Even before the company took its stock public, Snapchat was under a great strain to maintain a user base that would stick with it in the long term. In the cutthroat world of social media, it’s all about the numbers and Facebook was looking for blood. So it was no surprise when Facebook’s Instagram platform debuted a “Stories” feature that outmatched Snapchat’s functionality. This was August 2016, months ahead of the initial offering and valuation. A year later, will brands and consumers stay on?
Having watched the stock from the beginning go sky high, only to find it falling substantially, it’s clear that Snapchat has some huge steps to take if it wants to keep afloat in the chummed waters of the sea of social media. Let’s examine what this might mean for certain brands who are thinking of investing a lot of time (and money) into the Snapchat platform.
According to AdAge who interviewed an agency exec under anonymity, “Instagram ads cost $4 CPMs (price per 1,000 impressions) versus $8.50 for Snapchat.” That is a massive increase in spending for a brand that is unsure of a new platform to begin advertising on. With video being the biggest thing since sliced bread in advertising, capturing an audience for nearly double the spend seems like a crazy place to throw your money. It’s doubly crazy because Snapchat has yet to debut a backend analytics feature like Facebook is capable of which shows you where your money and audience is going.
Additionally, Forbes was quick to point out “Most influencers, as well as average users, flocked to Instagram Stories because it was where their current networks already were.” The same article goes on to say that the two networks are drastically different in demographic, so depending on what your brand’s social strategy is, aside from your ad spend nearly doubling, you’re bound to find more people through Instagram. This is just a better bet overall unless your brand is skewing super young and has really bold translatable content.
That’s not to say Snapchat is all bad, it certainly has an active and dedicated user base, as Business Insider published that users “spend an average of 25-30 minutes a day on Snapchat…60% are also creating new content.” That is a massive amount of time to be spent on one app, coming up with new and fun stuff to send your friends (regardless of its disposable nature). Snapchat users aren’t passive, they’re active and they’re notably younger which is why brands are clamoring to get their attention on the platform. I just don’t think it’s going to work as well as people are hoping.
Doubling your ad spend for a smaller audience and a specific demographic that can smell advertising from a mile away is going to be a hard thing to weigh. Even now Snapchat is doing everything in its power to compete with its arch nemesis, Facebook. It’s seemingly a race to the bottom as Instagram holds strong at 250 million active users and Snapchat at 166 Million, according to CNN Tech. Earlier this month they announced Snap Maps which allows you to see your friends snaps in a geo-targeted fashion, but even with this tech update will their innovation be enough to keep them in the running with a media giant like Facebook’s Instagram? I guess we’ll just have to watch the stock and see.