Instagram struggles with fears of losing its 'pipeline': Young users

Instagram's fears about losing young users also highlights how much the Internet industry prizes them. PHOTO: REUTERS

SAN FRANCISCO (NYTIMES) - When Instagram reached one billion users in 2018, Facebook chief executive Mark Zuckerberg called it "an amazing success".

The photo-sharing app, which Facebook owns, was widely hailed as a hit with young people and celebrated as a growth engine for the social network.

But even as Mr Zuckerberg praised Instagram, the app was privately lamenting the loss of teenage users to other social media platforms as an "existential threat", according to a 2018 marketing presentation.

By last year, the issue had become more urgent, according to internal Instagram documents obtained by The New York Times.

"If we lose the teen foothold in the US, we lose the pipeline," read a strategy memo from October 2020, which laid out a marketing plan for this year.

In the face of that threat, Instagram left little to chance.

Starting in 2018, it earmarked almost its entire global annual marketing budget - slated at US$390 million (S$526 million) this year - to targeting teenagers, largely through digital ads, according to planning documents and people directly involved in the process.

Focusing so singularly on a narrow age group is highly unusual, marketers said, although the final spending went beyond teenagers and encompassed their parents and young adults.

The Instagram documents, which have not previously been reported, reveal the company's angst and dread as it has wrestled behind the scenes with retaining, engaging and attracting young users.

Even as Instagram was heralded as one of Facebook's crown jewels, it turned to extraordinary spending measures to get the attention of teenagers. It particularly emphasised a category called "early high school", which it classified as 13- to 15-year-olds.

Any slip by Instagram could have larger consequences for Facebook. The social network hoped that Instagram would entice more young people to all of its apps, replenishing Facebook's ageing user base, according to the documents.

But the documents also show that Facebook has since abandoned aspirations of becoming a teen destination, just as Instagram has increasingly debated how to hang on to youthful audiences.

The disclosures underscore how much is at stake for Facebook as it seeks to address an outcry in Congress and from the public over Instagram's effects on users' mental health.

According to separate documents from a Facebook whistleblower, Ms Frances Haugen, which The Wall Street Journal published, Facebook has known that some teenage girls reported feeling worse about their body image when using Instagram.

Ms Haugen testified at a Senate hearing this month that Facebook deliberately kept people, including children, hooked to its services.

Instagram's fears about losing young users also highlights how much the Internet industry prizes them - and how elusive their attention can be, even for an app that is itself young.

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Instagram, which Facebook bought in 2012, is less than 12 years old. It has plenty of cachet with teenagers, but rivals such as TikTok, the Chinese-owned video app, and Snapchat, the ephemeral messaging app, keep nipping at its heels.

Concerns over teenage users have recently deepened among Instagram's executives, including Mr Adam Mosseri, the head of the app, said five current and former employees, who were not authorised to speak publicly.

In a meeting last month, they said, executives pored over data showing that a bump in new teenage users during the pandemic was ending.

"Teen time spent", a term denoting how many hours a day teenagers are on Instagram, also dipped. That was alarming as Instagram relied on teenagers to spend an average of three to four hours a day on the app, nearly double what adults spend on it, they said.

Ms Liza Crenshaw, a Facebook spokesman, said it was not true that Instagram focused all of its marketing budget on teenagers. But having teenagers as part of the marketing strategy was unsurprising, she added, since the company has long said that "teens are one of our most important communities because they spot and set trends".

In congressional testimony last month, Facebook's global head of safety, Ms Antigone Davis, disputed the premise that Instagram harmed teenagers, pointing to research that showed they had positive experiences on the app.

Facebook, which was initially aimed at college students, has long depended on young audiences. By law, its users have to be 13 years or older. The Children's Online Privacy Protection Act of 1998 makes it illegal to store or collect personal information of anyone younger than 13.

In 2013, Mr David Ebersman, then Facebook's chief financial officer, warned in an earnings call that the company's daily users had declined, "specifically among younger teens".

After Facebook's share price plunged on the comment, Ms Sheryl Sandberg, the chief operating officer, said the reaction to Mr Ebersman's remark had been "blown out of proportion".

That same year, Mr Zuckerberg tried - and failed - to buy Snapchat to increase Facebook's appeal with young users. So the company decided to attract young people with apps it already owned, like Instagram, two people with knowledge of the decision said.

In 2016, Instagram copied a key feature of Snapchat known as Stories, which lets people take videos and photos and post them as 24-hour temporary status updates.

In a July 2017 presentation reviewing a marketing campaign for Instagram's Stories feature, the app found that college-age students had been fastest to use Stories, while 15- to 19-year-olds were second. But 13- to 15-year-olds "did not respond", the document said.

"We have more work to do to break through with younger teens," the document said.

The interest in younger teenagers raised questions internally.

In 2017 and early 2018, three employees said, some of Instagram's workers asked whether ad campaigns aimed at 13-year-olds might inadvertently pull in children as young as 11.

Facebook knew that an ad intended for a 13-year-old was likely to capture younger children who wanted to mimic their older siblings and friends, one person said. Managers told employees that Facebook did everything it could to stop underage users from joining Instagram, but that it could not be helped if they signed up anyway.

In September 2018, Mr Kevin Systrom and Mr Mike Krieger, Instagram's founders, left Facebook after clashing with Mr Zuckerberg. Mr Mosseri, a long-time Facebook executive, was appointed to helm Instagram.

With the leadership changes, Facebook went all out to turn Instagram into a main attraction for young audiences, four former employees said. That coincided with the realisation that Facebook itself, which was grappling with data privacy and other scandals, would never be a teen destination, the people said.

Instagram began concentrating on the "teen time spent" data point, three former employees said. The goal was to drive up the amount of time that teenagers were on the app with features including Instagram Live, a broadcasting tool, and Instagram TV, where people upload videos that run as long as an hour.

When the Covid-19 pandemic hit last year, driving people to stay at home for safety, "teen time spent" increased to an average of three to four hours a day in the United States, compared with one to two hours previously, two former employees said. Adults were spending 30 to 45 minutes a day on the site.

But while a September 2020 planning document for Instagram's marketing showed the app had increased its number of daily users by nearly 24 per cent from a year earlier, some metrics on teenagers had started slipping.

Snapchat was the preferred app for best friends who wanted to message each other, it said, and TikTok was battling YouTube for teenagers who were sharing videos.

"In the midst of Covid-19, young people are considering IG's core sharing features less fun than before, and having nothing to share right now continues to be a barrier to sharing more," the document said.

The October 2020 strategy document, Instagram's Marketing Approach For 2021, indicated other red flags. A survey of 13- to 44-year-olds, who had left Instagram for competitors, showed that people of all ages were using YouTube and TikTok more, with teenagers specifically gravitating more to Snapchat.

"These apps offer things that Instagram is less known for - communication interests and entertainment," it said.

In May, Mr Mosseri shared a vision statement for Instagram with employees. In an internal post, which The Times viewed, he said the app would be "a place where young people define themselves and the future". He added that "young people and creators are at the forefront of emerging culture, which is where Instagram plays".

By then, Instagram was working on an app for children younger than 13 years. Mr Mosseri and Ms Pavni Diwanji, a Facebook vice-president who had built YouTube Kids, began recruiting for an "Instagram Youth pillar", a task force for the children's product.

Last month, after Ms Haugen's documents revealed that Instagram had hurt the self-image of some teenagers, Mr Mosseri paused the development of the children's app. But he said in a blog post that the work was not over and that Instagram should create a service with safety measures and content tailored for those aged 10 to 12.

"We believe building 'Instagram Kids' is the right thing to do. The reality is that kids are already online," he said.

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