seems to be attempting to force us all to buy impressions, but there’s no point in doing that when someone with fewer than ten TikTok followers can simply tap over to TikTok and have a chance at creating a video that gets a million views. Three — and this is purely my experience — Reels aren’t that entertaining. Most of the Reels I get are hammocks swaying on a beach or a view from a train in the Swiss Alps — dated influencer content, but in motion.
Let’s also be clear about the reason Reels is Meta’s fastest growing content type: that’s what the company deigns to surface in our feeds. Since it abolished Instagram’s beloved reverse chronological feed in 2016, what we see on Instagram has been controlled by a mysterious algorithm decided upon by Meta, and poorly explained to users. The company forces us to make Reels by making the reach on that content much higher than static images. This morning, when I opened Instagram, all I saw in my feed were Reels.
But people in fashion and beyond are tired of doing battle with Facebook’s algorithms. BuzzFeed recently published a feature about how Instagram influencers, like Jess Ann Kirby, are leaving entirely.
“My stats have been stagnant for years now, no matter what I do,” she said. “A lot of people who wanted to do it honestly and didn't do these giveaways or buy followers, it was kind of like Instagram made it so the game was not fair anymore, like you had to kind of cheat to get ahead.”
Over the past few years, Kirby said, her success on Instagram has seemed to be tied to the amount of time she’s spent on the app. According to Kirby, the more time she was active on Instagram — sharing content and engaging with her followers — the better her Instagram analytics for engagement became and the more people saw her posts. If she took breaks from the app or didn’t post for a while, she said her numbers would drop.
“It's not like this is just in my head, I mean, I've literally seen this happen in my analytics… If I'm not on the app all the time, my content doesn't get seen,” she said.
People like Kirby are so frustrated by Instagram that they’re willing to take a revenue hit while they build up their businesses through other channels. I’ve heard from several influencers recently that TikTok deals are surprisingly lucrative even for those with modest followings. Andre Brown (@mrpresidentstiktok) posts to both instagram and TikTok, and told the Wall Street Journal that he earns 85 percent of his revenue from TikTok sponsorships.
The other problem for Meta is that Zuckerberg has bet the company’s future on the metaverse. The metaverse is a video game-like world of virtual reality, where we could all hang out and mingle. Our avatars will need virtual clothes, and fashion companies could profit nicely from those. Zuckerberg would surely like Meta to be the company that facilitates that marketplace.
However, fashion hasn’t bought into that future. LVMH chief executive Bernard Arnault isn’t counting on the metaverse. “[W]e have to sound a note of caution,” he said during last week’s earnings call. From CNBC:
“At this stage, we are very much in the real world, selling real products,” he said. “We are not interested in selling virtual sneakers for 10 euros. We’re not into that.”
Arnault also warned of potentially speculative bubbles that have little lasting commercial value similar to many of the companies and promises of the dot-com bubble.
“We have to be wary of bubbles,” he said. “At the beginning of the internet, there were all sorts of things popping up and then the bubble burst. There may be relevant applications, but we have to see what universes might actually be profitable.”
I have a hard time imagining the fashion industry embracing the metaverse. This is a social industry, one that still partakes in international travel upwards of four times a year for fashion weeks that honestly don’t need to happen in person in 2022. But they do because fashion people enjoy being in one another’s presence, beholding real items of clothing.
Zuckerberg isn’t the only tech executive putting a stake in virtual reality. Microsoft recently acquired video game company Activision Blizzard for $75 billion. I might put my money on Microsoft as the future’s big metaverse company, if that ends up being our future, simply because Facebook hasn’t been innovative since it launched its core product when I was in college in the aughts. It’s simply made up for a lack of innovation through acquisitions — of WhatsApp, Instagram, etc. — and knocking off other platforms’ products. But with its size under scrutiny of federal officials, it’s now too big to buy its way out of its slide into irrelevancy.
Meta could look to fashion media, which it’s effectively ruined, for a glimpse at its future. Brands had no problem leaving magazines behind — an idea that once seemed unthinkable. They will have no problem leaving Instagram behind, too.
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