Snapchat is a monster. According to the social media giant, over 166 million people use the app every day to connect with their friends and explore curated content from top publishers. Snapchat users also spend an average of 30 minutes on the platform daily.
Probably the most mind-boggling stat is that Snapchat reaches 45% of all 18 to 24 year old social media users in the U.S, according to eMarketer.
So shouldn't advertisers be running to the platform?
They haven't, and Snapchat's recent financial woes reflect that: After filing for their IPO in February, they missed their Q1 target of $158 million, with reported revenues of just $149.6 million. Taking into account that $149.6 million in revenue, Snap reported a net loss of more than $2.2 billion.
After their Q1 report, stock in Snapchat's parent company Snap Inc. plummeted some 23% in after-hours trading, declining to $17.64 per share. It's currently trading below $13. Snap's expected to release its Q2 earnings report later this week (August 10th).
One of the biggest reasons for their financial struggles is because Snapchat makes it tough for advertisers to market on their platform.
First, they lack detailed statistics for advertisers to maximize the effectiveness of their ads. Snapchat uses third party solutions, like Data Cloud, TUNE and Moat, which only give basic information; like the number of people that watch a video and for how long. They desperately need click through and completion stats. Until recently, they didn't allow much targeting data for agencies and advertisers, which means they're casting a wide net, hoping to reach the right customers.
If you want to get your professionally produced content in Discover, forget it - Snapchat requires literally months worth of content to be submitted to prove that you can produce high quality video on a regular basis.
It's also a lot of work for advertisers to create content for Snapchat. Because advertisers usually aren't repurposing their content - as they would on Facebook or Instagram - there is a ton of waste. To make things even tougher for advertisers, Snapchat has, thus far, been super protective of the creative process of their ads. Who wants someone looking over their shoulder when they're trying to make something?
Not playing nice with influencers is also a common gripe. According to a recent Digiday article,
"When an influencer who grew frustrated with the platform told a Snapchat product management executive that she was thinking of leaving Snapchat, the executive point-blank asked her to, saying, 'Snapchat is an app for friends, not creators.' Because of that hard line stance, influencers are taking their massive followings and leaving the platform."
Competition has also slowed Snapchat's user growth. Facebook and Instagram have copied some of Snapchat's core features, including expiring video and geofilters. Instagram Stories now boasts 250 million daily users, surpassing Snapchat's 166 million. Zuckerberg and Co. seem on a mission to crush Snapchat - and based on the latest numbers, they look to be on track to do just that.
So is it even worth it for brands to use Snapchat?
Short answer is 'Yes'.
As per Nick Cicero, CEO and Founder of Delmondo, a social video analytics company and creative studio which produces both organic content and Snap Ads for brands like Marriott Rewards, Mike's Hard Lemonade, NASCAR and the UFC:
"There's still a large, highly engaged, and interactive audience on Snapchat, and a sizable audience that you can't reach anywhere else. So for advertisers, still looking to reach consumers under 25, there's a massive amount of time still spent on Snapchat interacting with friends, chatting and consuming stories,"
An according to Mashable,
"A new report from App Annie, based on usage during the final quarter of 2016, found that 35 percent of Snapchat's daily users in the U.S don't use Facebook 'on any given day.' In other words: a decent chunk of Snapchat's daily active users in the U.S. aren't on Facebook every day. It's not just the notoriously-uncool-with-teens Facebook, either. Snapchat also bests Instagram, Facebook Messenger, YouTube and WhatsApp."
Cicero also notes that:
"It's not about if Snap is better than Instagram, it's about whether or not my audience is active there. There's a huge daily audience still on Snapchat that advertisers have had a tough time reaching. This audience is highly engaged and consumes a significant amount of content per user on Snap. With the barrier of entry lowered for all advertisers on Snapchat, combined with new features like Paperclip that enable users to link out, there's a more complete set of tools for marketers to activate and track ROI on the platform than ever before.
The addition of links in organic content, and swipeable ads provides greater metrics around conversion than ever before, so for brands who understand how to build a strong audience and interact with them regularly on Snapchat, we're continuing to see great results."
So, is Snapchat worth the effort? Absolutely - if that's where your audience is, that's where you need to be.
But, is it a pain to create expiring content? Yes. Is it almost impossible to get discovered organically? Yup. Are Snapchat's search and discovery tools terrible? No question.
But if you want to reach users under 25, there's no better way to do it.