In social media platforms and their economies, content and engagement serve as 'currency’. Akin to some traditional currencies, they are experiencing inflation.

In the vibrant social media ecosystem, content and engagement—likes, comments, shares, and follows—operate as the primary ‘currency’, buying visibility and influence and driving the success of influencers, brands, and content creators. This digital economy, underpinned by the scarce resource of user attention, resembles traditional economies in many ways. And just like some traditional economies, legacy social media platforms have been experiencing a unique form of inflation characterized by an oversupply of content and engagement that paradoxically diminished their value, akin to traditional economic inflation, where an excess of currency reduces purchasing power.

More Currency, Less Value

As social media platforms have matured, the volume of content and the corresponding engagement metrics have surged. Twitter’s users generated about 5,000 daily tweets in 2007, while they produce over 500 million today. In 2024, Instagram users upload over 100 million photos and videos daily, and over 1 billion stories are shared daily across Facebook apps. As noted by Facebook itself, already in 2014 an average Facebook user sees up to 1,500 stories in their News Feed per login, which can skyrocket to 15,000 for those with extensive networks. Yet, despite the increase in this 'currency' (or because of that), the engagement rate and reach for most content creators, especially those in the middle and long tail of the distribution, have experienced a decline. Studies, such as one by Edgerank Checker, had shown that the average Facebook Page's organic reach dramatically decreased from approximately 100% of followers in 2007 when they launched to 16% in 2012 to 6% in 2016. In 2024, the average engagement rate per page on Facebook is just around 0.07% (Facebook photo posts have the highest engagement at 0.12%, while Facebook link posts have the lowest at 0.03%).

This phenomenon reflects a saturated market where the value of each engagement unit decreases, making it harder for content to stand out and achieve significant reach without substantial investment in paid promotion. Much like how an increased money supply with an unchanged goods supply reduces the value of money and lowers the purchasing power. Despite having more units of currency, citizens are impoverished. Notably, nowadays, it takes many more posts, likes, comments, etc., to obtain reach and gain visibility and the consequent benefits on social media. For someone just starting on a legacy platform, accumulating enough social currency to ‘buy’ visibility and influence is a daunting mission, not dissimilar to young adults struggling to purchase homes in the real-world economy. Only established and early influencers, akin to financially secure households, can stand a chance to preserve their purchasing power and navigate this inflating economy.