Value of a social media minute

It is no secret that social media platforms pull out all the stops to capture and maintain an outside share of our attention. The platforms are perfectly designed to create new habits — algorithms trained to package content in a beautifully designed experience that captures maximum amount of time and attention from its users.

The “why” behind this goal simple — more time users are engage equal more advertising revenue. There has been lots written about the ability of Meta, Instagram¹, TikTok, Twitter and Snapchat to vacuum up time and attention. But how effective are each of these platforms at vacuuming up ad dollars from brands both big and small. In this article, we will explore not only how much time users are spending on platform, but also how valuable that time is to advertisers.

We are going to go into some numbers. We are going to look at traditional metrics like total users, time spent, and total ad revenue. We are also going to derive new metrics by applying some simple math to learn how much revenue each social network generates for each users time. Much like my earlier article on Quantifying the Attention Economy we will calculate the value advertiser place on each attention minute. As with many statistics about social media usage, the findings are as thought provoking as they are scary.

To start, we we look at the total number of users for six of the top social media platforms.² Facebook and Instagram hold the top spot, but their user growth is plateauing or in decline. For the most part, the entire social space is leveling off, with a few notable exceptions of TikTok and Reddit.

In looking at the y-axis, it is clear that the US penetration of these platforms is enormous. This user base is foundational to the rest of the charts in this article. We analyze each platform independently (i.e. not through app usage overlap) which allows for an apple-to-apples comparison of the “average user” of each platform

Using this base, we can calculate the total minutes of content consumed on each platform by taking the average minutes per day users spend on each platform and multiplying it by the user base.

The stand out platform in the above is of course TikTok. While this platform has 46% of the total users of the Facebook platform, its users on average 19 more minutes per day (+57%) on the platform. The growth trajectory of its user base suggest that it will emerge in 2023 as the leader in the social attention economy. In the next 12 months, TikTok will close the gap and likely over take Facebook for most minutes on platform with a smaller user base. To put this into context, this will be the first time a social platform other than Facebook will lead in this metric in the past 15 years. More amazing is that it is forecasted to accomplish this feat in only six years in the US market.

With these metrics in hand, we have set the stage to answer the question posed at the beginning of this article. Which platforms are most effective at attracting advertiser dollars and at what premium. Before you dive in the, let’s just review the simple math using a hypothetical:

• A platform has 100 users
• Users of that platform spend on average of 5 minutes per day
• There were 500 total user minutes consumed on platform per day
• Total annual minutes = 500 * 365 (days in a year) = 182,500
• The platform generated $5,000 in advertising revenue
• The revenue per attention minute is $0.027 (total revenue / total minutes or $5,000 / 182,500).

We can use this approach to to determine the total ad revenue per user minute on each platform using real numbers. While the actual values may seem small in the chart, keep in mind the magnitude, reach, and ability to capture attention that each of these platforms have makes each user minute incredibly valuable.

From the chart, it is clear that Facebook and Instagram command a premium advertiser on attention. Instagram platform captures 30 mins of its users time per day — the exact same duration as Facebook, but advertisers are willing to pay a 41% higher premium for attention on Instagram vs Facebook. In short, a minute on Instagram is more attractive to advertisers than a minute on Facebook.

TikTok, the rising star in the social network space, was able to generate $0.006 per minute of user attention in 2022 — less than half of what Facebook is able genetrate and one forth that of Instagram. While this is the picture today, we can put this into better context by looking at this metric as a trend and forecast out the average revenue per user minute in 2026. It is staggering that in a two-year period, TikTok is poised increase is revenue per user minute by 2.5X and be only second to Instagram.

If ever there was a case study to demonstrate the exponential nature of disruption, it is TikTok. By 2026, the platform will defy what we know about pricing as a function of supply and demand. Here are three stats to back that up. By 2026 TikTok will:

• Grow its US user base to 115 million (20% growth from 2022)
• Increase average user minute to 50 mins per day
• Increase its revenue its revenue by 190%
• Command 125% higher premium on user attention

It is clear that TikTok is disrupting the attention economy. But when taken in totality, it is amazing to see how effective each platform is at capturing advertising dollars. What stands out to me is not just TikTok’s disruption of the space but rather the attention premium at which more visually-led platforms command vs. more text-based platforms. While Facebook, Twitter, and Reddit offer users the ability to post text, images and video. Instagram, TikTok, and Snapchat are visual-first platforms. They require less mental overhead in that the user is watching vs reading. They garner lots of attention minutes per user and their revenue per user minute trends tend to be more favorable than their peers.

A predicton: The value of of user minute on social will jump 3X in the next 24 months. Based on the charts above, this does not appear to be the case. The reason for this actually has less to do with the platforms ability to capture ad dollars, but rather a redistribution of advertising spend. Specifically, spend required to create content (production) being put back into working media. Social platforms, unlike linear or over-the-top TV, demand content that is faster, less polished, and more form fit for the environment. Brands are still navigating this transition, but innovations in the text, voice, and video generation space will reduce the overhead to produce content. So, instead of reserving 10%–20% of advertising spend for social media content production, this number has the potential to reduce to 2–3% freeing up additional. advertiser cash that the social platforms can capture.

While the past year many of these companies and others in tech have shed massive value, we can expect record highs in years to come. For the first time many of these platforms have experienced a decline active users, regulations are getting tighter, they have missed earnings. The headwinds are many. But the platform’s ability to pull attention from its users combined with innovation in content generation create an environment in which the platforms can continue to increase the value of each user minute.

The winners will be those platforms that are more visually-led. So the next time you are on you “For you” page or thumbing through Reels I hope yo enjoy your time — time that is the catalyst of an invisible transaction between advertiser and platform.

¹ For purposes of analysis, Instagram is reported separately from parent company Meta which includes only former Facebook platform.

² eMarketer US Social Network Users, By Platform (2018–2022): Internet users of any age who use social networks via any device at least once per month