Facebook's Snapchat offer all about youth vote, marketing budget that goes with it

Summary:Facebook can't afford to have teenagers engage elsewhere if it's going to be an advertising juggernaut. In that context, $3 billion for Snapchat may not be all that insane.

Facebook reportedly offered about $3 billion to buy Snapchat, a service that features messages that basically self destruct. Why? Properties age quickly on the Web and teenagers matter to marketers.

The Wall Street Journal reported the Facebook offer. Nevermind that Snapchat isn't even remotely profitable. Meanwhile, Yahoo bought Tumblr for $1.1 billion all for the younger demographic.

snapchat screen

On the surface, these deals look a little bit nutty. But in the context of a marketing budget perhaps these deals don't look so crazy.

I've come around to thinking that these expensive acquisitions actually have some merit. Why? In a video that will go up Thursday, I did a 45 minute interview with Gamestop Chief Marketing Officer Ashley Sheetz. One big takeaway from Sheetz was that Gamestop is following its users to other social networks beyond Facebook. One of those sites was Tumblr. Sheetz said Gamestop has to be on Tumblr because that's where the gamers were.

Now this movement doesn't mean that Facebook is forgotten. Gamestop is active on Facebook too, but if you're a company that aspires to be a one-stop all demographic shop you're going to have to acquire your way there.

The Snapchat offer also comes after Facebook said that engagement with teenagers slipped on a daily basis in the third quarter. The disclosure was blown out of proportion in many ways.

Facebook saw a decrease in daily usage especially among younger teens in the third quarter. However, Facebook is close to the saturation point with teenagers in the U.S. anyway. Monthly usage for Facebook among teens remains steady. Facebook indicated that it is developing new measurement tools to estimates usage by age.

The big takeaway is that the youth vote is needed for any advertising driven company looking to grab more market share. Simply put, demographics matter.

Topics: CXO, Social Enterprise


Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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