Research firm eMarketer has warned that there is a risk that Facebook Inc. (NASDAQ:FB) could lose the grip it has on teenagers in the United States to rival Snap Inc. (NYSE:SNAP). Analysts at the research firm have predicted that the biggest social network in the world will see a decline in the level of usage in this demographic.
According to eMarketer, the use of Facebook by Americans ranging in age between 12 years and 17 years will decline by 3.4% to reach a figure of 14.5 million this year. This is lower than the 15.8 million teenagers who are on Snapchat.
Daily Ad Reach
The disappearing-message app which went public earlier in the year has also overtaken Facebook with regards to users aged between 13 and 24 years based on a metric employed by advertisers when allocating advertising budgets. The daily ad reach of Facebook lay between 25 million and 26 million while that of Snapchat is over 26 million. Though the gap between the two is small, the ability of Snapchat to reach more users aged between 13 and 24 years on a daily basis is a plus for advertisers conducting flash sales such as retailers and movie studios.
The eMarketer report suggests that despite Facebook having copied some of the features on Snapchat such as Stories and selfie masks, the loyalty of young users to the disappearing-message platform has not waned. Earlier this month, Snap revealed that the amount of time spent on the app by users aged below 25 increased by 33% compared to half a year ago.
"The good news [for Snap] is that Snapchat is continuing to grow. The bad news is that Facebook is very large and powerful, so Snapchat is still going to exist somewhat in their shadow," said an eMarketer analyst, Debra Aho Williamson.
Facebook's saving grace in the face of Snapchat's popularity among teenagers is Instagram which it owns. While Snapchat boasts of over 24 million users aged between 18 and 24 years Instagram is a close second with 22.1 million users in this age group.
On Monday shares of Facebook Inc. increased by 0.22% to close at $167.78.
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Posted: 2017-08-24 @ 6:32pm PT
Overall, snapchat is still struggling. They should have sold to Google when they had the chance.