State of Social Q3 2017: Snapchat Struggles For Relevance

state of social media snapchat

Snapchat, the shiniest new object in social media (at least as far as publicly-traded companies go), held its third earnings call since its initial public offering (IPO) recently, and the little ghost is struggling. Let’s see what the company had to report.

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. In Q3, its rate of growth dropped:

From 4.22% quarter-over-quarter growth to 2.89% growth, Snapchat clearly showed signs that its growth phase is over. This growth number is also psychologically important because it’s below Facebook’s quarter-over-quarter growth number – and Facebook has nearly complete market saturation.

Digging in more thoroughly, Snapchat’s growth was flat in North America, while it was sharply down in the rest of the world.

Revenues

Snapchat’s revenue declined quarter-over-quarter as it had in the previous year between Q2 and Q3:

This loss is contrary to its social media competitors; both Facebook and Twitter notched modest revenue growth in Q3. In the earnings call, Snapchat CEO Evan Spiegel attributed the loss to rapidly declining advertising costs; cost per thousand impressions dropped rapidly as the platform became more programmatic and self-service.

Snapchat’s struggles with ad dollars is reflected in its rapidly decelerating average revenue per user (ARPU):

Compared to Twitter ($1.50 ARPU) and Facebook ($4.90), Snapchat is leaving lots of money on the table.

The holiday season in Q4 is Snapchat’s make-or-break quarter. If they don’t crush it this holiday season, investors may give up on the company entirely.

What Should Marketers and Communicators Do?

Snapchat’s new ad platform and low prices mean that if your audience (mostly 18-34 year olds) is on Snapchat – a select demographic – then by all means take advantage of its low prices to advertise on the cheap.

However, Snapchat should no longer be a core part of your social media strategy if you don’t primarily serve the 18-34 year old market. Many of its features and most of its users are also available on Instagram; Instagram’s survival and success seems far more assured as part of the Facebook family than Snapchat’s struggles. Create content with an eye towards reuse on Snapchat, but create principally for Instagram first.

Snapchat needs to show its viability in Q4; if they don’t, prepare to throw in the towel on the platform.

Christopher S. Penn
Vice President, Marketing Technology

Download our new eBook, How Social Broke PR

Posted on November 8, 2017 in Marketing, Public Relations, Snapchat, Social Media

Share the Story

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.

Back to Top
Subscribe to SHIFT Happens!

Subscribe to SHIFT Happens!

Want fresh PR and earned media news delivered to your inbox? Sign up for the SHIFT HAPPENS newsletter!

You have Successfully Subscribed!