Too Little Too Late For Snapchat?
A few months ago, in one of our very first blog posts, we told you about Snapchat’s upcoming IPO. Since then, a fair bit has changed. Snapchat is now a publicly traded company. Instagram have changed the game with stories. Live video is becoming more popular by the day. All of this has left Snapchat feeling a little left out. Now a publicly listed company with thousands of shareholders, the pressure is on. This downturn has left Snapchat’s investors worried about their investment as the share price stalls
Advertising revenue is essential to companies like Facebook and Snapchat. Instagram’s advertising infrastructure has been in place almost since day one, as they were bought by Facebook some time ago. Snapchat, on the other hand, is building a platform from scratch and is not keen on bombarding their users with ads. This month, Snapchat FINALLY opened a self service advertising tool, allowing businesses to create and pay for their own adverts to be shown in between users’ stories. However, is it already too late? Is Snapchat essentially dead as a commercial platform?
What Makes An Advertising Platform?
Why, historically, have magazines, television, radio and the internet all been successful advertising platforms? Because everyone uses them and you can target specific demographics depending on what magazine, TV show or website you are advertising alongside. This is the root of Snapchat’s problems. The audience is leaving. As Snapchat’s users neglect dog filters opting instead for an Instagram boomerang, their platform becomes less and less attractive to marketers. Snapchat’s product is great. Don’t get me wrong I love a Snapchat story, but we’re all increasingly using Instagram stories. This is a problem for Snapchat and it may be too little too late.
Financially This Makes Sense
I’ve been saying it for months. Until Snapchat add a self service advertising tool, their revenue potential will always be limited (some proof below)
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Now, Snapchat have done it, HOORAY! It makes perfect sense, opening up the platform, allowing all businesses to advertise on there will allow their revenues to soar. But would you bother to advertise on Snapchat? We’re spending far less time on Snapchat. I’m 21 and a month ago, I could refresh Snapchat and see a brand new story from a friend at almost any hour of the day. As I’m writing this now, it’s 12:14pm. I’ve just refreshed my Snapchat feed for the first time since this morning… NOTHING. Do we care about Snapchat anymore? I’m not so sure.
A Saving Grace
In a desperate effort to find some positives for Snapchat, I’ve done some on the ground, market research. I have two cousins who are currently mid way through High School. I asked them whether they used Facebook, Instagram or Snapchat. Neither of them have a Facebook page, they love Instagram but not stories and both are obsessed with Snapchat. They explained just how socially imperative it is to have a significant Snapchat streak with what sounded like half their year group. Snapchat does still have an audience, it’s just that audience has changed. This generation are about to go out and get part time jobs, instantly making them consumers. This market could be Snapchat’s saviour, making them relevant as a marketing platform once again.
I love Snapchat, I really do. Anyone who’s friends with me has inevitably sat bored whilst I entertain myself with their impressive new VR filters. Although it looks bleak for Snapchat right now, there is some light. Let’s just wait and see….