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So you own a business. It is lucrative. It generates good money. It pays all kinds of costs and taxes with the realized revenue and leaves a decent amount of profit at the end of each fiscal year. It sees steady growth figures, strikes out from competition with one or more of its attributes and makes the shareholders’ pockets happy. So within this scenario, do you sleep peacefully at night? Think you are on the right path? With all these indicators, do you believe you are stepping on solid grounds? Attaining a sustainable business model? Well, think again! Because nothing is only ‘figure’ related anymore.
Living In The Age Of Impact Economy
We are literally living at times where the responsibility of a firm is way beyond generating profit for its shareholders. In fact, profit is just a portion of it. Today’s businesses are expected to provide positive outcomes also for the well-being of the society. It’s quite obvious that companies can no longer divorce themselves from the problems of the world. Be it global warming, the refugee matters, gender equality or pollution crisis. They are expected to take a stance, involve in action and do it in a way that is in line with their brand identity. This new attitude of doing business even has a name now. Welcome to the age of Impact Economy!
In a brief explanation impact economy is the way of conducting business where your operations are aiming to benefit the society and the environment alongside financial success. Looking through this lens, doing good for the society at large is considered as one of the keystones of the company. That said, the impact economy approach includes all parties’ involvement; the stakeholders, the customers, the suppliers, and the employees. It obviously is flourished within. It’s not something that you can outsource and attach to your company’s brand equity.
Brand Purpose At The Focal Point Of Change
Therefore it wouldn’t be an exaggeration to state that the weight of such a maneuver in the company falls on the shoulders of a brand. The brand should accept, internalize and reflect the purpose of its existence (hence the contribution to the impact economy). In fact, the purpose of a brand, the reason for its existence, should be carefully knitted into the brand equity itself. Otherwise, the brand would face the threat to be acknowledged as insincere, if not a hypocrite. And in an environment where the driving force of such change arises from the demand, the way you are perceived is everything!
According to a recent study by Accenture sixty-two percent of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices. Fifty-two percent believe that a brand stands for something bigger than just products or services it sells. Today mostly millennials expect companies to act in a purpose-driven manner, underlining just how important it is to start paddling this road for the sake of still being around in the far and near future. In fact, millennials also openly state that being purpose-driven on its own is a criteria they are considering when they apply for a job.
From Profits to Profitable Solutions
It may come as a surprise but when the 2000 year history of businesses is considered, downsizing the existence of a company to just making profits was a fairly new concept. During Roman times businesses were established to serve the public needs. This approach continued as is for hundreds of years and after the industrial revolution it got purely ‘adapted’ to modern times. It wasn’t until when Milton Friedman (the Nobel Prize-winning economist) explained the reason of existence of businesses in the 60s as, "there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game” that corporations fully internalized the profit only mindset.
Coming back to this day, a lot has changed since Freidman’s times. Over the 60 year period where the concept of brand, society, ecosystem and digital landscape has evolved in an enormous manner, one could argue the shift in Friedman’s statement stands out as follows: from “businesses are designed to increase profits” to "businesses are designed to increasing profitable solutions”.
To serve ‘the profitable solutions’ cause and encourage companies to move towards a more sustainable, ethical, involved, future-proof mindset many organizations have been established over the past decade. They are simply present to help. B-Corp and Blueprint are two examples of such. These organizations are guiding and evaluating corporations on a set of values and actions with the goal of establishing more profit- purpose balanced business schemes.
Now in an environment where money talks the loudest and profits still say the ‘last word’, this magnitude of change will not come easy to all corporations. But have no doubt that it’ll be coming keep coming in a steady manner. Just look at the increase in the amount of investments in purpose-driven companies during the last decade. That, on its own, is a solid enough indicator of where the change is heading towards. “Impact investing”, which describes investments that consider not only financial returns but also the effect those investments have on society-at-large has been growing exponentially. In short, it is seen bright as day that the corporations that will survive future’s natural selection test will be those who are ‘most purposely fit’ to make an impact.
Let’s face it. We all love that little heart shaped icon placed at the bottom left side of our posts. We love to see it bloom in red. If it were possible, we’d like it to be clicked more than once showcasing just how much other people enjoy our content. Well, all that love story is about to end.
Following the removal of the chronological feed, the most popular social platform is preparing to remove likes from the picture all together. In fact, Instagram's experiment of hiding the publicly seen like counts started back in May. The first location in testing was Canada. Disregarding all the negative reaction (online tears and anger outrage to be exact) caused, recently the trial has been expanded to seven countries. Australia, Brazil, Ireland, Italy, Japan and New Zealand was added in. It’s said that US and UK are next in line.
With the new flow, the only person allowed to see the number of likes on a post will be the poster herself; no one else. This means no followers, no closed loop of friends, and even more sadly no brands!
Instagram authorities have explained the decision with the following statement, “We want people to worry a little bit less about how many likes they’re getting on Instagram and spend a bit more time connecting with the people that they care about.” Well that sound’s like a good intention. Quality over quantity…
Knowing that people have literally died trying to pose for the most original selfies, witnessing how striking a pose at Chernobyl (where there is still a distinct amount of radiation) has been overly popular following the success of the mini series it is obviously hard to oppose this reasoning. Oh and remember the turquoise lake in Siberia? The one that has become a sparkling background for Instagram photos inspite of its toxic content? It drew so many people that the nearby coal plant operator had to issue a warning, “It's not a pristine oasis, it's a chemical dump". All in all, Instagram’s reasoning sounds caring. However, the statement is incomplete; and the remaining part of it is not at all linked to the well being of human psychology.
Over the years Instagram has proven to become one of the most game changing money generators; and certainly the most marketable one. It’s known that influencers may easily be paid tens of thousands of dollars per post. The ones who are crowned with the celebrity + influencer title can get even more ( Kylie Jenner reportedly gets paid $1 million per Instagram post on a brand. ). Now in a playground of this much juicy marketing communication, what does the hosting brand (Instagram) receive? Nothing! Instagram only serves as a platform connecting supply and demand angles of the marketing world. The transaction generates directly between the influencer and the brand, trespassing the enabler platform all together. Meanwhile, Instagram’s own ads don’t come close to the engagement level that’s seen on posts by influential users.
Therefore banning the likes is indeed a solution to cut the platform’s way into advertising revenue. It’s been proven with research that more likes makes the post more appealing. More likes boosts the self esteem of the poster. And in a world where followers can easily be bought, the real proof of the engagement (the power of the influencer) lies within the counts of that little heart.
So what’s happening (along with taking the users’ mental health into consideration) is crippling the influencers by burying their most powerful tool. This surely is a way to level the playing field between the platform and the influential users. A shift to increase brands’ appetite to work through Instagram if they want to showcase their products.
The recent future will show if this implementation will permanently be activated all around the world. If so, it wouldn’t be a surprise to see more and more people preferring to post videos over photos since videos do showcase counts per view. There’s no need of likes. In the end people will figure out and depend on other ways of showing how appreciated their content is. Only because the platform authorities have decided to ban the likes, users will not stop asking for it. The essence of these platforms are meant to be staged on social interaction. A two-sided social engagement. A pattern where ‘to see’ and ‘to be seen’ works hand in hand. That is exactly why the opportunity Instagram is seeking may easily become a threat. The platform may end up devaluating its core competence, wearing away its appeal and in the long run losing its brand essence.
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