How much time do social media users spend on their favorite apps? Companies don’t have to say—but they should

A fresh wave of social media quarterly earnings is starting to arrive, and with it will come new proclamations about improving user growth. To wit, Snap kicked off the season by touting a 19% year-over-year increase in third-quarter daily active users, bringing its total count to 363 million.

Savvy and simpleton investors alike could easily pick apart Snap’s latest quarterly data. User growth in North America, by far Snap’s most lucrative market for revenue per user, ticked up only 4%. Global revenue per user fell 11% year over year. Total company revenue barely nudged up, while operating losses more than doubled to $435 million. (Snap shares plummeted 30% in midday trading Friday on underwhelming revenue and earnings, as well as a bleak outlook for the fourth quarter.)

Yet even with the copious amounts of user and revenue information, investors were still left mostly in the dark about an increasingly important metric for social media companies: time spent on Snapchat.

In an investor letter, company officials offered that “overall time spent watching content globally grew on a year-over-year basis,” but they never detailed how much. Snap executives did investors a solid by disclosing that users in the U.S. spent 5% less time year over year watching content on Snapchat—a giant red flag for the stumbling outfit—but they didn’t provide engagement figures for any other markets.

Snap isn’t alone in its reluctance to release data on time spent in its app. Facebook and Instagram parent Meta, Alphabet-owned YouTube, and Twitter don’t give such data to investors. TikTok, owned by privately held ByteDance, isn’t required to disclose usage or financial information.

Engagement data might have taken on less importance in the early days of social media’s rise, when companies prioritized user growth above all else. 

But as the social media industry matures, legacy outfits are butting up against market saturation, particularly in their highest-value regions. Over the past two years, Twitter’s sequential user growth in the U.S. has averaged just 2% per quarter. Facebook’s user totals in the U.S. and Canada are virtually unchanged during that same period. (The parent companies of Instagram, YouTube, and TikTok don’t regularly disclose user data.)

With fewer eyeballs to snag, the amount of time users spend glued to apps—and watching revenue-generating ads on those apps—takes on added importance. And in this respect, older apps appear to be struggling. 

In July, the digital market intelligence firm Sensor Tower reported that Android users spent an average of 95 minutes on TikTok per day in the second quarter of 2022. YouTube kept a decent pace with its Chinese counterpart, totaling an average of 74 minutes per day. But Instagram (51 minutes), Facebook (49 minutes), Twitter (29 minutes), and Snapchat (21 minutes) lagged well behind.

Investors can draw some reasonable conclusions about time spent on social media apps from third-party research groups like Sensor Tower. They also can reverse engineer some insights through total revenue and per-user revenue figures released by all social media companies.

But there’s no substitute for analytics data derived directly from the corporate source.

In one of her eight initial whistleblower complaints filed against Meta last year, former Facebook employee Frances Haugen illustrated the importance of more granular engagement data. 

While Facebook executives continued to tout user growth across the platform, Haugen reported that internal records showed young adults—the company’s most valuable demographic—were spending less time on the app than in previous years. The data on dwindling young adult engagement never showed up in SEC filings, which Haugen called a material omission meant to mislead investors. (No legal or regulatory body has agreed with Haugen’s assessment yet, and Facebook officials have said they’re “confident that our disclosures give investors the information they need to make informed decisions.”)

Federal laws and regulations might not require the release of down-to-the-minute user engagement information from Snap, Meta, and their corporate peers. Even still, as a matter of transparency and good investor relations, it’s time for social media companies to hit the share button.

Want to send thoughts or suggestions to Data Sheet? Drop me a line here.

Jacob Carpenter

***
If you want to know more about how to use A.I. effectively to supercharge your business, please join us in San Francisco, Dec. 5–6, for Fortune’s second annual Brainstorm A.I. conference. Learn how A.I. can help you augment, automate, and accelerate. Confirmed speakers include such A.I. luminaries as Stanford University’s Fei-Fei Li, Intuit CEO Sasan Goodarzi, Landing AI’s Andrew Ng, Google’s James Manyika, and Meta’s Joelle Pineau. Apply to attend today!

NEWSWORTHY

He’ll need a lot of pink slips. Elon Musk told potential investors in his Twitter acquisition that he intends to lay off about 75% of the company’s workforce if he purchases the social media outfit, a dramatic reduction that could stunt content moderation and product innovation efforts, the Washington Post reported Thursday. Musk has not publicly commented on his plans for job cuts, though the Post report cited corporate documents and interviews with sources familiar with Musk’s takeover effort. Twitter would be left with about 2,000 employees if Musk slashed the company’s workforce by three-quarters. The Tesla executive and Twitter officials are still negotiating details of Musk’s potential $44 billion takeover of the company.

Better luck next year. Instacart is scrapping plans for an initial public offering in 2022, opting to wait for market conditions to improve, the New York Times reported Thursday. The food delivery company took initial steps earlier this year toward going public, positioning itself as one of the few major tech firms that could go public in 2022. Those plans are being shelved, however, amid high inflation and global economic uncertainty, among other unfavorable conditions.

Piling on Beijing? The Biden administration is considering new export controls targeting China’s ability to acquire quantum computing technology and artificial intelligence software, Bloomberg reported Friday. If implemented, the export restrictions would mark another escalation in U.S. efforts to kneecap China’s technology sector, following similar controls announced earlier this month on advanced semiconductors. Discussions about quantum computing and A.I. export limits remain in the early stages, Bloomberg reported.

That’s some real money. BeReal, the trendy photo-sharing app owned by a company of the same name, closed a $60 million startup round earlier this year that valued the outfit at nearly $600 million, TechCrunch reported Thursday. The eight-figure round reflects the interest of high-value Gen Zers flocking to the app, which urges users to take photos of their surroundings and share them once a day. BeReal now boasts about 20 million daily active users, up from a reported total of roughly 8 million in July, an unnamed source told TechCrunch.

FOOD FOR THOUGHT

I spy a disagreement. Did TikTok executives in China plan to use the popular app to surveil two Americans with no connection to the company? As The Verge reported Friday, Forbes and TikTok officials traded barbs about the accusation over the past 24 hours, with the media outlet publishing the accusation and TikTok leaders vehemently denying the claim. The Forbes report detailed plans purportedly laid out by a high-level, Beijing-based executive to monitor the location data of American citizens, though reporters withheld information about the purpose of the surveillance scheme. (The plans were never executed, Forbes reported.) TikTok officials, however, said their technology doesn’t allow company officials to track users’ location in the manner described by reporters.

From the article:

In a series of tweets, TikTok accused Forbes of leaving off a vital part of its statement, which says that “TikTok does not collect precise GPS location information from U.S. users,” despite the article’s claims that its parent company, ByteDance, considered obtaining “location data from U.S. users’ devices.”

In a thread of tweets posted Friday morning, the article’s author, Emily Baker-White, had her own set of rebuttals, noting that “we never mentioned GPS in the story. In fact, we quoted their spokesperson saying they collect approx location via IP address. Not using GPS does not mean they could not use that approx location to monitor certain individuals.”

IN CASE YOU MISSED IT

What if Biden spikes Elon Musk’s Twitter deal at the last minute with a national security review? Shares are falling, by Jennifer Jacobs, Saleha Mohsin, and Bloomberg

Elon Musk says we’re already in a recession that could last until spring 2024, and only the strong will survive, by Christiaan Hetzner

Uber’s advertising boss says ‘cars will become our next living rooms’ after rolling out new ad business, by Tristan Bove

‘You would think that they would have learned by now.’ Facebook and other social media still serve up election lies weeks before midterms, by David Klepper and the Associated Press

TikTok let through 90% of ads spreading baseless claims around U.S. midterms, new report finds, by Barbara Ortutay and the Associated Press

This week in the metaverse: Booze collectors using NFTs, Meta can’t keep Giphy, and Bored Apes could crash your next poker night, by Marco Quiroz-Gutierrez

One chart shows how dramatically a16z’s crypto outlays have fallen, by Anne Sraders

BEFORE YOU GO

Lost in transmission. High-tech cars are throwing a monkey wrench in the auto repair business. Wired reported Thursday that mom-and-pop repair shops are struggling to keep up with fast-moving technology increasingly embedded in new vehicles, leading to lengthy and costly delays in getting broken-down cars back on the street. The challenges are particularly difficult in expensive, foreign-made vehicles, such as Audis and Porsches, which sometimes require specialized training that local mechanics can’t afford to obtain. Adding to the auto woes: Most repair-shop owners are nearing retirement, with not enough young grease-monkeys-in-waiting to take the wheel.

Editor’s note: Thursday’s edition of Data Sheet contained an inaccurate description of IBM’s full-year revenue growth projections. Company officials now expect to top estimates made earlier this year, exceeding mid-single-digit growth.