What Snapchat can do, Mark Zuckerberg thinks Instagram can do better. And for the most part, he’s been right about that; Snapchat’s growth is starting to slow and the company is struggling to compete against Instagram for new users.
Snapchat is a company with the primary goal of innovation. But when Evan Spiegel and his team develop their latest blockbuster feature for Snapchat, many other companies find a way to incorporate it into their own app. With the exception of Snap Map, nearly all of Snapchat’s original features have already been copied by Facebook’s Instagram and Messenger. After first stealing Snapchat’s disappearing photos, Instagram now officially gets more daily views on stories than their inventor does. That’s right, more people watch Snapchat stories on Instagram than they do on Snapchat.
If we can learn one thing from Snapchat’s business model, it’s a sad day to be a visionary in the tech world. When it comes to attracting users with new features, Snapchat was pretty hard to beat. The notion of a sending a snap was undeniably innovative, and the later addition of stories drove teenagers, celebrities, and advertisers to obsess over the platform.
Nothing But Great New Ideas
The simple fact is, Snapchat is and always has been a company founded solely on the promise of innovation. And again, when it comes to captivating the attention of users, this tactic works extremely well. But when it comes to actually making money, Snapchat’s “product” has proven to be somewhat ineffective.
The founders of Snapchat have always raised money to innovate further; dedicating millions to R&D and expanding their workforce. Furthermore, the purpose of Snap Inc’s near $30B IPO in early March was primarily to gain a strategic advantage over competitors and generate the capital to make expensive acquisitions.
The latest update to Snapchat brought Snap Map, an interactive map that allows you to post location based stories and find your friends via their Bitmoji. While this latest addition is a textbook example of Snap Inc. using acquisitions to continue innovating on its original app, it’s also an example of Spiegel introducing an attention-grabbing feature without a clear path to monetization. Like the rest of Snapchat’s once proprietary features, people like to use them, but so do other companies. And as more and more of them incorporate ephemeral content into their own business models, it’s becoming increasingly difficult for Snapchat to dominate the advertising space. With more options to choose from, Snapchat is no longer the default when it comes to sending and posting ephemeral content.
Getting Beat at Your Own Game
There’s really nothing Snapchat can do without changing their entire business model. The issue is, without patentable technology, platforms with more reach (like Instagram) will continue to steal and redistribute Snapchat’s ideas to generate fast growth.
At first, almost everyone doubted Instagram’s ability to successfully implement its own version of stories. And while many weren’t too excited at the thought of losing their favorite puppy filter, Instagram did make it possible to post stories and send disappearing photos without the need for a separate app—something which is apparently convincing enough to achieve well over 250 million daily active users on stories alone.
There’s really only one thing that trumps innovation, and that’s reach. After slowing Snapchat user growth by 82%, Instagram has proven that introducing over 700 million some-odd users to a new feature through an update is a lot more efficient than trying to attract users to a brand new app. And when it comes to digital marketing, Instagram has always provided advertisers with a wide array of options, accompanied by extremely detailed metrics. Instagram gives advertisers the flexibility of creating different types of post-based ads from one platform.
While Snap Map is definitely cool, unless Spiegel figures something out soon, advertisers on Snapchat are still limited only to stories and the discovery page.
But There Are a Few Things Snapchat Gets Right
The future for everyone’s favorite winking ghost may look grim, but Snapchat still has a few clear marketing advantages over other social media platforms. While new user growth may still be starting to slow, those that do use Snapchat manage to spend an average of 25-30 minutes on the platform every single day.
Snapchat continues to rival Facebook in daily video views, but sponsored filters and skippable ads aren’t proving to be the best option for generating substantial ad revenue. If Snapchat expects to turn things around and increase its market share of social media advertising, the founders will need to look for new ways to monetize through the app’s core features.
Though Instagram may have more users, it’s still an app designed to share permanent photos. Snapchat is one of the only mobile apps where content consumption is married to personal communication. Regardless of where you are in the app, the emphasis is always on user to user content. Snapchat makes branded content feel both authentic and personalized, bridging the gap between advertisements from your favorite companies and posts from your closest friends.
How Snapchat Can Turn the Fight Around
Unexpected to some, Snapchat’s Discover may be what ends up turning the company in the right direction. By forging strong partnerships for exclusive content with the likes of Vice, Daily Mail, BuzzFeed, and ESPN, Snapchat has made a feature that’s both unique and unable to be replicated. As one of the pioneers of vertical video, Snapchat has built a new system for content consumption that users just can’t seem to get enough of.
What ended up plaguing Facebook is also what made the platform so successful in the first place: extreme accessibility. While Snapchat’s navigation is slick, hidden and generally out of reach from older, less tech-savvy users, Facebook’s incredibly accessible interface turned the social media site into a breeding ground for older adults.
Snapchat is great for advertisers because the audience is dominated by young people. As long as Snapchat can stay “cool” by evading attention from older users, there’s still potential to improve monetization. Snap Inc’s core products all resonate with a young audience that’s proven to be quite lucrative to advertisers.
Unfortunately, digital marketing is currently a game of numbers, and advertisers are afraid Instagram may be pulling significantly ahead. If Snapchat wants to transition from chart-topping app to a full-fledged technology company, Spiegel will need to find new ways to generate sustainable ad revenue through the app’s core features while continuing to build innovative products.