Facebook (NASDAQ:FB) hasn't grown its 12- to 17-year-old user base in the U.S. since 2015, according to eMarketer. The firm believes that Facebook's growth in this crucial demographic will remain negative through 2020.
Facebook is struggling to retain teen users as more adults -- many of them the parents of those teens -- sign up. Adults have higher spending power, which gives Facebook more clout with advertisers. But the loss of teen users has sent brands focused on younger users toward other platforms.
Last August, eMarketer analyst Debra Aho Williamson said, "Facebook is fortunate that it owns Instagram, which remains a strong platform for teens." Williamson noted that while "usage of the main Facebook app is declining among teens, marketers will still be able to reach them on Instagram."
Instagram hit 500 million daily active users (DAUs) last September. The platform continues to battle Snap's Snapchat, which has 187 million DAUs, for the teen market. Facebook also recently launched the Messenger Kids app to attract younger users.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has the following options: short March 2018 $200 calls on Facebook and long March 2018 $170 puts on Facebook. The Motley Fool has a disclosure policy.