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Underage Users Helped Social Media Giants Mint $11 Billion in Ad Revenue; But at What Cost?

Snapchat emerged as the leader in earnings from users under 18 in 2022, constituting a significant 41% of its total income.

BY VALLARI VAIDYA

PUBLISHED JAN 7, 2024

Image Source: Photo by Magnus Mueller | Pexels

A group of researchers recently investigated how much money popular social media platforms such as Facebook, Instagram, Snapchat, TikTok, Twitter (now X), and YouTube earned from ads targeting young people in the United States. Surprisingly, the total amount in 2022 turned out to be a whopping $11 billion, per the Harvard study. This is the first effort undertaken to determine the number of youngsters using these platforms and calculate the money made from ads targeted at them.

Image Source: Photo by Agung Pandit Wiguna | Pexels — School children looking at a laptop screen (representational photo) | Photo by Agung Pandit Wiguna | Pexels

How did the researchers conduct this study?

To come up with these numbers, the researchers used information from the US Census as well as survey data from Common Sense Media and Pew Research. This helped them estimate the number of users under 18 on these platforms across the country. Moreover, they gathered data from eMarketer and Qustodio which provided estimates for the expected ad revenue for each platform in 2022 along with the average time young users spent on each platform every day.

After gathering these estimates, the researchers created a simulation model to figure out how much money these social media platforms earned from advertising that targeted young users. The estimated number of users under 18 on these platforms were as follows: YouTube – 49.7 million, TikTok – 18.9 million, Snapchat – 18 million, Instagram – 16.7 million, Facebook – 9.9 million, and X (Twitter) – 7 million.

Image Source: Photo by Andrea Piacquadio | Pexels — Little girl engrossed in a phone | Photo by Andrea Piacquadio | Pexels

According to the information shared on Eurekalert, the platforms raked in a total of $2.1 billion from users aged 12 and under, and a substantial $8.6 billion from users aged 13 to 17.

YouTube led the pack in earnings from ads targeting users aged 12 and under, making an impressive $959.1 million. Following closely, Instagram earned $801.1 million, and Facebook brought in $137.2 million. For users aged 13 to 17, Instagram took the lead again, making a substantial $4 billion from ads. TikTok followed with $2 billion, and YouTube secured the third spot with $1.2 billion.

When we examine the overall ad revenue for the year 2022, Snapchat emerged as the leader in earnings from users under 18, constituting a significant 41% of its total income. TikTok followed closely with 35%, YouTube with 27%, and Instagram with 16%.

Importance of government regulations

The researchers highlight the importance of government intervention in regulating social media platforms. They express concerns that these platforms may not be adequately regulating themselves, and this lack of oversight could potentially have adverse effects on the mental health of young users. Policymakers are increasingly considering legislation to control practices on social media platforms that may contribute to issues like depression, anxiety, and disordered eating in young people.

Image Source: Photo by Julia M Cameron | Pexels — Teenage boy looking at a tablet | Photo by Julia M Cameron | Pexels

The negative impacts of social media on youth include cyberbullying, inappropriate behavior, addiction, online predators, and mental health issues. These are risks faced by both underage individuals and adults on social media platforms. Government regulation aims to establish rules that protect users from harmful content and misinformation.

In recent news, Instagram and its parent company, Meta, are currently under legal scrutiny as attorneys general from 33 states in the US have filed a complaint. The accusation is that the company intentionally designed its platforms, including Instagram, to be addictive for children. The complaint asserts that Meta was aware of underage users holding accounts and knowingly maintained a significant number of underage users as what can be described as an "open secret." The lawsuit discloses that Meta received millions of complaints regarding underage users on Instagram but only took action to deactivate a small fraction of those accounts.

The study's findings indicate that these platforms have strong financial incentives to delay implementing meaningful measures to protect children.