People Spend 2.5 Times As Much Time on Facebook Apps Compared to Google Apps
In the world of mobile apps, there's Facebook (NASDAQ: FB) and Google, and then there's everyone else. 32% of time spent using one of the top 100 apps in the world was in a Facebook-owned app, according to data collected by Apptopia. Apps owned by the Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary, including Google Maps and YouTube, account for another 22%.
Most surprising is that when it comes to total time spent in apps, users spent 300 billion hours in Facebook-owned apps in the three months from May through July. By comparison, people spent just 118 billion hours in Google apps. With 2.5 billion unique monthly active users across its apps, Facebook users spend an average of 79 minutes per day in its apps.
A lot of time messaging friends
While Facebook has three of the top four apps people spend time in, two of those apps are WhatsApp (No. 1) and Messenger (No. 4). The company has struggled to monetize both apps for years despite blowing past user bases of over 1 billion in each.
Amazon is closer to monetizing WhatsApp than Messenger. The company released a platform for businesses to use WhatsApp for customer relations management over the summer, and it plans to charge businesses for some messages to customers. It's also managed to grow its stories product, WhatsApp Status, to 450 million daily active users. Showing ads in Status is another way to monetize the most popular app in the world.
Facebook started testing ads in Messenger this summer. It's still too early to tell what kind of impact those ads will have on usage, and whether they'll be effective and attractive to marketers. But users spend a lot of time in the app, and Facebook doesn't make very much money off of that time spent.
Google also faces a challenge with hard-to-monetize time spent. The No. 9 most popular app is Google Maps. While Google can show ads for nearby stores, restaurants, and attractions, most of the time spent in Google Maps is used to navigate to a specific destination. It's a utilitarian app just like WhatsApp or Messenger are, for the most part. Such apps are a lot harder to monetize.
Facebook is still a dominant force in entertainment
Facebook also owns two of the most popular entertainment apps in the world: Facebook and Instagram. While YouTube edges out time spent on Instagram, Facebook manages to attract more time than both. That's pretty impressive considering YouTube says it has 1.8 billion users spending an average of about 1 hour per day on mobile. That said, some back-of-the-napkin math says Facebook's daily users spend about 41 minutes per day in the app and on the web.
Unlike YouTube, Facebook doesn't share ad revenue with creators, which means time spent on its apps is worth considerably more than time spent in YouTube. That's a huge advantage on top of the fact that people already spend considerably more time across Facebook and Instagram than YouTube.
Instagram still has room to grow its monetization levels, but Facebook believes it has reached maximum capacity in the number of ads it can show in news feeds. YouTube, likewise, isn't going to increase ads. But what both companies can do is increase the value of ads by creating more premium ads. YouTube, for example, recently started allowing more creators to use unskippable ads, which can be more valuable to some advertisers.
Overall, Facebook dominates easily monetized entertainment hours on mobile and has more room to grow ad dollars per hour than Google's YouTube.
The one thing missing from the list
I would be remiss not to mention Google's core search product. While the Google app isn't listed in the top 10 apps by time spent, it is one of the most popular apps by installs. It also dominates internet searches on mobile browsers.
Of course, the goal of Google search isn't to draw people into the app to spend time, it's to send them to the information they're searching for. To that end, Google isn't going to see a lot of time spent in the Google app or on the mobile web browsers, but it can generate a substantial amount of ad revenue for Google and its parent company with highly coveted search ads.
Google search still accounts for the vast majority of revenue at Google. So, despite holding a significant disadvantage in time spent on mobile to Facebook, Google is still the dominant force in digital advertising.
Facebook is still a close second, and everyone else is well off in the distance. It doesn't seem like anything is going to stop people from continuing to log into Facebook apps, even massive data privacy scandals. Investors interested in the digital advertising space would still do well with either company.
Find out why Facebook is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. (In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the market!*)
Tom and David just revealed their ten top stock picks for investors to buy right now. Facebook is on the list -- but there are nine others you may be overlooking.
Click here to get access to the full list!
*Stock Advisor returns as of August 6, 2018
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy owns shares of Alphabet (C shares) and Facebook. The Motley Fool owns shares of and recommends Alphabet (A and C shares) and Facebook. The Motley Fool has a disclosure policy.