Does Facebook Have A Teenager Problem? Does Google Have A Mobile Problem?

Teenagers are leaving Facebook, apparently in droves. I found one study that suggested a stunning three million teens had left Facebook in just three years. In related news, the growth of Google desktop search is slowing and is being replaced by mobile activity. At least some of this mobile activity comes from mobile app usage, […]

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Teenagers are leaving Facebook, apparently in droves. I found one study that suggested a stunning three million teens had left Facebook in just three years. In related news, the growth of Google desktop search is slowing and is being replaced by mobile activity.

google-facebook-logosAt least some of this mobile activity comes from mobile app usage, leading some to speculate that search volume might see serious declines as a result of app cannibalization.

So is the sky falling for both Facebook and Google? Of course not. Both companies have well-developed strategies to overcome these “deficiencies” and, I would argue, continue to grow market share.

Part I: Where Have All The Teenagers Gone?

I think there’s a very logical reason that teenagers are leaving Facebook — namely, Facebook just doesn’t have great utility for teenagers. Think about the social network of an average teenager — probably 90% of that network is made up of school friends, e.g., people that they see every day.

Part of the raison d’etre of Facebook is that it allows you to keep up with the people you don’t see “offline” on a daily basis. As you grow older, your social circles multiply: high school friends, college friends, work friends, neighborhood friends, parent friends and so on. In other words, teenagers have the least need for Facebook of almost any age group.

And an array of new social networks have sprouted up that provide experiences that are more aligned with what teens want to do (which seems to mainly be sharing ephemeral moments and snarky jokes). Snapchat and Instagram seem to be the two leaders in this space.

Teens using Instagram are now using a Facebook-owned app. Teens using Snapchat will eventually become young adults with multiple social circles and will return to Facebook.

Teens, by the way, also love their mobile phones, and Facebook has excelled at growing their “monthly mobile active users” or “mobile MAUs,” now at over one billion worldwide. And for teens who can’t afford text messaging charges, there’s always WhatsApp, now also owned by Facebook.

So teens might be leaving Facebook, but they’ll be coming back soon — either through a Facebook-owned service that teens love, or when they grow up and see more value from Facebook.

Part II: Will Google Go Down With The Desktop?

The shift from desktops to mobile devices has not been good for Google’s bottom line. The average CPC on Google is dropping — Q1 CPCs dropped 9% from Q1 2013 — and everyone agrees that the culprit is mobile CPCs. But dropping CPCs are just the tip of the iceberg for Google.

The bigger problem is that mobile usage is not as search-centric as the desktop. Consumers spend 89% of their mobile time on apps versus 11% on the mobile web!

Why do a search for restaurants if you have the OpenTable app, or a map search if you have Waze (now owned by Google), or a real estate search if you have Redfin? Just as the Internet destroyed yellow pages, travel agents, and video rental stores, apps pose a serious threat to companies that rely on search volume (at least in some categories) for their success, and it goes without saying that Google depends on search more than any other company in the world.

Google knows that mobile usage poses an existential threat and is aggressively fighting for mobile ownership. Google’s biggest mobile strategy is Android, their wildly popular mobile operating system. Owning the operating system allows Google to bundle Google mobile search, the Google Play app store and oodles of Google apps (Google Maps, Gmail, etc.) with every Android phone sold, thereby protecting their search revenue and opening up in-app revenue.

As an aside, Google is placing bets on whatever might be beyond mobile as well, such as Internet-enabled TV (Chromecast and Google Fiber), wearables (Google Glass), the Internet of Things (Nest), and even cars!

On the advertiser front, Google is working hard to educate marketers on the need for a mobile strategy (and therefore, mobile ad budget with Google). This is not easy work; most advertisers are still trying to figure out how to build a great mobile experience, how to define mobile success, and how to properly track mobile conversions.

Google has made numerous attempts to speed mobile adoption: a partnership with DudaMobile to help build responsive design mobile sites for advertisers, new “estimated total conversions” metrics that include cross-device conversions, and everyone’s favorite AdWords addition, Enhanced Campaigns.

It’s clear, however, that eyeballs are moving to mobile faster than advertiser budgets — and in the short term, Google will continue to struggle with lower CPCs as a result.

The Google-Facebook-App-Mobile-Advertising Collision

Last week, the news leaked that Facebook is launching a mobile ad network to enable advertisers to use Facebook targeting across apps and the mobile web. Think about what Facebook now offers to advertisers: three of the most popular mobile apps (Facebook, Instagram, and WhatsApp), incredible psychographic targeting, and an emerging ad network that allows you to leverage this data across both Facebook-owned properties and the greater mobile ecosystem.

Now compare this to Google’s offering: the largest mobile operating system, several of the most popular mobile apps (Waze, Gmail, YouTube, Google Maps), and the massive Google Display Network, which combines mobile search with contextual targeting on mobile apps and mobile sites. Oh, and let’s not forget Google+, which allows Google to collect psychographic data about users by following their activity across Google properties.

So yes, teenagers might not be enamored of Facebook anymore, and yes, desktop search is declining — but Facebook and Google figured these trends out years before the pundits noticed (including me!), and both have positioned themselves to own a big chunk of mobile revenue going forward.

Far from weakness, what we are really seeing today is the beginning of an all-out war for mobile dominance between two incredibly smart giants. Let the games begin!


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About the author

David Rodnitzky
Contributor
David Rodnitzky is CEO and co-founder of 3Q Digital, a marketing firm with offices in the San Francisco Bay Area and downtown Chicago. David is the founder of the LinkedIn Online Lead Generation Group, an advisor for Marin Software, and a regular contributor to the 3Q Digital blog. He can be found at numerous speaking engagements across the SEM community.

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