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Is Snapchat Going Out of Business?

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Snapchat is a popular social media platform with over 200 million users. You could say it’s huge in popularity. It’s a form of communication that allows you to send photos or videos for only one recipient, known as “Snaps”. It has found the perfect balance between sending Snaps and keeping everything fun and interesting for uploaders.

Since its launch in 2011, Snapchat has gone on to create 101 features for its users to enjoy, which includes attributes like the introduction of Spectacles, Stories, voice filters, Avatars, Bitmoji TV, and Spotlight. Snapchat added payments to their system; a partnership with Square that allowed users to purchase things like stickers and lenses on Snapchat without leaving the app or social network. A year later, the company made $40 million in revenue from this feature. In order to make up for the massive losses when it comes to money that is generated from Snapchat, they have been looking at other ways of generating revenue as well.

Snapchat has grown from a simple photo and video sharing app to a content production powerhouse. As of 2020, Snapchat is paying over $1 million daily to creators of the highest-performing content. Spotlight defines how users can find content on Snapchat. This includes Stories, which offer bite-sized entertainment for users.

The company’s business model is based on enticing advertisers to pay large sums of money for sponsored lenses, stickers and other features available in its Stories feature — which lets users add text and drawings to photos they take on the app.

However, many advertisers are finding that they are not getting their money’s worth from Snapchat ads because there aren’t enough impressions or clicks on those ads to make up for the costs associated with running them through the platform. And so many brands have decided that it’s simply not worth paying high prices for ads on Snapchat anymore.

In order to stay in business and gain a vast number of followers, Snap has placed a great deal of emphasis on augmented reality and keeps a close eye, spotlighting its TikTok competitor. At the moment, Snap’s AR mainly enables their user to add photo filters, keeping in touch with its originality and overlay images to their messages, and a total estimated number of 200 million users engage with Snap’s AR tech on a daily basis, the company itself states.

“But Snap sees a bigger role for AR and aims to create tech that would allow people to shop virtually”

Snapchat is a great choice for marketers because it’s still young, not as mainstream as Instagram and Facebook, and snapchat usage has consistently risen every year including a 52% increase in daily active users. 136 million Americans use the platform each day, up from only 70 million in 2017.

The average user spends nearly one hour on Snapchat every day, and over 70% of daily active users are outside of the U.S.. Brands with a presence on the platform can still reach millions of people with their content each day, whether you’re connecting with your fans or widening your reach, an influencer working with a brand can help generate lots of interaction and attention to improve your brand awareness and sales performance.

Important Snapchat User Statistics

  • Snapchat currently has 293 million daily active users worldwide.

  • 67.58% of Snapchat daily active users are based outside of North America.

  • Snapchat reaches over 75% of the millennial and Gen Z population in the US.

  • On average, 5 billion Snaps are created every day.

  • Market capitalization of Snap Inc. is $118.99 billion.

  • Snapchat generated $2.5 billion in annual revenue in 2020.

  • Snapchat holds 872 patents

Snapchat's ad revenue also continues to grow each year, with the platform generating more than $1 billion in ad revenue in 2017 alone. The platform earned a total of $2 billion from ads in 2018 and is expected to generate even more money this year.

This means that brands are becoming increasingly interested in Snapchat as an advertising option, but what does this mean for businesses?

Snapchat has been around for years, yet it still manages to shock us with its stats. The platform keeps growing and in some ways, it's difficult not to see it as a competitor. Since Snapchat allows you to build relationships with direct audiences, it’s a viable alternative to platforms such as Twitter when marketing your brand. And, of course, this blog is less about Snapchat going out of business and more about how these statistics can help you grow your social media reach. So you’ve decided to use Snapchat as a platform to connect with your audience. Awesome! It’s never too late to start building relationships with the people who care most about your brand.


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