After Snap Inc.’s tumultuous IPO and flatlined user growth, it seemed as though the Santa Monica based technology startup was getting ready to disappear just like the millions of ephemeral “snaps” we now send to each other every day.
While it’s still a little too early to determine how the team plans on restoring Snapchat to its pre-IPO glory, ’Stay Tuned’, NBC’s latest attempt to get millennials watching the news, is clearly a step in the right direction. After achieving over 29,000,000 unique views in its first month, Spiegel may have finally found the one revenue stream that Facebook can’t actually copy.
In the Current Landscape, You Have to Be More Than Innovative
To quote Oscar Wilde, “Imitation is the sincerest form of flattery that mediocrity can pay to greatness.”
Snapchat has always had a reputation amongst teens and young adults as “the cool” social media platform, but hasn’t quite generated the reach to back it up. Whenever Snapchat ships a new feature, everyone wants to get their hands on it—including other social media services.
The problem isn’t that Snapchat isn’t being innovative enough, it’s that every innovation Snapchat brings to the market is then copied by other platforms with significantly wider reach. Here’s the issue: millennials don’t love Snapchat—they love the things that Snapchat lets them do, i.e. share life’s moments ephemerally, chat with their friends, consume content, and stay up to date with influencers. It didn’t take long before Instagram’s own implementation of stories surpassed Snapchat in daily active users.
As long as Facebook’s products have more reach than Snapchat, it’s going to take more than copyable features on Spiegel’s part.
Reliable Monetization Has Never Been One of Snap’s Strengths
Snap Inc. hasn’t had a problem attracting new users and getting them engaged, but the company’s plan to achieve sustainable monetization has always been somewhat up in the air. Similar to other social media services, Snapchat captures the undivided attention of teenagers and young adults—two demographics particularly desirable in the eyes of most advertisers.
It was always assumed that Snapchat would make the majority of its revenue through advertising, but with just 7% of marketers using the app in Q1 of 2017, it’s clear everyone’s favorite winking ghost still hasn’t quite figured out how to generate interest in paid ads. For now, it seems as though the Snapchat’s toolset is a tad too small for professional marketers to fully commit. Instagram, however, gives advertisers access to in-depth post metrics and the power to reach users across a wide variety of locations without having to change platforms.
Problems Aside, Snapchat Offers an Irresistible Audience to Advertisers
Snap Inc. may still be struggling with early monetization efforts, but the simple fact is, advertisers aren’t just going to suddenly stop caring about millennials and Gen Z’ers. In fact, Snapchat’s user base is likely one of the only things separating it from other social media services with more reach and better advertising features.
In a recent survey by Piper Jaffray, 39% of teens picked Snapchat as their favorite social media app, eclipsing Instagram by a solid 16%. The main selling point, however, is in just how engaged Snapchat’s users truly are. As Facebook and Instagram continue to become saturated with more users and more content, it’s getting harder for advertisers to capture the attention of users and generate authentic engagement.
Snapchat sees the highest natural content engagement out of any social media service today. According to Snaplytics, 54.8% of followers for an account will open a story, and 87.5% of those people will watch it all the way to the end. Snapchat’s emphasis on ephemerality has always encouraged users to create especially authentic content—one of the main reasons so many young people continue to use the app despite the widespread adoption of Instagram’s own stories.
Tapping Into Social Media’s Most Engaged Users
Without generating a strong interest from digital marketers, it’s becoming increasingly important for Snap Inc. to diversify the monetization efforts of its app. NBC’s recent launch of ‘Stay Tuned’ shows that with the right narrative, content creators can easily see view counts growing upwards of eight figures within a month of release.
After NBC’s hit news show resonated well with young audiences and achieved over 29,000,000 unique viewers, CNN is reportedly following suit with its own evening broadcast, “The Update.” Both shows will focus on key issues that millennials care about like climate change, race relations, and global politics.
It looks like Snapchat may finally be playing the right ball game. It’s impossible for Snapchat to beat other social media services on features, reach, and rollout, but it can take advantage of higher than average user engagement to get advertisers interested in exclusive video series.
With the majority of video consumption happening on mobile devices, authentic, captivating content with a unique delivery is becoming a necessity to marketers that want to effectively engage their audience. It will be interesting to see if Snapchat can continue to keep users interested in exclusive content from major players like NBC and CNN, but 29,000,000 unique viewers in a single month is nothing to scoff at.
With numbers like this, it will be impossible for advertisers to ignore the impressive millennial engagement consistently seen on Snapchat. And better yet, it’s pretty difficult for Facebook to copy Snapchat’s culture and engagement levels. But for now, Snapchat will have to stand up to the test of time and prove it can keep users excited about new video content.
Snapchat is arguably the only platform that hasn’t yet been oversaturated with sponsored content—and advertisers that can find a way to navigate this by producing authentic content for the platform’s users are bound to be rewarded.