Social Media Giants Earns $11b in US Advertising Revenue Targeting Minors In The Past Year

(CTN News) – A recent study from the Harvard T.H. Chan School of Public Health, published on Wednesday, reveals that social media companies collectively generated over US$11 billion in advertising revenue from minors in the previous year.

The research underscores the necessity for governmental oversight of social media, asserting that companies, which profit from the engagement of children on their platforms, have inadequately self-regulated.

The researchers advocate for regulatory measures and increased transparency within the tech industry.

They contend that such interventions could mitigate the adverse impact on youth mental health and curb potentially harmful advertising tactics aimed at children and adolescents.

The revenue estimate was derived by calculating the number of users under 18 on major platforms such as Facebook, Instagram, Snapchat, TikTok, X (formerly Twitter), and YouTube in 2022.

This estimation was based on demographic information from the US Census, as well as survey data from Common Sense Media and Pew Research.

Assessing Social Media’s Impact on Children:

The researchers employed data from research firm eMarketer (now known as Insider Intelligence) and Qustodio, a parental control app, to estimate the US advertising revenue for each platform in 2022.

They also utilized information on the amount of time children spent daily on each platform. Using this data, the researchers constructed a simulation model to estimate the ad revenue generated by these platforms from minors in the United States.

Growing Concerns and Legislative Responses

Concerns about the detrimental effects of social media platforms on children, exacerbated by personalized algorithms that encourage excessive use, have been a focus of both researchers and lawmakers.

In response, states like New York and Utah have introduced or passed legislation aiming to restrict social media use among children, citing concerns about youth mental health and related issues.

Legal Challenges and Meta’s Role

Meta, the company that owns Instagram and Facebook, is currently facing lawsuits from numerous states, alleging its contribution to the mental health crisis.

Bryn Austin, a professor in the Department of Social and Behavioral Sciences at Harvard and a senior author of the study, emphasized that despite claims from social media platforms about self-regulation, the study suggests they have not taken sufficient steps to protect children, highlighting strong financial incentives to delay meaningful action.

Lack of Transparency in Advertising Revenue

It’s worth noting that these platforms do not publicly disclose the specific amounts of money they earn from minors.

Social Media Platforms and Ad Revenue from Children

Social media platforms aren’t the pioneers in advertising to children, and concerns about marketing to kids have existed in various forms, from online and television ads to promotional efforts within schools.

However, online advertising poses unique challenges, as it can be specifically targeted towards children, and the boundary between ads and the content sought by kids is often unclear.

In a 2020 policy paper, the American Academy of Pediatrics highlighted that children are particularly susceptible to the persuasive impact of advertising due to their underdeveloped critical thinking skills and impulse control.

The paper noted that while school-aged children and teenagers may recognize advertising, they often struggle to resist it, especially when it is integrated into trusted social networks, promoted by celebrity influencers, or presented alongside personalized content.

As concerns about the impact of social media on children’s mental health continue to rise, the Federal Trade Commission recently proposed significant changes to a long-standing law governing how online companies can track and advertise to children.

The suggested changes include defaulting to turning off targeted ads for children under 13 and restricting push notifications.

According to the Harvard study, YouTube generated the highest ad revenue from users aged 12 and under, amounting to US$959.1 million, followed by Instagram (US$801.1 million) and Facebook (US$137.2 million).

For users aged 13-17, Instagram led in ad revenue at US$4 billion, followed by TikTok (US$2 billion) and YouTube (US$1.2 billion).

The researchers also estimated that Snapchat derived the largest portion of its overall 2022 ad revenue from users under 18 (41%), followed by TikTok (35%), YouTube (27%), and Instagram (16%).