Snapchat has published its latest performance update, showing a major boost in revenue for Q4 2020, and a solid increase in active users over the period.
First off, on usage - Snapchat added 16 million more daily actives in the quarter, taking it to a new high of 265 million DAU.
As you can see here, Snapchat saw the most significant jump in the 'Rest of World' category, which Snap attributes to its investments in local content and improved language support, while its major Android update, which it rolled out back in 2019, has also helped it boost its presence in India, where it's now seeing solid growth.
That expansion is obviously key, as Snap hasn't seen the same growth momentum in other markets. But still, the app did add more users in North America and Europe as it continues to refine its platform and offerings, aligning with usage.
Part of Snapchat's big push here is engagement, and keeping its users coming back. On that front, Snapchat also shared the amazing stat that over 90% of the US Gen Z population watched Shows and publisher content in Q4 2020.
Snapchat's original shows have been a solid performer for the company, with many now reaching tens of millions of viewers on average.
Interestingly, that's also seen Snapchat connect with older audiences too, with total daily time spent by Snapchatters over the age of 35 engaging with Shows and publisher content increasing by more than 30% year-over-year.
Snap's now investing in a new round of programming to boost its Discover platform further, as it seeks to redefine episodic content for the next generation of consumers, while it also launched a record 97 new international Discover channels in Q4.
Further on engagement, Snapchat says that over 200 million of its users engage with its augmented reality tools every day, while its latest viral effect, which enabled users to turn themselves into an Anime-style character, generated a billion impressions in its first three days after launch.
Snapchat also says that its TikTok-clone 'Spotlight', which it launched in November, and which comes with the added lure of paying its top performers each day, has had a good reception, with over 100 million monthly active users in January.
It still feels odd to see Snapchat replicating another app's feature - usually this is the other way around - but as noted, the daily payouts have been a big draw for some creators, some of whom are generating solid incomes from their Spotlight clips.
It remains to be seen whether this is a sustainable process for Snap, but the initial results show some promise. If Snap can keep those payments up, and facilitate a new creator eco-system for Spotlight, it could end up being a valuable addition to the app.
On the revenue side, Snapchat's overall revenue performance increased 62% year-over-year to $911 million for the quarter.
As you can see, the majority of Snap's revenue is still coming from North America, but that could point to greater opportunity for expansion as the European and 'Rest of World' markets catch up over time.
Snap's biggest advertising addition for the quarter was the expansion of its augmented reality 'Try on' campaigns, which are now being utilized by over 200 beauty brands. Snap's also expanding its AR offerings into new areas, like shoes, as it seeks to push the limits of what's possible with the advancing tech.
Snap's also looking to move into digital fashion, with a patent published last month outlining a new process that would enable users to dress their Bitmoji avatars up in the latest fashion items.
Snapchat has already partnered with Jordan, Ralph Lauren and Levi's on similar integrations, but the broader expansion of this program would bring a whole new range of sponsored clothing options into the app, enabling brands to connect with users in a completely different way.
That's not the same as trying the items on yourself, or even overlaying them on a digital version of your body. But the aspirational nature of this process could help boost brand assocation, and could subsequently have major benefits for increasing audience connection.
There's a lot to like about Snapchat's current direction, and its steady growth, both in usage and engagement, points to a range of ongoing opportunities for advertisers looking to connect with its younger audience.
And maybe, Snapchat's audience is even growing up, and getting a little older as time goes on. That, of course, makes sense, but the view has been that Snapchat users move on from the app, rather than sticking with it as they age up. Its growth in over 35 usage could indicate that this is changing, which also points to more future potential for the app.