As 2014 began, questions swirled around Facebook as it appeared young folks were fleeing the social network. Now with the end of the year close at hand, has that trend continued? Reaching an ever-elusive audience of the young and the mobile is becoming increasingly important to marketers as up-and-coming digital generations begin to put their money where their mouth is and spend online. The question all marketers must grapple with is where and how to best reach these digital natives.
A Valuable Audience
It will come as no surprise that Millennials or Gen Y and the younger Gen Z spend a significant amount of their time online. Now with a new report out this past October from Business Insider, we see evidence that time is not the only thing they’re spending online — they actually spend a higher percentage of their dollars on online purchases. Though this may seem like a no-brainer, it’s nevertheless an important trend to watch. We can see that Gen Z spends almost twice as much money, as a percentage, even than Gen Y. And while that trend may have a lot to do with how much smaller these demos’ overall pie of dollars is, it’s still evidence that reaching this audience is important and that doing so successfully can pay off for marketers. As these generations age and begin to earn more dollars, the spending patterns are likely to harden and set.
Again from Business Insider:
Despite having relatively low incomes, Millennials…are spending more money online in a given year than any other age group. They spend around $2,000 annually on e-commerce.
Despite having ultra-low incomes, Generation Z…spends the highest share of their income online: 9 percent.
Marketers know full well the importance of reaching this massive global demographic, but the question is, can Facebook deliver? There’s been much talk during this past year about how the kids are abandoning Facebook. It’s said that since Facebook is now a social network that kids must share with their parents, that they no longer think it’s cool. But is this true?
Are Kids Leaving Facebook?
Well, to a certain extent the answer is yes. Facebook reported back in late 2013 a quarter-to-quarter dip in daily use by U.S. teens. But essentially Facebook is a victim of its own success, as eMarketer points out, “A brand is in a tricky position when it has no place to go but down.” Given Facebook’s dominant position of 95.9 percent as a social network for kids ages 12 to 17, it’s only natural that they will find other ways to express themselves — they’re young explorers off experimenting with who they are, what their online persona is, and how they can reach their friends through more simple and direct means. These days most kids I know start off their social lives with an Instagram account. They may only be 10 or 11, not yet of age for Facebook, and so habits begin.
Just look at the comparison of Millennial usage between Instagram, which is a much more direct, more focused type of photo sharing, vs. Facebook, which supports multifaceted sharing. While you can share photos almost as easily on Facebook, there are so many ways to share, and so many more people to share with that it may be inhibiting compared to the quick, visceral sharing on platforms like Instagram.
So we can say that most likely kids are not abandoning Facebook irrevocably, they’re just time-sharing on more compelling social application types — messenger, video, and photo (according to GlobalWebIndex). But if Snapchat, Vine, and Instagram are in, does that mean Facebook is out? According to the latest Cassandra report, 52 percent of kids actually say Facebook is cool and 60 percent use it with frequency. So while, in my book, 52 percent is not exactly a ringing endorsement, Facebook still beats out Instagram, Twitter, Pinterest, Snapchat, and Tumblr for the cool factor. But here’s something that really stands about young people’s relationship to Facebook, according to the latest from Cassandra:
“Nearly half [of young people] prefer that brands communicate with them on Facebook — over YouTube, Twitter, Instagram, Pinterest, and Tumblr. As they use Facebook more often than other platforms, it’s only fitting they want brands to reach them this way.”
It’s the Message, Not the Medium
While each social medium has particular strengths and weaknesses for marketers, when asked, the young don’t just want to see content, but rather, according to Cassandra, brands “need to provide value, relevancy, and interactivity.” While their parents are slightly put off by advertising in social media feeds, younger folks are not reflexively negative – it’s normal to them and what they want is a value exchange, something that provides them with currency, or, at least, makes them laugh.
Facebook is pulling all the right levers in honing up their ad serving business by shifting dollars into their mobile business. According to eMarketer, “In Q3 2014, mobile accounted for 62.0 percent of Facebook ads served on the source’s platform worldwide.” As Facebook continues its push into mobile, there’s a larger juggernaut at play called Atlas. According to Ad Age, Facebook will offer a demand-side platform (DSP) that will allow advertisers to leverage the vast knowledge about its customers, “[Facebook] is converting its user data into a sort of Rosetta Stone that can bridge the divide between desktop and mobile as well as assure advertisers that their ads were shown to the intended audience.” Again according to Ad Age, “Facebook has rebuilt Atlas so that it can customize an ad’s creative including so-called “native” ad placements based on Facebook user data like age and gender, as well as advertisers’ customer data that can be matched with Facebook users through Custom Audiences.”
If advertisers can use Facebook’s unmatched reach and knowledge of its users and apply look-alike modeling to buy ads outside of Facebook, that is very powerful. And with Facebook offering a tool to adjust and personalize ads to make them more relevant to customers has the potential to give advertisers unmatched ability to reach young people with the right message, at the right time, in the right place (according to where they are on mobile).
As 2014 began the question being bandied about was, was Facebook losing its status among Gen Y and Gen Z, but as the year winds up, we see an ever increasing amount of evidence that shows Facebook firing on all cylinders both in its relevance to young people’s lives and its ability to offer powerful tools to marketers.
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