State of Social Q1 2017: Snapchat Reveals Little, Saturated Already?

state of social media snapchat

Snapchat, the shiniest new object in social media (at least as far as publicly-traded companies go), held its first earnings call since its initial public offering (IPO).

User Growth

Snapchat reports its userbase by quarterly averaged daily active users, meaning the number of users who are active daily on average throughout the quarter.

What we see is Snapchat’s growth in early days of its reporting over the last year. An interesting note is that its growth, quarter-over-quarter, is in the 3-5% range. This is the same growth rate as more mature social networks like Facebook, raising the question of whether Snapchat is already saturated or not. Time will tell, but compare Snapchat’s early reported numbers to Facebook’s numbers when it first went public; Snapchat’s growth rate is half of what Facebook’s was in 2010.

Revenues

Snapchat’s revenues mirror what we typically see of all social networks; advertising dollars ramp up in Q3 and Q4, then fall in Q1:

It’s too early to tell any significant trends in Snapchat’s revenues; however, one point of note is that Snapchat is heavily dependent on good high-speed mobile access. They’ve focused their efforts on North America and the EU markets as a result, excluding other markets as focuses for now.

A more useful benchmark is average revenue per user (ARPU):

The “gold standard” of social networks is typically $2 per user; Snapchat is far below that revenue mark right now and will need to substantially increase monetization in order to be financially competitive with its peer networks.

What do these results mean for you?

For Snapchat to be viable in the long run, it will need much better monetization. Currently, advertisers still need to cross hurdles to advertise, and measurement is still far below what other social platforms offer.

What else did Snapchat reveal?

The part of the earnings call which probably inspired the least confidence was that unlike other social networks’ earnings calls, CEO Evan Spiegel danced around what Snapchat’s roadmap is. At 43 minutes into the call, an investor asked what innovations could be coming, and Spiegel remarked:

“Yes I think at this point we’re kind of famous for not giving guidance on the product pipeline but we’re obviously excited about it and we love surprising our community so should be a fun rest of the year.”

Given how quickly Facebook is working to copy Snapchat’s features and integrate them into its core platforms, Messenger, and Instagram, I’d be hesitant to recommend making Snapchat the dominant part of any social media strategy. Participate if your audience is present and active, but look to Facebook’s offerings for more robust advertising options and analytics.

We’ll see what else Snapchat has in store for products that support what marketers and communicators want to achieve, but for now, it’s part of a social strategy but not the heart of one.

Christopher S. Penn
Vice President, Marketing Technology

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Posted on May 11, 2017 in Marketing, Media, News, Public Relations, Snapchat, Snapchat, Social Media

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About the Author

Christopher S. Penn is an authority on digital marketing and marketing technology. A recognized thought leader, author, and speaker, he has shaped three key fields in the marketing industry: Google Analytics adoption, data-driven marketing and PR, and email marketing. Known for his high-octane, here’s how to get it done approach, his expertise benefits companies such as Citrix Systems, McDonald’s, GoDaddy, McKesson, and many others. His latest work, Leading Innovation, teaches organizations how to implement and scale innovative practices to direct change.

Christopher is a highly-sought keynote speaker thanks to his energetic, informative talks. In 2015, he delivered insightful, innovative talks on all aspects of marketing and analytics at over 30 events to critical acclaim.

He is a founding member of IBM’s Watson Analytics Predictioneers, co-founder of the groundbreaking PodCamp Conference, and co-host of the Marketing Over Coffee marketing podcast.

Christopher is a Google Analytics Certified Professional and a Google AdWords Certified Professional. He is the author of over two dozen marketing books including bestsellers such as Marketing White Belt: Basics for the Digital Marketer, Marketing Red Belt: Connecting With Your Creative Mind, and Marketing Blue Belt: From Data Zero to Marketing Hero.

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