Today nearly nine in ten (88%) UK adults are online and as the population becomes more mobile, social media is adapting, leading to the continued growth of messaging platforms such as WhatsApp. So, it shouldn’t be a surprise that Snap, the parent of Snapchat, has seen its revenue climb 44% year-on-year. Except for the first time, Snapchat’s daily active users has fallen by 3 million.
Since Snapchat’s figures were released this morning, there has been plenty of analysis. One of the most useful articles is Business Insider’s claiming that “Snapchat is stalling out”. Apparently the loses will be even greater in the current quarter. Is Snapchat a passing fad?
Whilst Snapchat may blame the poor community response to its app redesign, there is something else bigger at play here; the struggle to compete in a mature social media market. Socialbakers were quick off the mark to note that Snapchat is lagging behind its rivals, WhatsApp and Instagram Stories.
Yuval Ben-Itzhak, CEO, Socialbakers commented,
“Revenue growth shows that the company is recovering from its weaker performance in Q1 and looks to be a sign that the platform is becoming more appealing to advertisers. Snap’s partnership with Nielsen to offer deeper audience targeting capabilities may make the platform more appealing to CPG brands moving forward.
“However, the platform is still a long way behind its rivals Facebook and Instagram in terms of advertising dollars and audience size, and its other businesses like Spectacles and Snapcash haven’t achieved much success so far. Like many of the social platforms today, Snap is struggling with user growth. But the future may be looking brighter for Snap.”
Some signs that social media has matured:
- Innovative new ways for social media to connect people is no longer the focus, instead monetising through advertising revenue is
- Major social media sites are showing signs of slowing user growth, as reaching new markets becomes the priority
- New entrants struggle to gain share of voice and build sustainable online communities
It’s time for social sites to expand into new markets, find a niche to profit from, or do something radically different.
The ad-free alternative to Facebook, Ello, recently walked through a couple of these steps; initially launching as a radically different option to advertisement supported sites, but recently settling on the niche of building an art community.
This isn’t the end of social media. Far from it, it’s now the mainstream. It will continue to be a disruptive force and opportunity for organisations. However, the land grab is almost over.