June 10th, 2016 | Read more articles from 2016 or Visit the News Archive
Snapchat Rising: The Latest Growth Stats Among Users and Marketers
Originally Appearing at: Brand Channel
By: Abe Sauer
According to the latest projections from eMarketer, Snapchat is on track to expand its active US user base by 27% by the end of 2016, to nearly 59 million. In terms of active users that will put it ahead of both Twitter and Pinterest. People are already spending more time on Snapchatthan on Instagram or any other social media app except for Facebook. It’s worth noting that it took Snapchat half as long as Twitter to make it to that user base in half the time. Most importantly to marketers, Snapchat’s user base is incredibly young, active and enthusiastic.
Snapchat may soon be more used than Twitter but that doesn’t mean the social media platform won’t face some of Twitter’s same struggles turning a profit. To that end, Snapchat is rushing in to market its platform to brands even though it only began monetizing its services in 2015.
Twitter lost advertising dollars to Instagram in the first quarter, according to data released by STRATA. The Comcast unit this week released a first-quarter survey of 87 US advertising agencies, which found 96% of agencies responded they plan to advertise on Facebook and 67% plan to advertise on YouTube. Instagram came in third, with 63% of agencies surveyed placing their plans there, followed by Twitter, where 56% planned to advertise. Snapchat received 11% interest, an 84% jump up from the fourth quarter.
“I think ad agencies are finding their footing with social,” Strata director J.D. Miller told USA Today. “It’s always been something they wanted to do or felt like they needed to be in but now they’re spending money on it, which we’re seeing in our survey… They’re spending money more than ever before.”
According to the survey, general spending on social is up, with 17% of the agencies polled saying they would be putting up to a quarter of their ad budgets on social media. Social media also became the number one spot for digital spending at 77% of agencies, overtaking more traditional display ads — such as banner or video ads — that are common on the web.
In Q4, Snapchat reportedly pulled in $33 million from marketers. It has partnered with established media-buying and ad agencies to offer easier ways to highlight and connect to publisher content. “Press and hold to subscribe” is one recent addition to make connecting users to brands easier.
Some publishers have embraced Snapchat fully. A recent Adweek look at Snapchat’s redesign notes that MTV maintains “an 11-person Snapchat crew.” And getting brands and publishers to embrace Snapchat is good for Snapchat. Its business plan consists of ad revenue-sharing agreements with the publishers on its platform. More publishers getting discovered = more ads = more profit-sharing for Snapchat.
Video will play a huge role in Snapchat’s success. A recent study found that two-thirds of Snapchat videos plays are with the sound on. That’s good news for those brands that have become savvy at making engaging, short video content like MeUndies and Taco Bell—and are figuring out ways to get their message across without sound after learning that Facebook users prefer inaudible video snacking.
Meanwhile, over at one of the “old” social media platforms, Twitter is launching “Insiders” in the hopes of making itself more attractive to brands seeking focus groups and, ultimately, advertisers.
Insiders is a Twitter-based focus group, defined by Twitter as “a network of more than 12,000 Twitter users that participate in research studies… Agencies and their clients can work directly with Twitter Insiders or design studies with the help of [Omnicom’s] C Space, a team of consultants who specialize in fostering collaboration between companies and their customers.”
To keep things in perspective, even though Snapchat is the hot new social platform, Facebook Messenger is still the king of chat apps. By the end of the year, Facebook Messenger will claim 105 million active US users, double the number of Snapchat and Twitter.
It’s also noteworthy that as Snapchat moves quickly to monetize and grow, its core service may need attention if it wants to retain users — it only rates 2 out of 5 stars in the iTunes app store.
And a final thought: while everyone is starry-eyed over the heady rise of Snapchat, it’s worth keeping in mind that in China, WeChat boasts more than 750 million MAU (monthly active users)—more than ten times the celebrated number of Snapchat.
Snapchat, Twitter and Facebook are all blocked in China, giving a huge advantage to WeChat. But that might not be the case forever, at least for Snapchat.
Last year Alibaba poured a $200 million investment into Snapchat. That stake is widely seen as Alibaba’s attempt to catch up to rival Tencent, which owns WeChat. WeChat, meanwhile, is spreading globally as fast as it can.