Facebook: in with the old and out with the new?
Social media is often described as a playground for the youthful. A new report from research firm eMarketer casts doubt on that, however, saying that Facebook is losing younger users and adding them in the over-55 category. The report claims that 2.2 million people between the ages of 12 and 17 will use Facebook in 2018, and 4.5 million between 18 and 24. This is 700,000 fewer than used the network in 2017. Meanwhile, a surge in over-55s online will see them become the second largest demographic on the platform this year.
Facebook’s share price is up by 30% over the previous year
SOURCE: Yahoo Finance
Bill Fisher, UK senior analyst for eMarketer, said: “Facebook has a teen problem. This latest forecast indicates that it is more than just a theory. Until now it has been able to rely on platform shifters being hoovered up by Instagram. However, leading the charge for younger audiences is Snapchat. There are now some early signs that younger social network users are being swayed by Snapchat.”
Richard Broughton, an analyst at Ampere, said: “There are a couple of factors at play here. One is that older people tend to be late to the internet party, but adoption tends to find its way through the demographics eventually. And with Facebook’s video and photo experience it is a platform they want to be on to keep up with the social lives of their kids and grandchildren.”
Ironically, it is Facebook’s success at attracting parents and grandparents that is probably to blame for teens giving it the cold shoulder. On the one hand, you can’t refuse a “friend request” from your gran – but on the other, you don’t necessarily want her to see photos of you partying.
There are a few reasons investors should refrain from worrying, though. The first is that this report refers to the UK – and while it may be noting a worldwide phenomenon, that remains to be seen.
The second is that Facebook is overwhelmingly more popular amongst all demographics than its rivals: in the UK, where the study took place, Facebook is more than twice as large as any of its competitors. Add Instagram, and it’s more than three times as large.
And the third is that Mark Zuckerberg is on the case: recent promises to change up the way the Newsfeed works means that trends being seen on Facebook now may be subject to change in the (very near) future.
Dominion holds Facebook in its Global Trends Managed fund.
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