EMarketer cuts 2019 estimate of Facebook usage by 5%

Brief:

EMarketer cut its forecast for U.S. adults' average daily usage of Facebook by 5% to 38 minutes this year from a prior estimate of 40 minutes, according to a report shared with Mobile Marketer. Facebook's effort to discourage passive viewing of content such as videos led to a decline in engagement in the past year, per the researcher.
Time spent on Facebook-owned Instagram is estimated to increase by one minute each year through 2021 from 27 minutes this year on the strength of Stories, influencer content and video. However, average total time spent with social media overall will rise to about 75 minutes a day by 2021 from 74 minutes this year, the researcher estimated.
EMarketer also cut its usage forecast for Snapchat, the image-messaging app that's popular among young adults and teens, by 7.4% to 26 minutes a day from 28 minutes a day for 2019. That usage will remain little changed for the next two years amid competition from Instagram.

Insight:

Facebook and Snapchat's steady or declining usage comes as the social media market shows signs of maturing after more than a decade of rapid growth. EMarketer's latest forecast indicates that the total average time spent on social media peaked at 75.2 minutes a day in 2017 among U.S. adults, before Facebook early last year changed its News Feed algorithm to highlight user-generated content over clickbait articles and videos. The company sought to create "time well spent" on its platform amid growing concerns about the possible negative effects of technology on mental health. Since then, other tech companies including Apple and Google also have created software tools to help people manage their screen time.

Unless the social media industry can boost overall time spent on their platforms — perhaps with more original video and gaming content — companies including Facebook, Google, LinkedIn, Pinterest, Snapchat and Twitter will have to continue finding ways to engage audiences who are pressed for time. Facebook this month updated its video-ranking system to give higher priority to original content that delivers on viewer intent, repeat viewership and longer watch times. However, the streaming video market is about to get much more crowded as high-speed 5G service expands nationwide and traditional media companies like Disney, AT&T's Warner Media and NBCUniversal expand their streaming platforms, and Apple rolls out its Apple TV Plus service this fall.

Facebook's future growth is more dependent on Instagram, which will continue to see increased usage over the next few years, while other social networks will see a dip in usage. Instagram has become the major source of sales growth for the parent company as ad spend on Facebook's main platform declines, a separate study indicated last month. In kind, Facebook has worked to make Instagram more attractive to marketers with a focus on commerce and shoppable features.

EMarketer's forecast for declining time spent on Facebook is another sign that the social media market is maturing in developed countries like the U.S. The company added just 2 million monthly active users (MAUs) in the U.S. and Canada from Q1 2018 to Q1 2019, a growth rate of 1%. Daily active users (DAUs) barely nudged upward to 186 million from 185 million a year earlier, according to a separate study. However, that didn't stop Facebook from reporting healthy revenue growth in those markets. Average revenue per user (ARPU) grew 30% to $30.12 in Q1 from a year earlier, indicating that Facebook continued to improve monetization of its U.S. and Canadian user base.