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Sensor Tower · Abraham Yousef · January 2023
Sensor Tower Monthly Social Media Scoop
Social media networks saw a slight YoY deceleration in daily active user (DAU) growth in Q4 2022, with Snapchat increasing the most at 14%, followed by TikTok at 8%, Twitter at 3%, Facebook at 2%, and Instagram at 1%. With most networks approaching saturation in key markets, time spent is becoming an increasingly important driver for ad revenue growth. TikTok's hours engaged per day surged 107% post-pandemic, compared to Facebook, Instagram, Snapchat, and Twitter, which rose between 3% and 15%. TikTok is gaining a share of the smaller social media ad revenue pie from legacy rivals.
Key Takeaways:
Per ST estimates, the largest social networks all saw slight YoY deceleration in DAU growth in 4Q22. Snapchat increased the most at +14% (vs 18% a year ago), follow by TikTok (+8% vs 63% in 4Q21), Twitter (+3% vs 10% in 4Q21), Facebook (+2% vs 5% in 4Q21) and Instagram (+1% vs +12% in 4Q21)
With most social networks approaching saturation in key markets, an increasingly key driver for ad revenue growth is time spent; ST estimates that hours engaged per day on Snapchat and Twitter are nearly 1/10th that of each Facebook (~1.26bn hours in 4Q22) and TikTok(~1.15bn hours in 4Q22), likely due to the lack of a primary hub or offering dedicated to short-form video content; Instagram users logged 888 mn hours/day in 4Q22
Post-pandemic TikTok’s hours engaged per day surged 107% versus 4Q20, compared to Facebook, Instagram, Snapchat and Twitter which rose 11%, 15%, 10%, and 3%, respectively, compared to the same period
Per a new ST metric that tracks monthly user churn on apps, Instagram had the lowest user churn rate amongst the Social media apps at ~4% in Dec’22 vs 7% on Facebook, and 8% on TikTok (a significant decrease compared to the past few years with churn as high as 14% in Jul’20)
Social media ad revenue is under pressure, driven by softer consumer spending due to inflation; TikTok is gaining a share of this smaller pie from legacy rivals
TikTok’s rapid growth in active users and engagement have made it a compelling advertising platform, particularly to reach the critical Gen Z demographic, as well as the up and coming Alphas
Per Pathmatics US advertiser data, overall US ad spend on TikTok was up 59% QoQ in 4Q22 vs 22% on Snapchat, 15% on Instagram, 14% on Facebook, and -2% on Twitter
Twitter ad spend has fallen precipitously, negatively impacted by its recent management change and platform perception; US ad spend in 4Q22 fell 70%, 50%, 32%, 12% and 4% QoQ for the auto, telecom, CPG, health & wellness, and computers & consumer electronics sectors, respectively
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