Why Facebook dominates in digital advertising
News provided by: Fox Business
Facebook’s user base is aging, but that isn’t hurting the social media giant when it comes to advertising.
The percentage of baby boomers and the silent generation using Facebook has increased by double digits since 2015, with 60 percent of boomers now saying they use the platform, according to a recent Pew Research Center poll. Adults age 50 and older are the platform’s fastest-growing user base.
Meanwhile, far fewer teens are using Facebook compared to millennials, and even compared to Gen Xers or boomers. Another Pew survey last year found that only 51 percent of U.S. teens said they used Facebook, and only 10 percent said it was the online platform they used most often. It trailed in popularity behind YouTube, Instagram and Snapchat.
The big-spending 18-34 demographic has long been the most sought after by advertisers and the media that cater to them. But that doesn’t matter to Facebook, which reported more than $16 million in advertising revenue last quarter. That was a 28 percent increase compared to a year before, despite changing demographics.
Facebook doesn’t need to rely on a “blunt instrument” like the 18-34 demo, according to Ken Doctor, a digital news industry analyst and the author of “Newsonomics: Twelve New Trends That Will Shape the News You Get.” The company can let advertisers target any demographic they want.
“They can optimize the value of any consumer of any age, any gender, any interest,” he said.
Part of Facebook’s success can be attributed to its recognition that its namesake platform is not its fastest-growing property. Instagram is the fastest-growing social media platform, though it still trails behind YouTube and Facebook, according to a Pew survey from earlier this year. Instagram says it has more than 1 billion monthly active users.
Facebook bought Instagram for $1 billion in 2012.
That means Facebook the company still has a way to sell ads to companies looking to target a younger audience, even if that audience isn’t using Facebook the app as heavily, according to Doctor.
“You’ve got to figure out what they’re using and how you start bringing them in,” he said.
That’s not all the social media giant has to offer. Facebook also owns its Messenger app, another messaging app WhatsApp and virtual reality headset maker Oculus. Between its properties, Facebook says it averages 2.1 billion daily active users.
Facebook and Google together account for 60 percent of digital ad spending in the U.S., eMarketer estimated earlier this year.
“By the very nature of what Facebook and Google do, they can isolate by interest, by age, by demography, by geography,” Doctor said.