YouTube Most Popular Social Media Platform Among U.S. Teens

The internet has evolved so much since it was first created. The internet's growth from a hub of research sharing to the vast interconnected network that exists today is simply mindboggling. None of its original developers could ever have imagined how far their project would come one day. Although the internet is still used for that original intention (sharing research), consumers use it for so much more today. They can go shopping or communicate or socialize or really do pretty much anything they want. The internet is such a dominant force in our society that many online companies can make plenty of money just by getting users to visit their sites. According to a Bloomberg article, one such popular site, YouTube, has become the most dominant social media site, at least in terms of users aged 13-17, the "trendsetting demographic."

These days, the money-making ability and success of a social media company are dependent on how many users it can attract. Even though most of those kinds of sites are free to use, they make money off of advertisements. A few years back, Facebook was well in the lead and was able to make the statement that 71% of teenagers in the United States actively used the site. Now, there isn't one single definitive leader when it comes to favorite social media sites for US teens. The three market leaders are now YouTube, Snapchat, and Instagram, while Facebook has only captured 51% of their possible teen market. YouTube is in the lead currently, with 85% of teens in the US using the site, according to a Pew Research study.

Even with a decrease in their capture rate of that ideal demographic,  Facebook still does very well for its shareholders. Facebook makes approximately $23 per user each quarter and has over 185 million users in the US and Canada alone. Those numbers could change pretty quickly in the future, though. Even now, the study found that only 10% of the respondents reported using Facebook as their main social media platform. Conversely, 33% said that Youtube and Snapchat are their top sites, and 15% said that Instagram is visited most often. Facebook's relatively recent acquisition of Instagram could be their saving grace.

Social media apps and plenty of other online platforms have had increased usage over recent years. This is likely because getting on the internet continues to become easier as technology becomes more and more advanced. Where a user once had to go to a physical desktop computer, the advent of portable computing made everything more accessible to so many people. From laptop computers to smartphones, users are now able to get online pretty much anywhere and anytime they want to. In fact, the Pew study found that 95% of teens either have a smartphone or have regular access to one. Also, 45% of teens say that they are online nearly constantly. That kind of ease of use is beneficial to the companies and consumers alike.

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TV Networks Looking to Cut Commercials in Exchange for Higher Viewership

People who watch television today, especially Millennials, have discovered that with improving technology come opportunities to make the viewing experience more enjoyable. It is a generally accepted fact that very few people actually enjoy commercials of any kind. Sure, some SuperBowl commercials stand out, but in general, commercials tend to be repetitive and boring, and simply get in the way of the TV program trying to be watched. According to Stephen Battaglio's L.A. Times article, more and more television customers are finding ways to avoid commercials in their daily viewing.

Streaming services like Netflix give consumers an alternative to normally scheduled broadcast television. They can watch all the TV shows and movies they want (albeit within a limited library of titles) without any commercial breaks for around $10 per month. TV ratings are continuously declining because even though television has the earliest airing time for many sought-after shows, if a viewer is willing to wait an extra day, they can watch the same episode without the annoying commercials and advertisements.

When digital recording devices became popular within the last decade, primetime shows had to change their strategy to engage the viewers who would simply watch later and fast-forward through any commercials. When remote controls were first invented, TV channels stopped having commercials in between different shows because they found that viewers were more likely to change channels during that transition. Especially as younger viewers adapt to new technology, networks will have to adjust accordingly if they don't want to lose an entire demographic for the foreseeable future.

In response to the changing viewership, networks are working on cutting down the amount of ad time to meet the expectations of their viewers. Many viewers want to see fewer ads, and if that doesn't happen, they'll just turn to alternatives like streaming. Some channels have up to 18 minutes of commercials per hour of television. Some have stated that they're looking to cut ad time by up to 50%. Others are working on other strategies, such as airing two long ads, one at the beginning and one at the end of a TV show, without a commercial break in the middle. Their hope is that viewers will be more attentive to ads if there are fewer of them. If those networks can convince advertisers that the reduction in clutter will improve their brand, then they may just be able to bring in the same amount of ad revenue even with less air time commited to commercials.

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Amazon Expects Advertising Revenue to Improve Profit Margin

Jeff Bezos, the CEO of Amazon Inc., recently took over the spot of "richest man in the world" from Bill Gates, the creator of Microsoft. To many, Bezos' wealth doesn't make much sense, because, for the past 20 years, Amazon has not brought in a profit. That may seem pretty cut and dry: profit means financial success. However, for Bezos, that's not exactly how it works. For many years, Bezos' financial strategy has been to choose business growth over profit, reinvesting any revenue into expanding Amazon. In that manner, Amazon's stock value has steadily gone up, even without paying any dividends to shareholders. According to an L.A. Times article by Spencer Soper and Mark Bergen, Amazon's latest shift, to focus on sources of advertising revenue, could help to push the company into profit territory.

Over the past few years, Amazon has been losing money in its e-commerce business but has been able to recoup those losses due to its profitable business of providing cloud services. However, the differences between gains and losses are tight: Amazon's average profit is only around 1%. Up until now, Amazon's advertising business has been pretty small, at $1.7 billion in revenue compared with Google's $35 or Facebook's $17.4 billion. Amazon has nowhere to go but up when it comes to advertising. It is likely that the growth will be among companies trying to get priority placement for their products on Amazon's website. That kind of business plan pivot is unlikely to have high costs and has huge potential for billions more in revenue.

Amazon is in a good place for advertisements. Often, on Google or Facebook, an advertisement appears that tries to push a user toward another site, where the user might purchase the product being advertised. The problem with that system is that users get annoyed by incessant advertisements when they aren't looking to buy anything. The difference for Amazon is that its users are already looking to buy something. Advertisements would be both helpful to the shopper, would benefit the advertiser, and would give Amazon more revenue. Everyone wins!

Food companies spend millions each year to put advertisements on television and in magazines to try to generate more interest in their products among potential customers. The same effect can be achieved on Amazon's website for far lower cost, with less work, simply by adding in suggested searches or sponsored search results. Of course, putting actual images and videos as advertisements can also help, but if someone is looking to buy a product, they're going to choose the one that seems to be at the best price. Through Amazon advertisements, companies can make their products more interesting to the average user. Perhaps one day, Amazon's advertisements could replace those on television entirely. Amazon does have its own video streaming capabilities, after all.

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