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Children are Big Tech’s Golden Egg – Of Course Big Tech Oppose Regulation

Billions of dollars slip into the pockets of big tech when children and young people use social media. In December 2023, it was estimated for the first time how much money this may involve. While the amounts are staggeringly large, the companies’ incentives to keep children away from their harmful platforms are vanishingly small.

Social media platforms such as Facebook, Instagram, Snapchat, TikTok, X (formerly Twitter) and YouTube collectively earned nearly $11 billion in ad revenue from US-based users under the age of 18 alone in 2022, concludes a new study led by Harvard T.H. Chan School of Public Health.

According to the authors themselves, the study from Harvard is the first to provide estimates of the number of young users on these social media and how much annual advertising revenue can be attributed to them. It is only an estimate, because the tech companies will not present the real figures, and according to the authors’ abstract, this is a problem:

“Social media platforms are suspected to derive hefty profits from youth users who may be vulnerable to negative mental health outcomes, including depression, anxiety, and eating disorders. Platforms, however, are not required to make these data publicly available, which may limit the abilities of researchers and policymakers to adequately investigate and regulate platform practices.”.

The study’s authors write that their findings highlight the need for greater transparency from social media platforms as well as regulation of potentially harmful advertising practices that may exploit vulnerable children and young social media users.

When it comes to the desire for greater transparency from social media platforms, experience shows that we probably shouldn’t get our hopes up.

But while we wait for Godot, we can hope that there will be more push in the political arena. In Denmark, the slow pace is not so much due to the lack of political will. For example, three Danish ministers have decided age verification in 2023, so that the platforms cannot let the children in and monetize on them without a real age check. But EU legislation currently sets a stop to this. And as we have documented in this report on Big Tech’s Soft Power, tech giants are skilled lobbyists – also in the EU. And of course they oppose any kind of legislation that would keep children out of their digital services – because children equal dollars.

The study shows that:

Among children 0-12 years of age, advertising revenue came from:

YouTube: $959.1 million.

Instagram: $801.1 million.

Facebook: $137.2 million.

Among young people aged 13-17, the estimated advertising revenue was generated at:

Instagram: $4 billion

TikTok: $2 billion

YouTube: $1.2 billion

And broken down by platform it looks like this:

Snapchat: On Snapchat, nearly half (41.4%) of total ad revenue in 2022 was estimated to come from youth ages 0-17

TikTok: On TikTok, children account for a whopping 35% of total ad revenue

YouTube: children account for 27%

Instagram: on Instagram the number is 16%

Revenue from under-18s is relatively low for Facebook and Twitter, with the estimated percentage of total annual ad revenue generated from users aged 0-17 being 1.9% and 2.0%, respectively. This is likely due to the low number of young users on each of these platforms compared to adult users.

Facts about the study

Objective: to estimate the number of US-based child (0-12 years) and youth (13-17 years) users and the annual advertising revenue generated from youth across six major platforms.

How: Data was obtained from public survey and market research sources conducted in 2021 and 2022. A simulation analysis was performed to derive estimates of the number of users and annual advertising revenue per age group and overall (age 0-17 years) for 2022. 

Photo: Garik Barseghyan, Pixabay