eMarketer Claims Daily Usage Is Now 30 mins
Evan Speigel, CEO of Snapchat, has reason to be cheerful.
After a bumpy 2018, usage bounced back strongly in 2019, before skyrocketing in 2020, as Snap’s recent quarterly results demonstrate.
On top of that, at the start of March, Snap was recognised by Fast Company as the “World’s Most Innovative Company”.
Which is nice.
Like most social channels, COVID-19 has sparked an uptick in usage, while depressing revenue. However, unlike elsewhere, it would be unfair to cite COVID-19 as the sole cause of engagement growth.
Snapchat has been innovating its socks off over the past 18 months, as Fast Company is happy to testify.
Even before the global health crisis, Snapchat’s engagement stats were off the chart, with recent events merely accelerating existing engagement and growth trends.
Accordin to eMarketer, time spent on Snapchat is estimated to grow by 12% this year, which brings total time spent to a little under 30 minutes per user per day. Market leader Facebook resides around 34 minutes daily.
At Snap’s 2019 Partner Summit, Ev Spiegel claimed that it was the best way to reach Gen Z:
‘We each more 13 to 24-year-olds than Facebook or Instagram in the United States, the U.K., France, Canada and Australia.’
As Snap’s recent earnings demonstrate, Snapchat grew its daily active users by 11 million from Jan – March, and by 20% year over year.
Total daily time spent by Snapchatters watching Discover content increased by over 35% year on year, while time spent watching Shows more than doubled. During the first quarter, 60 Snapchat shows reached over 10 million viewers, and more than 20 million people watched a Snap Original that debuted in March.
Snapchat Is An Augmented Reality Leader
Of Snapchat’s 229 million daily active users (DAUs), 75% on average play with its augmented reality (AR) “lenses” every day. That’s over 170 million people giving themselves a bee beard daily…
Users literally cannot get enough of Snapchat’s “wacky” AR lenses. By the end of March, 900,000 Lenses had been created by Snapchat users through Lens Studio, up from 700,000 in the prior quarter.
Snapchat is a long way in front of Facebook, Instagram and even TikTok when it comes to user adoption of AR. Perhaps in part due to its younger audience demographic.
Facebook launched its Camera Affects AR platform around three years ago, but has seen limited adoption since.
While within Snapchat, not only do users play with lenses daily, but they also create them at scale.
On average, Lenses made by users via Lens Studio now make up over 30% of the total Snaps sent every day with a Lens, with top-performing Community Lenses reaching billions of views on Snapchat.
Snap’s COVID Moment
The pandemic hit on revenue for Snapchat came quite late in the quarter, following a strong Jan and Feb, much as can be seen in Google and Facebook’s recent results.
Therefore, Snap managed to come through relatively unscathed with revenue up 44% YoY, reporting $462 million and besting Wall Street’s tempered expectations of around $430 million.
However, Snap CFO, Derek Andersen, said the group estimated that year-over-year revenue growth stood at 15% from the beginning of the month to April 19, but 11% in the most recent week.
Much like the other silicon tech giants. The real ad revenue hit will be felt in this upcoming quarter’s results, if at all.
As elsewhere, Snap reported a spike in video and voice calling usage, up 50% during late March, compared with late February.
Snapchatters were communicating through texts 50% more, and snaps were up 44%. Ad engagement on app installs increased 36%, while there was also a 19% increase in swipe-up rates overall during late March compared to late February.
Good Value Opportunities Abound
As budgets get tightened across the board, smaller ad players, such as Snapchat, are inevitably going to feel some pain.
However, there are two things which may yet keep the wolf from the door: 1. It’s really cheap 2. It converts well for direct response advertisers
David Shaw, head of international product marketing at Snapchat Oct 2019
“A big reason we’re growing budgets is down to the performance advertisers are seeing off the back of low cost per views and efficient cost per thousand for impressions.
It’s allowed us to play for budgets where we may not have been able to do in the past.
Social advertising has been a big pool we’ve pulled ad revenue from, but we’re also starting to see online video buyers become more willing to test Snapchat outside of the paid social space.”
While marketers locally have been sluggish in their uptake, brands in the UK have leapt on board to take advantage of good value opportunities, reported Digiday last year.
Thankfully for Ev Spiegel, direct response advertising has nearly doubled as a share of Snapchat’s revenue over the past two years and represents more than half of its total revenue.
Meanwhile, for brand marketers and govt organisations, Snapchat offers a bargain means to reach millions of users aged 13 – 25, hard to reach on other media platforms.