$11 Billion Revenue Surge by Social Media Giants From Minors Sparks Urgent Calls for Regulation

In a disturbing development, social media giants collectively earned a staggering $11 billion in revenue from minors through advertisement last year, according to a study from Harvard T.H. Chan School of Public Health.

These findings point to the pressing need for the government to intervene and call for self-regulation by social media platforms, whose measures prove to be insufficient.

The researchers explored advertisement statistics on Instagram, Facebook, TikTok, X, Snapchat, and YouTube. They calculated revenue figures based on estimates for social media users aged under 18, who are considered minors.

The researchers obtained population data from the US Census as well as Common Sense Media and Pew Research. Moreover, they used data from Qustodio, an app for parental control, and Insider Intelligence (eMarketer) to publish a comprehensive report or simulation model. This brings the overall financial gains from minors in the US to public view.

According to the study, these findings mark a crucial juncture where tech companies need better transparency mechanisms and robust regulations. This can help in mitigating the negative impact on the mental health of youth, curbing harmful practices of advertisements that target adolescents and children.

The American Academy of Pediatrics, in its 2020 policy paper, stated that children are “uniquely vulnerable to the persuasive effects of advertising because of immature critical thinking skills and impulse inhibition.”

A senior author of this study and a professor in the Department of Social and Behavioral Sciences at Harvard, Bryn Austin, stated, “Our study suggests they (social media platforms) have overwhelming financial incentives to continue to delay taking meaningful steps to protect children”.

As these concerns gain momentum, states like Utah and New York have passed legislation to curb the use of social media among minors. The parent company of Facebook and Instagram, Meta, is also facing legal backlash from several states for the ongoing mental health crisis in youth.

The study reveals a stark reality, showing that social media platforms are reluctant to disclose the revenue they generate from minors. This absence of transparency further intensifies the need for regulatory measures to protect the interests of minors and youth.

The following table shows the advertisement revenue earned on different social media platforms from minors in Million USD.

Social Media Platform
Users 12 and Under
Users 13-17
Overall Share from Users Under 18

YouTube
$959.1 million
$1.2 billion
27%

Instagram
$801.1 million
$4 billion
16%

Facebook
$137.2 million
Not in the top 3
Not in the top 4

TikTok
Not in the top 3
$2 billion
35%

Snapchat
Not in the top 3
Not in the top 3
41%

These figures show the adverse impact of social media advertising on minors. It prompted the Federal Trade Commission (FTC) to propose substantial changes to the existing laws that would regulate the tracking of advertisements to children.

Among the proposals presented, some include turning off targeted advertisements for children under 13 by default and restricting push notifications.

While social media companies have been showing advertisements to children over the years, the line distinguishing between marketing and content has blurred. The lack of adequate regulations on social media giants worsens the situation.

With this report from Harvard, the spotlight now shifts to the role of regulators to ensure the mental well-being of minors. It remains to be seen how lawmakers react to the report.