Yahoo Finance Live anchors discuss how companies like Instagram are targeting teens and Piper Sandler’s latest survey on how teens are spending their money in 2022.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Piper Sandler is out with its latest Taking Stock With Teens survey, where they survey, nearly 15,000 teens on their brand preferences. And one thing is for certain we found from this report, Gen Z's got some really good taste.

Top brands among the teens range from On footwear, to Lululemon, to Nike. And Brad, I know you're focusing on Lululemon and Nike. I scroll down to [INAUDIBLE]. But I love this report. It's one of my favorite ones.

And really looking at the commentary that Piper found on Meta. Now, Meta is-- the stock is down about 60% year-to-date. And I think this survey perfectly captures why the stock is down 60%. And why it may continue to be under pressure, just given how the fundamentals of this business are shaping up.

So Piper noting that Instagram monthly usage ticked down to 87% of teens from 89% in the spring of 2022. The Instagram app is in third place--

BRAD SMITH: Yeah.

BRIAN SOZZI: --behind Snap and TikTok. Continues to be in third place. That is just a major red flag, this company. And I think it comes at a time where Meta might continue to cut expenses in a lot more ways than they have signal to the market, just given how they are now in third place. That was just-- that was not the case five years ago.

BRAD SMITH: Well, it's really just a shifting of expenses, too, because there's still a lot of money that's slated to go out the door, earmarked to go towards the Metaverse. And that is a multibillion investment that Meta Platforms is making. That's why they changed their ticker symbol. That's why they changed the entire vision for how the company is going to generate revenue in the future.

Right now, though, still very much leaning on the advertising revenue that they take in. The majority, if not all of this business, essentially, is the advertising business still. And so at this point in time, even for where teens are placing so much of their time and attention, it is the screen wars at the end of the day.

And it's how advertisers are going to look into the reach, the impressions that they're gonna get on any platform, whether that's a Facebook-- or Facebook, excuse me. I might as well have said The Facebook-- or Instagram, or TikTok, or even into some of the Netflix advertising tiers, or Disney advertising tiers.

There are so many different places where they're going to try and get the most bang for their buck. And it comes back to where the most time spent on a platform is and about the brands that are also still having the money to put forward in these spends. It's brands like Lululemon. It's brands like Nike.

Nike is still the number one brand for all teens in both apparel and footwear. They have 31% share in apparel, 60% share in footwear, according to this data as well. And so looking-- and there we go, right on the screen there.

You've got a solid look at exactly where some of those brands have even moved up. SHEIN is a new one. I still haven't ordered anything from there. I don't think I'm cool enough to wear anything from shoe-in-- SHEIN--

BRIAN SOZZI: Oh, you're cool.

BRAD SMITH: --just yet. I'm still going to Urban Outfitters like I was back in college.

BRIAN SOZZI: Well, you know who's not cool? And just-- I'll just-- I'm gonna go back to Meta for a second. When I go into Facebook right now, I'm bombarded with posts by my parents. I don't want to read their junk. I don't-- but I know with confidence that I go onto Instagram, lesser extent TikTok, they're not gonna be on there because they know how to use it.

BRAD SMITH: No.

BRIAN SOZZI: And I don't want them to see my posts. I don't want them to even know what I'm doing. So that's, for me, I guess, you know, I'm perfectly capturing the essence of this research from Piper Sandler.

BRAD SMITH: We know you're a Reels master, though. Let's be real at this.

BRIAN SOZZI: Yeah, I can do that.

BRAD SMITH: OK. Yeah, you got the Reels down. But here's one other thing I did want to highlight because this could have a much longer customer lifetime value for some of these brands. And I think about e.l.f, I think about Bath & Body Works. Bath & Body Works came in as the number one fragrance brand among female teens.

BRIAN SOZZI: Shocked. That was hot in high school.

BRAD SMITH: Exactly.

BRIAN SOZZI: I went to high school like 20 years ago.

BRAD SMITH: Staying power. Staying power right now. Ulta remained the number one preferred beauty destination, 42% share there. And so this is critical because now it's about how some of these brands also bring in a new slate of either influencers or just celebrities to really partner with and make sure that they've got those products on the cosmetic side to bring in more of that teen traffic and fanfare over an extended period of time, too

BRIAN SOZZI: You still go to Urban Outfitters?

BRAD SMITH: I do. I was just there a couple weeks--

[LAUGHTER]

Look, they got great sweaters.

BRIAN SOZZI: Just trying-- you know, you know get the audience, you know, to know us a little bit better here.

BRAD SMITH: It is just sweater and hoodie season. I'll be out here in these streets with the sweaters.

BRIAN SOZZI: [LAUGHS] OK.

BRAD SMITH: Yeah.