Snap’s got a message for their haters, naysayers, and short-sellers pointing to their supposedly slowing growth: New users are overrated (especially when our existing users are so engaged).
At a time when Snap’s stock is hovering at a disappointingly low $18 while Facebook rolls out copycat product after copycat product, Snap released two new studies on Monday showing who’s using Snapchat, and why that is.
Snap’s new research shows that engagement on the app’s high, and influential, tooamong other ways they demonstrate this, Snapchat (as they tell it) drives purchase intent, since most people chatting on Snapchat know each other.
The research comes after shortly a dreary headline from Fortune, “Snap Investors Should Be Very Worried About This Number,” last week. An analyst surfaced data that Snapchat’s iOS downloads plummeted over 40 percent, and total downloads fell 22 percent in the last two months compared to the year prior, according to app tracking company Sensor Tower.
So, let’s say you’re an advertiser: How’s Snap still worth your money?
Nearly 60 percent of interactions on Snapchat are between close friends, according to a Snap-commissioned study by research firm Sparkler. That research is saying that you and your close friends are about three times more likely to influence each other to make a purchase decision, compared to celebrities, and your close friends are twice as influential as distant friends.
Another data point from Sparkler says about 95 percent of people say they trust recommendations from close friends; 71 percent say they often buy similar brands as them; and 62 percent say close friends influence them to discover new brands.
That idea of friends influencing friends comes in stark contrast to marketers using Facebook-owned Instagram (who tend to rely on celebrities as influencers, like traditional television commercials).
Of course, Snap’s still got a long way to go to take a significant chunk from the online advertising pie. Facebook’s expected to account for $16.33 billion of the display advertising market in the U.S. for 2017, according to eMarketer estimates, while Google’s gonna take $5.24 billion.
Snap’s estimated to have $0.77 billion of that pie. It’s a lot, but far from making a serious dent in the Facebook/Google duopoly, and it’s especially not enough given that Snap blew through $2.2 billion last quarter.
In other words: Snap needs more money.
Good thing Snap’s now making it easier to create ads. They just dropped their self-service advertising program in full, and launched a creative software suite that lets users create an ad for Snapchat in just two minutes.
So, who’s in this (apparently very engaged) audience on Snapchat who’ll be seeing those advertisements?
A separate study commissioned by Snap (and conducted by Greenberg Strategy) looked at when and where people snap. The most popular places shouldn’t be much of a surprise. Snapchat users frequently use it at home (81 percent), at parties (81 percent), and at concerts (70 percent).
You’re also more likely to see a kid snapping during school (64 percent) versus someone snapping during the workday (34 percent). Even more: About 86 percent use the app to communicate with friends and family, and 43 percent used it to look for advice specifically on making a purchase.
In other words, Snap’s making it easy to buy ads for their highly-engaged audience (even though it’s a smaller audience than the ones their competitors have). But is it gonna translate to more sales (and a higher share price)? Or do Snapchat’s haters have a long life to go before the company can make them like your Snaps, and disappear them into the ether?
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