Is Snapchat worth $19 billion or is it worthless? Is it growing or is it dying? Professionals and analysts can’t seem to agree. The source of this disagreement is the fact that Snapchat’s practices don’t make the most of its potential.
Snapchat has grown faster than any other social media network. Every day, around 100 million user share and consume content through Snapchat. To marketers, this should scream of opportunity. However, Snapchat doesn’t use this opportunity in a way that is useful to advertisers.Snapchat has the potential to generate ad revenue that rivals Facebook, but it’s current strategies point to a decline into worthlessness.
SnapChat’s value to users
Users find Snapchat valuable because it’s an effective way to entertain and communicate. Most users don’t care about anything outside of sharing and consuming photos and videos.
User engagement on Snapchat is greater than any other platform. This means Snapchat users aren’t just receiving content; they’re actually paying attention to it. These days, we mostly just scroll through feeds, engaging with a tiny amount of the content we are exposed to.
The fact that Snapchat users pay attention to most of the content they see is an extreme deviation from the norm. It’s mind-boggling to marketers.To put it simply: Users seem to find Snapchat extremely valuable.
SnapChats’s value to marketers
Today, attention is the number one factor that marketers are chasing. Since users are paying attention to Snapchat, it seems like Snapchat should be a marketer’s paradise. Well, the reality is a little more complicated than that.
One of the greatest problems with Snapchat as an ad platform is that it’s current approach benefits Snapchat far more than it benefits advertisers. Snapchat’s Discover platform provides a way for brands to share video content through Snapchat. However, this content lies outside of the normal stream of user-created content, making it nearly invisible to users.
In other words, Snapchat is completely ignoring an advertisement strategy that Facebook has proven is superior to traditional, please-pay-attention advertising. Snapchat doesn’t collect the wealth of user data that Facebook does, so it can’t advertise as effectively as Facebook. Deleting content is an attractive gimmick, but it’s poisonous to marketers, who rely on user data to target their audience.
The only saving grace for marketers is the overwhelming amount of attention that Snapchat content receives from its users. This opens the door for marketers to share branded content through the same means as regular users. It’s native, it gets attention, and it gives control back to marketers. This strategy is great for marketers, but a problem for Snapchat because it makes $0 for the company.
The punchline here is that Snapchat is generating revenue using a strategy that has proven to fail. The company will have to evolve or risk becoming irrelevant to marketers (and going out of business as a result).
The Future of SnapChat
Snapchat’s user numbers might continue to skyrocket, but that won’t matter if the company doesn’t figure out an effective way to monetize that attention. The unique approach to content that made Snapchat popular is going to stop paying off, and the app will have to change.
Snapchat has to start satisfying marketers. It only has a few years to do so before marketers take back their wallets and move on. Snapchat needs to either evolve or sell their company to someone who will. Otherwise, it won’t matter how many users the app has, because it won’t have the money to support them.