Snapchat, the photo-sharing social media platform adored by millennials, has seen rapid growth since it began in 2011. Dominating the world of ephemeral content, the app has seen its worldwide users grow by millions each quarter. In the UK alone, that figure is now 11.2 million users!
Last week after months of anticipation, Snap Inc., parent company of Snapchat, finally floated on the New York Stock Exchange. The stock, originally priced at $17 per share, actually opened at a higher price of $24 per share, silencing critics and making Snapchat even more valuable than Twitter.
Despite all this success, it hasn’t been plain sailing. Snapchat has definitely been kept on its toes by rather intense competition from all angles. Its rivals have all introduced their own versions of Snaps, and it’s no coincidence that the launch of Instagram Stories coincided with Snapchat’s audience growth slowing slightly in Q4 2016.
So what’s next for the for the King of ephemeral content and the app that still gets opened on average 18 times a day by its users?
Snapchat, the camera company: Spectacles and drones
Originally a social media platform, it’s clear that Snapchat wants to diversify and carve a more unique path away from its competitors. Having already begun its journey into social and wearables, it was no surprise that when they filed their IPO, Snapchat positioned themselves as a “camera company”.
Snap launched Spectacles last September – sunglasses specially designed to wear and take Snaps and post straight to Snapchat. They were unveiled very exclusively in the US, gifted to high profile influencers and sold in limited numbers through pop up vending machines. Spectacles are now available to buy in the US and Battenhall are lucky enough to have a pair arriving on Friday!
We’re just starting to see brands using Spectacles to create their own content. Costa coffee has just become the first UK brand to use this innovation in a campaign giving their Snapchat followers a teaser of a new product and taking them behind-the-scenes in its cafes. We can’t wait to see what other brands have in store!
The next move for Snapchat as a camera company is rumoured to be a Snapchat drone, which would allow users to take overhead videos and images. The drones would allow users to create fresh content to post the instant and ephemeral ‘storytelling’ aspect of social media. If this is the case, it seems they are definitely vying towards gadgets to encourage users to Snap more.
Growth through ad spend and brand partnerships
Snapchat has seen impressive growth in revenue from advertising spend over the past two years. They have gone from a standing start in 2015 to narrowing the gap with Twitter and Facebook. The average revenue per user more than tripled in December 2016 from 31 cents the previous year to $1.05. Not only this, their revenue has increased over sevenfold from $58 million in 2015 to $404 million into 2016. This gives the app potential to generate billions of dollars in additional revenue in the future. Providing users stay loyal to the platform, there will continue to be unique opportunities for international brands looking to connect with their millennial consumers.
Brands in all categories and of all sizes can use certain Snapchat features such as geo-filters and (more expensive) Lenses to reach new and existing audiences in a fun and innovative way. A great example of this is when a Sponsored Lens was used to promote Season 2 of Ash vs Evil Dead. The results were incredible: 22.5 million earned views and a 12 point favorability boost among users under the age of 25. Snapchat’s value to brands is undeniable and this is likely to remain true for a long while yet, particularly when using unique features such as experimenting with the Discover pages and Sponsored Lenses.
Will Snapchat be able to fend off the competition?
Intense competition from platforms with larger user bases is definitely creating a few hurdles for Snapchat and will test their future domination in photo and video sharing social media. However, there is room in the space for everyone! Snapchat is clearly still a very valuable piece of the puzzle and the platform is likely to have an exciting future that could go in many different directions. I don’t know about you, but we can’t wait to see what’s next from Snap Inc.!