TradeEdge Exchange:Social media companies made $11 billion in ad revenue from kids and teens, study finds

Social media companies made nearly $11 billion in advertising revenue from U.S.-based minors in 2022,TradeEdge Exchange according to a study released Wednesday led by the Harvard T.H. Chan School of Public Health.

Researchers said the findings illustrated how social media giants significantly profit from child and teen users. They emphasized the need for “greater transparency and regulation” to protect young people’s mental health. 

“Although social media platforms may claim that they can self-regulate their practices to reduce the harms to young people, they have yet to do so, and our study suggests they have overwhelming financial incentives to continue to delay taking meaningful steps to protect children,” said Bryn Austin, an author of the study and professor in the social and behavioral sciences department.

Researchers estimated the number of users under 18 years old and subsequent advertising revenue from Facebook, Instagram, Snapchat, TikTok, X (formerly Twitter) and YouTube from public survey and market research data. They noted social media platforms’ reluctance to share data with researchers and journalists has been “well-documented.”

The study's findings come as social media use among young people has swelled and become a hot button issue across the nation, including on Capitol Hill and presidential debate stages. The U.S. surgeon general issued an advisory in May about young people’s mental health and social media use. There has been a bipartisan push in a polarized Congress aimed at regulating technology companies.

Study findings

Researchers estimated the number of youth users and related ad revenue for Facebook, Instagram, Snapchat, TikTok, X (formerly Twitter) and YouTube using survey data from Common Sense Media and Pew Research, along with data from market research company eMarketer, parental-control app Qustodio, and population data from the U.S. Census Bureau.

YouTube led in revenue derived from users aged 12 and younger at $959 million, the study estimated, followed by Instagram at $801 million and Facebook at $137 million. Instagram led in ad revenue gained from teen users aged 13-17 at $4 billion, followed by TikTok at $2 billion and YouTube at $1.2 billion.

The study compared how long people spent on social media apps and found young users spend the most time on TikTok at 99 minutes a day, with Snapchat trailing at 84 minutes. Adults spent the most time on TikTok and YouTube at about 46 minutes. 

A Gallup survey earlier this year found the average U.S. teenager spends 4.8 hours a day on social media. 

Roughly 41% of Snapchat’s overall 2022 ad revenue came from users under 18, the Harvard-led study estimated, followed by TikTok, YouTube and Instagram. Facebook and Twitter collected only about 2% of their annual ad revenue from minors. 

Google, YouTube’s parent company, did not comment on the study when reached by USA TODAY but listed policies related to young people’s safety and mental health on the platform. The company said it disabled ad targeting based on age, gender or interests of people under 18 across Google. People must be at least 13 years old to use YouTube, or a parent or legal guardian must enable it. The company also created YouTube Kids for children under 13, which had “strict advertising guidelines,” Google told USA TODAY.

Snapchat, X, TikTok and Meta did not immediately respond to USA TODAY’s requests for comment.

Social media apps use targeted ads

The study said social media companies are “highly incentivized” to keep young people online as they profit from ad revenue. Platforms use “highly personalized computational advertising to match users’ specific demographics and usage patterns with advertisers’ financial interests," researchers wrote.

They also raised concerns about the amount of data collected for targeted ads, saying regulatory agencies do not hold the companies “sufficiently accountable,” and platforms are not required to report ad revenue or age breakdown of users.

“Our finding that social media platforms generate substantial advertising revenue from youth highlights the need for greater data transparency as well as public health interventions and government regulations,” said author Amanda Raffoul, instructor in pediatrics at Harvard Medical School.