State of Social Q4 2017: Snapchat Snaps Back

Snapchat, the shiniest new object in social media (at least as far as publicly-traded companies go), held its fourth quarter earnings call and its first annual call since its initial public offering (IPO) recently. 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 Q4, its rate of growth bounced back from half a year of declines, up 5.06% quarter-over-quarter.:

This is a good sign for Snapchat, especially since user growth in the fourth quarter of any year is tough. Consumers are especially distracted by many other priorities for their attention.

Digging in more thoroughly, Snapchat’s growth was strongest in APAC/EMEA, followed by Europe, then North America.


Snapchat’s revenue saw the traditional fourth quarter bounce that all established social networks see:

Fourth quarter earnings almost always are strongly positive as advertisers pour money into social networks for the holidays. B2B companies pay to retarget in order to close deals, while B2C companies solicit consumer purchases. Any social network that does not notch strong revenues in the fourth quarter is generally in trouble. Snapchat notched 37.5% quarter-over-quarter growth, a good sign and its strongest financial quarter yet.

With such strong revenues, Snapchat’s average revenue per user (ARPU) reached an all-time high of $1.53 per user:

While this is a reach from Facebook’s record-breaking $6 ARPU, it’s still a strong showing. Given that Twitter in its Q3 earnings hit $1.53 ARPU, Snapchat is now competitive from an investor’s perspective.

What Should Marketers and Communicators Do?

Snapchat is still catching up on the business tools side compared to its more mature brethren. They only recently released retargeting tools such as the Snap Pixel for advertisers to take advantage of; custom audiences are still limited to web audiences (versus uploading lists).

The real question will be whether Snapchat breaks out of its 13-30 demographic. In its earnings call transcript, CEO Evan Spiegel announced that the new user interface redesign is intended to help users above the age of 30 use the app more easily. It remains to be seen whether the redesign will have the desired impact, and whether Snapchat will diminish its influence with its core audience in the process.

One area of opportunity for marketers who are marketing mobile app installs is the relatively new App Install ad unit for Snapchat. According to the company, they’ve seen good results in users taking advantage of App Install ads.

For marketers aggressively courting the 13-30 demographic, Snapchat is worth experimenting in. Marketers should install the new Pixel in tag management and analytics systems, then measure to see how much of their traditional web audience is reachable via Snapchat. If it turns out that audiences are engaged, run some test ads to see how it performs versus other channels.

Christopher S. Penn
Vice President, Marketing Technology


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