Facebook usage by those 18 or over was down 0.1% year-over-year in September, following a decline of 0.9% in August 2017.

Facebook's decline in usage may seem small, but is in stark contrast to its biggest competition, Google.

In contrast, Google and YouTube grew by 50% and 30% respectively.



People are not using Facebook the way they once did.

The tech giant's audience reach went down in recent months, according to a new report published by Brian Wieser, a senior analyst at Pivotal Research. Core Facebook consumption failed to grow year-over-year for a second consecutive month in September 2017, according to the most recent digital content ratings (DCR) data by research and measurement company Nielsen, which provides daily measurement metrics of audiences across digital media including video and text that is comparable to television.

While user numbers continued to grow, actual usage dropped, according to Wieser. Specifically, Pivotal's report found:

Facebook usage by those 18 or older was down 0.1% year-over-year in September, following a decline of 0.9% in August 2017.

There was a decline in usage per user across both months as user numbers rose by 7.8% in August 2017 and by 4.7% in September 2017.

In other words, while people continue to sign up for Facebook, they aren't really using it as much as they once used to. Instagram is a glimmer of hope, but only makes up a modest 1/10th of the overall consumption of Facebook and its properties. This has led Wieser to term Facebook as a sell-rated stock.

"While we continue to expect long-term top-line growth – and for Facebook and Google to expand their already dominant share of the digital ad spending – we think risks to companies in the sector which are generally ignored by investors will have an impact on the sector over time, and should be factored into valuations," Wieser wrote.

Facebook's decline in usage may seem small, but it is in stark contrast to its biggest competition. Google is on the upswing, with its text-focused properties including the home page, search, and Gmail growing by 50% year-over-year. Even YouTube, despite its spate of brand safety snafus in 2017, saw consistent year-over-year growth of around 30% every month until December 2017.

"Although brand safety issues are concerning to many advertisers, the sheer scale of YouTube – by itself equivalent to around 10% of all TV consumption – means advertisers have a continuing interest in finding ways to harness that platform," Wieser wrote.

While both Facebook and Google will continue to grow their share of digital advertising, their growth is poised to occur with substantially lower margins, said Wieser. This — along with imminent factors like GDPR and ePrivacy set to become laws in Europe in May — will also limit bottom line growth potential.

"Whether or not new policies will have an impact on overall growth in digital advertising in Europe this year or cause a shift in spending patterns remains to be seen," Wieser wrote. "However, of the two companies it seems likely to us that Google will be less negatively affected. Search advertising seems more likely to be relatively immune to the new rules, which would seem to favor Google on a relative basis."