Dividends and Instagram stuggles with fears of losing teens

All social media targets people to use their service and some become household names, but when a company is a household name it has to continually renew itself to keep the audience. In the case of teenage market, the service has to be cool and hip and catchy or teens will start to use another service.

In an article by Sheera Frenkel, Ryan Mac and Mike Isaac of the New York Times News Service, Facebook owns Instagram and the majority of its users are teenagers. This is very good for Facebook, but the task for Facebook is to keep teenagers, encourage young teens to use Instagram and then move its older people to its other platforms in order to keep advertising dollars flowing to Facebook company.

The market is Instagram has 1.3 billion users, TikTok has 1 billion users and Snapchat has 500 million users. For Facebook a marketing survey showed people who had left Instagram went to YouTube and TicTok before going to Snapchat.

During the pandemic the average person increased their time on social media to 3 to 4 hours a day compare to 1 to 2 hours a day. Adults typically spend 30 to 45 minutes.

Teens are an important segment to cater to because they spot and see trends and can spend more time on the site to be able to see more advertisements.

Linking to dividend paying stocks, the market is very competitive and every industry does similar things to try to attract and retain customers. When the large companies have sufficient size where 2 or 3 companies have 75% of the market, investors tend to be happy because they will attract and retain the bulk of the customers. The companies will fight for market share but investors, particularly dividend investors want consistency of recurring revenues to equal profits to translate to dividends.

There are more questions than answers, till the next time – to raising questions.

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