Snapchat has experienced its ups and downs in the past few years, but one undeniable truth prevails: the app continues to flourish. Snapchat is, in fact, exceeding growth expectations: eMarketer, for one, expects Snapchat to gain more than 63 millions users by the end of 2023, as contrasted to an original estimate of 52 million. In addition, according to The Street, Snapchat is on course to be profitable in the very near future, after years of losses: “Analysts expect Snapchat to soon reach its ‘break-even’ point in profits, most likely by 2022. A group of 34 technology analysts estimates the company will earn a profit of $48 million in 2022.”
Why the Growth?
Why is Snapchat continuing to grow despite increased competition from apps such as Instagram and TikTok? Some possible reasons include:
1 Continued Innovation
Snapchat’s owner, Snap, was just named Fast Company’s most innovative company in 2020, which speaks volumes about why Snapchat has rebounded from the brink. TechCrunch also reports that new products are bound to boost engagement with Snapchat and, crucially, ad views. Snapchat’s recent innovations include Cameos, which allow users to edit their own face onto an actor in an animated GIF. And Bitmoji TV features comical cartoons that star the consumer’s customizable Bitmoji avatar. For users who have always dreamed about being a secret agent, say, or a zombie president, Bitmoji TV brings those fantasies to life via episodes featuring a main story as well as shorter, single-gag clips. User avatars appear in the regularly scheduled adventures, which range from sit-coms to soap operas and infomercials. “It’s scripted but its personalized,” Bitmoji co-founder and CEO Ba Blackstock has said. “First and foremost, I hope that everyone who watches this has kind of a mind-blowing experience that they’ve never had before.”
2 Excellent Timing
Snapchat came along at the right time, as the Millennial and Gen Z population began to swell—and come of age. Launched in 2011, the app appeals to the Millennial and Gen Z populations with its promise of content that is both ephemeral and authentic. As co-founder Evan Spiegel noted in the company’s first blog post, “We’re building a photo app that doesn’t conform to unrealistic notions of beauty or perfection but rather creates a space to be funny, honest or whatever you might feel like at the moment you take and share a Snap.” And the platform has captured a sizable demographic. As Statista notes, Millennials and Gen Z, together, now comprise about half the U.S. population.
3 International Expansion
Snapchat continues to expand effectively into international markets, one profound example being the uptake of Snapchat in India. As TechCrunch observes, “Snapchat’s user growth has been on [a] tear thanks to international penetration, especially in India, after it re-engineered its Android app for developing markets.”
It’s not all smooth sailing, of course. As 24/7 Wall St. points out, Snapchat’s features can be—and in fact have been—easily copied by competitors like Facebook. When Snapchat introduced Stories, which allows users to share snaps in a narrative style, it was making a successful bid to keep users engaged and coming back for more. Facebook’s response? Its own version of Stories on both Facebook and Instagram; and the release of Instagram Threads, a camera and messaging app for “close friends.” As Wired notes, Facebook chairman and CEO Mark Zuckerberg has made it clear to employees that doing what’s best for users might include replication: “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy.’”
Furthermore, Snapchat lacks the reserves of cash that Facebook enjoys. 24/7 Wall St. opines, “While it’s still too soon to assess the impact of Instagram Threads on Snapchat, the salient point is that Instagram’s owner (Facebook) has a virtually unlimited war chest and a seemingly visceral need to stomp on Snapchat, if not to stamp it out entirely.”
The key for Snapchat? Staying nimble and creative in the competitive and ever-evolving social landscape. In short, the app will continue to thrive if it keeps on generating features that both users and advertisers will love – especially advertisers, whose revenue Snapchat needs. One example of courting advertisers with more features: Snapchat’s Swipe Up to Call ads, which give users the opportunity to swipe up on their screen and immediately and directly call or text the advertiser.