Why Social Media Shouldn't Forget About Mom and Dad
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What headline money and labor data set the scene for this episode?
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York. Kids should put down those phones and go play outside. In a moment, we'll explain how social media advertisers see trillions in dollar signs with all those kids texting and sharing photos. But they may be missing the mark. First, some money and market news you should know. While the summer's sun was sizzling, job listings were fizzling. The Labor Department says job openings fell 4% in August from a year ago. That followed declines in June and July.
How are cocoa prices and West African premiums affecting holiday costs?
The last time job openings registered three straight months of year-over-year declines was in 2009. But while economists say business demand is weakening, the economy is still adding an average of 161,000 jobs per month in 2019, and the jobless rate is at a 50-year low. It's going to cost you more to give chocolates this coming holiday season. Cocoa prices have surged this year, but not because supply is down. West African nations Ivory Coast and Ghana, which produce 60% of the world's cocoa, have said they would start adding a premium on cocoa on top of the price set by futures markets.
Why are advertisers so focused on Generation Z on platforms like Snapchat and TikTok?
They call it a living income differential. It's intended to improve conditions for cocoa growers who live on less than $3 a day. Now, while that premium won't apply until next year's crop, cocoa investors this year have pushed prices higher by about 15% to hedge against the expected price increase. But the aid to farmers could encourage them to grow more cocoa beans, and economists say that could eventually bring prices down.
Kids these days, they're always fixated on their smartphones and texting, sharing photos on social media. And that's where Gen Z has become a coveted audience for advertisers. Young people ages 7 to 22 influence about a trillion dollars in annual purchases in the U.S. But even though advertisers are flooding the kids' favorite apps, they could be missing their target.
How can targeting both kids and parents increase ad sales on social platforms?
Wall Street Journal Heard on the Street columnist Laura Foreman joins us to explain. So Laura, have advertisers through social media networks been successful in reaching Generation Z?
So they've certainly been successful in reaching Generation Z. And I think the easiest and most efficient way to do that is to target them through apps that are most popular with that generation. So we're talking about those like Snapchat, which has said recently it reaches now 90% of 13 to 24-year-olds in the U.S.,
Could Snapchat’s narrow Gen Z focus limit its ability to scale like Instagram?
Although, of course, other people are using it, the bulk of their users are on the younger side. TikTok is very much the same. Recent data I've seen showed about 40% of their users are between the ages of 10 and 20.
What conclusions does Laura Forman offer about broadening social media audiences?
So advertisers that are interested in hitting this demographic can certainly do so in a targeted fashion.
You mentioned TikTok and Snapchat, but not all social media is focused on Generation Z, right?
Right. The majority of social media is not. If you look at apps that are broader and more popular like Instagram and Facebook, they're targeting a wide variety of ages. So they're certainly hitting younger generations, but they're also hitting like the opposite end of the spectrum, you know, 50 to 70 year olds as well.
But could that be a costly misstep for Snapchat to hone their focus on Gen Z like they're doing?
It could be. And actually, recent data, I believe from September, published by Snap themselves, together with a company, research company called NC Solutions, showed that when advertisers can come up with an ad that targets both the influencer, so the Gen Z or the kid in the house who's trying to influence their parents to spend money, And the parent themselves, they see 20% more sales than when they just target one of those parties alone. It makes a lot of sense if you think back to like television ads where you saw Kellogg's Frosted Flakes, for example, like Tony the Tiger was super popular amongst children. But then, of course, every ad made sure to mention that the Frosted Flakes were part of a complete breakfast.
So that appealed to parents as well.
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Chapters
6 chapters
1
What headline money and labor data set the scene for this episode?
0:05–0:36
2
How are cocoa prices and West African premiums affecting holiday costs?
0:36–1:12
3
Why are advertisers so focused on Generation Z on platforms like Snapchat and TikTok?
1:12–2:07
4
How can targeting both kids and parents increase ad sales on social platforms?
2:07–2:35
5
Could Snapchat’s narrow Gen Z focus limit its ability to scale like Instagram?
2:35–2:47
6
What conclusions does Laura Forman offer about broadening social media audiences?
2:47–5:18
Speakers
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