A snap code in Times Square this spring - photo courtesy of Anthony Quintano
If you’re a small business owner, entrepreneur or startup founder, you may be wondering which social media platforms are worth your investment. In our post on digital transformation, we recommended that you play to your strengths; you’ll be investing a lot of time learning the platform, driving organic growth, finding affinity with current customers, and connecting with potential partners. Assuming you have limited time and budget, you should start with one or two platforms that will give you the best ROI now in addition to the most long-term growth potential.
But social platforms are not equal, and today’s hottest network could be tomorrow’s Vine. Why waste time building an audience on a channel if it’s going to fall out of favor soon with your target market? Several clients have asked us for advice on Snapchat in light of the new ad platform that just rolled out, so let’s dig into some recent stats and changes…
Snapchat stood out—and got copied
Last fall people stood in line for days to get a pair of Spectacles from a vending machine—a smart PR stunt that’s being repeated in Cannes this month to distribute Snapchat's proprietary filming glasses. But why has Snapchat been so popular?
The answer lies largely in ephemeral content that disappears, and Snapchat was the first channel to introduce it widely. Ephemeral media is especially compelling to Centennials, who grew up watching their Millennial older siblings over-sharing and living to regret it later in life. It also reflects broader trends toward self-acceptance, personal transparency and casual communication amongst consumers. But a lot has changed since last year, most notably in a competing product from Instagram, which most closely mirrors the purpose and demographics of Snapchat.
With the launch of Stories last August, Instagram figured out a way to tap into that same need for quick, silly or embarrassing content, including the ability to annotate with text, drawings and emojis. Snapchat doesn’t have Instagram’s entrenched user base, which put Snap, Inc. at a disadvantage by needing to convince users to sign up for and keep using the platform. In contrast, Instagram was adding a new behavior to its already installed and widely used app.
Yes, it was a total rip-off of Snapchat’s functionality, but Stories is likely the biggest reason Snapchat’s audience growth slowed 82% over the past year.
Who uses Snapchat now?
This is a tricky question, because the number of registered users or downloaded apps is not the same as the number of people who say they use the platform, or actually log in on a regular basis. The Pew Research Center’s Social Media Fact Sheet provides a snapshot of who’s on each platform, reporting in January that Facebook still had the largest pool of adult users when compared to Instagram, Pinterest, LinkedIn and Twitter. Snapchat wasn’t part of the study, but it provides insight into the demographics of social media usage across the U.S.
According to a recent eMarketer study of social network users, Snapchat has the highest penetration of monthly active U.S. users amongst 12-17 year olds and 18-24 year olds. That figure drops significantly amongst the 25-34 set, and less than 20% of social media users age 35 and above regularly use the platform.
But people who aren't on the platform daily aren't going to see your ads, so a key metric to judge the viability of each platform is the amount of daily active users. In the case of Snapchat vs Instagram, the results are telling: Instagram’s Stories daily active users, at 250 million, have officially surpassed Snapchat’s, which were reported in May at 166 million. And that’s just the figure for Stories; Instagram usage overall has grown dramatically over the past year and recently reported 700 million monthly active users, largely driven by the popularity of Stories.
Opening up advertising tools
On the brand side, Snapchat hasn’t quite materialized into the social advertising juggernaut we expected, but some advertisers are still investing heavily in the platform and TV companies are more interested than ever. In fact, Mashable reports that Time Warner just signed a two-year deal with Snapchat worth $100 million to create special content for the channel.
Still, Snapchat has yet to win over the majority of advertisers: according to a survey on Business Insider last week, only 7% of marketers are planning to advertise on the channel, while a whopping 94% are advertising on Facebook. That may change soon: until recently only large brands and agencies were able to advertise on the platform, and custom lenses required a lengthy planning and creation phase.
To offset this, Snapchat recently rolled out a self-serve ad platform which gives greater access to brands, agencies and business owners, including the ability to start ads at any budget level and pay by credit card. It's joined by a new Publisher Tool that should help make the creation and testing process for vertical ads less onerous for agencies and brands.
Successful brands have equity—and deep pockets
However, it’s worth noting that the most successful brand creative on Snapchat comes from household names and global brands that are already well known, not small businesses and startups looking to build their awareness. While that may have been the result of an advertising model that favored large advertisers (ahem, $450,000 Lens), it’s important to be aware that one campaign can easily cost tens of thousands of dollars on the platform—a far cry from the modest and incremental budgets Facebook offers to Page owners.
From a creative standpoint, video ads are also more difficult and expensive to get right, which is a huge challenge for small brands. One social agency we know shoots Snap ads with the same type of production quality and crew they use to shoot TV spots, and to great acclaim. It’s beautiful, and quite successful for big brands, but that kind of production quality can easily rack up a $100k tab for a shoot that only gets you a few Snap spots to run in one campaign. It’s much, much harder to create compelling video for a finicky audience than it is to create static ads, a consideration to be taken seriously when evaluating the platform.
Keep in mind, too, that your branded content and video advertising is going to be competing for users’ attention on a crowded channel where 80% of the coveted 18-24 demographic skip Snapchat ads, and most users don't follow brands or publishers, which certainly limits the potential reach of your content and campaigns.
To sum up, given these factors Snapchat isn’t the first social channel we'd recommend for most small businesses. While it depends on your product, target audience, marketing strategy and in-house resources, platforms like Instagram and Facebook could be a better investment for creative advertising. A marketing expert or digital agency will be able to go further in depth on social planning to recommend a customized course of action for paid and organic content. Until you're ready to take that step, researching the landscape yourself will give you a head start!
Do you have a question about social or another marketing topic? We'd love to help: Ask us!