Snapchat has posted its latest earnings report, showing steady increases in users and revenue, with the platform continuing to see strong take up in markets outside the US, and ongoing growth of its TikTok-like Spotlight option.
First off, on usage – in Q3, Snapchat rose to 306 million daily active users, its first time above 300 million DAU.
It’s the app’s fourth consecutive quarter of more than 20% YoY growth in usage, with Snap seeing its biggest rise, once again, in the ‘Rest of World’ category, which grew by 10 million in the period.
Snap’s seen particularly strong growth in India this year, as more Indian users come online, and digital connectivity advances in the region. That’s helped Snap expand its opportunities, while Snap CEO Evan Spiegel also notes that the app’s monthly active user count is now above 500 million:
“Including more than 75% of 13 to 34 year-olds in the United States, Canada, France, the UK, Australia, and the Netherlands”.
Snap’s reach to younger demographics is huge, and remains the key element of its success. In terms of specific usage trends, however, Snap does note that user-generated Stories continue to see year-over-year declines in overall time spent.
Where Snap is seeing success is with Spotlight, its short-form video option, and its Discover programming, which continues to drive increased usage.
Snap says that daily Spotlight uploads have more than doubled over last quarter, while daily time spent per user with the option continues to increase.
Part of that growth has been Snapchat’s Spotlight funding programming, which initially saw it allocating $1 million in total cash prizes every day to the top-performing Spotlight clips. Snap revised that approach in June, switching to the more vague ‘millions per month’ in payments, and that update has helped reduce Snap’s overall costs, while Spotlight engagement has continued to grow, which is a good sign for the function, and the funding program as a kick-starter for engagement.
More recently, Snap announced another revision to its Spotlight payments, which will see users paid for taking part in more prescriptive Spotlight Challenges, which could be a way to better guide user behavior, and generate more engagement with the option. Either way, the steady growth of Spotlight once again underlines the broader TikTok effect on in-app engagement, and how users are increasingly looking to engage on social platforms.
Snap’s Discover programming, meanwhile, continues to attract more viewers.
As per Snap:
“Our content partners continue to find success on our platform, with 15 different partners each reaching over 50 million Snapchatters this quarter. Two of our new Snap Originals launched this quarter, “Meme Mom” and “Honestly Loren”, and each reached over 10 million viewers.”
Expanding on this, Snap announced a new round of Discover shows this week, including, interestingly, a new show with TikTok influencer Addison Rae.
Snap has also worked with Charli D’Amelio on exclusive content, another star who found fame on TikTok, and it’ll be interesting to see whether Snap continues to poach talent from TikTok, in a bid to boost Discover usage on the back of TikTok’s popularity and reach.
“We’re also introducing more locally-relevant content as our community grows worldwide. In France, we partnered with M6, our first major French broadcast partner for entertainment content, to bring 400 episodes of their TV shows to Snapchat. In MENA, we partnered with ITP Media Group to bring more than 200 Show episodes from some of the region’s biggest and most influential creators.”
That local programming provides another means for Snap to boost traction in more markets, and as you can see from the app’s average revenue per user chart, it still has a lot of opportunity to expand its revenue potential in more regions.
In terms of overall revenue, Snapchat had its first ever quarter of more than $1 billion in revenue, highlighting its solidifying ad eco-system.
And again you can see the potential, with the vast majority of Snap’s revenue coming from the US, while it’s still building out its presence in other markets. Those have remained steady, but there’s more opportunity to come, which is a good sign for Snap’s ongoing success.
One of the key impediments to larger revenue growth, however, was Apple’s data restricting ATT update, which Snap says had a bigger impact than it had anticipated.
“The new Apple provided [alternative] measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS. We have remained very focused on driving ROI for our advertising partners, and we continue to see strong, consistent performance on our ad platform based on first-party data and conversion lift studies, and are working on building flexible first-party tooling and measurement solutions to serve the diverse needs of our advertising partners.”
In order to mitigate these impacts, Snapchat says that it’s focused on developing additional first party, privacy-safe solutions to help ad partners measure their campaigns effectively within the parameters of the new Apple restrictions. Which, really, every platform is now working to develop in light of the new ad targeting limits.
Spiegel also gave a slight nod to Snap’s coming AR-enabled Spectacles in his prepared remarks, though there’s still no information on a release date as yet.
“In the longer term, we are investing in new ways people can interact with the physical world around them, including using our AR-enabled Spectacles.”
The competition is heating up in this space, with Facebook launching its Ray Ban Stories collaboration, which is not AR-enabled yet, while Apple is also reportedly close to releasing its first AR glasses too. Given the massive discrepancy in resources, you would expect Snap to be a fair way behind the bigger players in its AR glasses development, but the company has remained at the forefront of the AR shift, and could be well-placed to capitalize on the next stage too, with its coming Spectacles update.
It’s a pretty good report for Snap, with solid results, despite challenges, and good indicators on engagement growth. The app, over time, has found its niche, and given the prominent role that it now plays in connecting younger audiences, and the continued development of its AR tools, there’s a lot to like about Snap’s ongoing potential.
You can read Snapchat’s full Q3 2021 performance update here.
Source: www.socialmediatoday.com, originally published on 2021-10-21 16:19:33