Young Users Prefer Facebook to TV

by Alyssa Oursler | July 31, 2013 2:59 pm

Young Users Prefer Facebook to TV

To put it simply: This has been a good couple of days for Facebook (FB[1]).

After a tumultuous year, Facebook — despite looking like it will actually finish 2% in the red — by hitting its $38 IPO price, representing a nearly 45% gain since its blowout earnings report[2].

And for the cherry on top, a new study about the site’s user base shows even more promise for the back-on-track social media stock.

According to Bloomberg[3], Nielsen just released its first major study comparing Facebook’s user base with a TV audience. The results: More young viewers “tune in” to the site during prime time than they do the four major networks.

Overall, 50% of 18- to 24-year-olds will access Facebook between 8 and 11 p.m. on weeknights, while the networks only attracted between 37% and 43%.

This flies in the face of the idea that Facebook is no longer cool or that users are switching to new social media sites — arguments that were especially popular when the stock was beaten down.

Instead, MyLife.com CEO Jeff Tinsley — who I interviewed earlier this month[4] — seemed to be right on the money when he talking about social media’s staying power. He expressed that users love Facebook, despite their complaints, and that they will continue using it in conjunction with other social media platforms.

Quartz’s Simone Foxman[5] expressed a similar idea way back in January when she asserted that Facebook’s struggling stock was a “goldmine in the making.” Foxman pointed to the fact young users like herself consider the site the “basis of their social life.”

This Nielsen data confirms that loyalty to a large extent, and also illustrates a broader shift in media consumption. Users no longer gather around to watch their favorite shows during prime time. Instead, they often consume when they want and where they want via streaming services, and are more-than-likely multitasking as they do it.

Still, if “prime time” isn’t as valuable as it once was, Facebook — whose audience also is greater than large networks during the day — might be the best available platform for advertisers … even if FB users aren’t the widely captive audience TV advertisers are used to.

Most importantly, this reality could go straight to the bottom line. Already, the company is planning to offer TV-style ads[6] in its news feeds — 15-second spots targeted by age and gender, and expected to go for as much as $2.5 million a day.

As Bloomberg reporter Edmund Lee aptly summed it up, the company is looking to “capitalize on the millions of users who actively check the site on a daily basis” and is “seeking to break the long-held dominance of television over advertising budgets.”

If it’s successful, InvestorPlace Editor Jeff Reeves might be right: The stock’s quick visit to $38 could be just the beginning[7].

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

Endnotes:
  1. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  2. blowout earnings report: http://investorplace.com/2013/07/facebook-earnings/
  3. According to Bloomberg: http://www.bloomberg.com/news/2013-07-31/facebook-draws-more-young-prime-time-viewers-than-major-networks.html
  4. I interviewed earlier this month: http://investorplace.com/2013/07/audio-facebook-is-here-to-stay/
  5. Quartz’s Simone Foxman: http://qz.com/49567/facebook-is-a-goldmine-in-the-making/
  6. planning to offer TV-style ads: http://www.bloomberg.com/news/2013-07-30/facebook-said-to-plan-to-sell-tv-style-ads-for-2-5m-each.html
  7. could be just the beginning: http://slant.investorplace.com/2013/07/facebook-stock-38-nasdaq-fb-ipo-znga/

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