Why Facebook Really Has To Care What Teens Think About It

Facebook swears teens still love it, despite an unguarded admission from its own Chief Financial Officer during a call to investors that there is some 'softness' in that demographic.

A lot of people would think, 'who cares?' teens dont have much money and are notoriously fickle.

The reality, however, is that advertising research suggests that attachments to brands are formed earlier rather than later in life. The concern among investors and marketers is that, as the following article explains, teens turned off to Facebook now may never return to it when they do have money as young adults, thus making the company a less reliable and efficient business platform. This might put it on a slower growth trajectory, rendering it less valuable as an investment.

This is an admittedly bleak scenario. It assumes that the company either does not recognize whatever the issues may be or is refusing to do anything about it, both of which appear to be both extremely self-defeating for a business attempting to position itself as a marketplace - and just plain wrong. The challenge the company now faces is two-fold: identifying and then fixing the source of the problem - and then convincing the rest of the world that it has done so. JL

Ryan Tate reports in Wired:

Facebook’s popularity with teens is important because young adult buyers are especially coveted by advertisers, and there’s a worry among some investors that if younger teenagers stop using the service in high school, they’ll use it less frequently in college, too. Fewer college users would mean less attention from 18- to 25-year-olds, who advertisers so want to reach. Less advertising to young people would turn Facebook from a growth machine into a slowing business for maturing people
The trouble is that the company’s attempts to quiet the story just draw more attention to it. The latest attempt came on Friday when Facebook chief operating officer Sheryl Sandberg said that Facebook’s challenges with some teens have been “blown out of proportion” and that “teen usage of Facebook remains stable.”

“The vast majority of U.S. teens are on Facebook,” Sandberg told All Things D. “And the majority of U.S. teens use Facebook almost every day. I feel like I’ve lived this before. When I was first at Facebook, just a few years in, adults were getting into Facebook in larger numbers and there were all those memes that popped up” about teens leaving.
Sandberg’s words came in the wake of a brief, but widely publicized, disclosure during Facebook’s last earnings call. Facebook’s chief financial officer David Ebersman preemptively warned of some weakness with the 13-to-19 set.
“We are pleased that we remain close to fully penetrated among teens in the U.S.,” Ebersman said. “Usage among U.S. teens overall was stable from Q2 to Q3, but we did see a decrease in daily users, specifically among younger teens.”
Despite record profit that sailed past Wall Street expectations, Facebook opened 6 percent lower the next day after the teen disclosure pummeled the stock in after-hours trading. Most people seemed to take Ebersman’s mildly worded warning as corporate speak for more severe issues (which it may have been). “Even Facebook admits [teens] are fleeing the service” was how the New Yorker put it.
That’s a fairly dire vision, but clearly, Facebook is concerned about the matter. Teenagers have gravitated toward alternative social networks, like the two-year-old photo-sharing startup Snapchat, to whom Facebook reportedly tendered a recent $3 billion acquisition offer. In and of itself, that doesn’t mean teens are abandoning Facebook, just that they want other ways to communicate online, particularly with one another.
Given how many parents and grandparents are watching over the average U.S. teen on Facebook, it’s eminently reasonable that they’d want to spend time in virtual clubhouses like Snapchat. The key, for Sandberg and company, is to keep them coming back to Facebook. That seems to be happening — on a monthly or quarterly basis. But if teens start taking longer vacations between sessions, Facebook may have a problem. That’s why it keeps saying the story isn’t true.