I don’t like teenagers, in addition to making me feel old I don’t understand them. They speak something that approximates a recognizable language, listen to something that is a real stretch to call music, text too much, drive horribly, and often have bad skin. Beyond that I guess they’re okay. They are also a very important demographic for numerous business sectors, and this of course includes social media.
According to Piper Jaffray’s semi-annual teen survey, Facebook remains the most used social media by teenagers in the United States though Twitter is closing down this margin. 33% of teens surveyed rank Facebook Inc (NASDAQ:FB) as the most important social network followed by Twitter at 30%. However, just six months ago Piper Jaffray’s Fall 2012 survey showed Facebook at 42% and Twitter at 27%. On the podium with these two champions is Instagram 17% up from just 12% in the fall.
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“It is ultimately a long-term problem for Facebook Inc (NASDAQ:FB),” says Gene Munster, senior analyst at Piper Jaffray, before quickly pointing out to CNBC that Facebook does own Instagram and the two should be treated as a collective. If that is taken into effect, the two together lost 4% to Twitter since the Fall 2012 survey.
“Ultimately, near term there is still a big opportunity for Facebook Inc (NASDAQ:FB) to continue to add new ways to monetize the existing base; they’re under-monetized today,” says Munster. “This isn’t something you’re going to see in the numbers in the next couple quarters, but I’m sure if you’re Facebook and you’re looking at these trends, you’re probably taking notice and trying to figure out how you can navigate this brand amongst teens.”
Munster believes that Facebook Inc (NASDAQ:FB) is aware of the changing face of social media and have demonstrated a willingness to acquire companies rather than have their market share bled from them.
“The good news for Facebook Inc (NASDAQ:FB) is they realize that there are going to be some important, competitive companies like Instragram, and they’re probably going to have to pay up for them,” he says. “Ultimately, the reality of the business model in social is they’re going to continue to have to buy these kind of fast-moving competitors that are gaining share.”