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Snapchat Posts Mixed Results in Latest Earnings Update

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Snapchat Posts Mixed Results in Latest Earnings Update

Snapchat has shared its latest performance update, reporting an increase in users, but slower ad growth as a result of ongoing challenges in the digital ads market.

It’s a mixed report – first off, on users: Snapchat added 16 million more daily active users for the quarter, taking it to 363 million DAU.

As you can see in these charts, Snap is still seeing the majority of its growth in the ‘Rest of World’ category, where it’s added 45 million users year-over-year.

The app has seen significant growth in India, where advancing mobile adoption and improving connectivity are helping it expand its reach and presence. Which is a positive for the app’s longer-term potential, but it doesn’t provide a major boost for the app’s revenue right now, at least not in the way that adding users in the US would.

Snap also says that overall time spent watching content in the app continues to rise, driven primarily by Discover and Spotlight.

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“We grew global time spent across our content platforms by continuing to invest in personalization, driving more subscriptions to creator content, improving content ranking through better understanding of new Snapchatter interests, scaling our Creator and Partner ecosystem, and investing in operations to maximize return on content supply and capacity.”

On Spotlight, specifically, Snap says that total time spent viewing Spotlight content has increased by 55% year-over-year, while over 300 million users now engage with Spotlight content every month.

Snapchat Q3 2022 report

Like all platforms, short-form video has been a winner for Snap, and while Spotlight is pretty much a direct copy of TikTok, the numbers here underline why the platforms do latch onto significant trends like this, as a means to maximize engagement.

It’s not original, no, but it works in keeping users in-app for longer, as opposed to them switching to another platform for the same.

And given that Snap has also seen a continued downturn in engagement with Friend Stories, it needs to find new ways to keep people interacting, and spending time in app, even if content from their direct connections isn’t as big a lure.

Though this is a concerning trend note:

“Total time spent watching content in the United States decreased 5% year-over-year as the diminished depth of engagement with Friend Stories was not fully offset by the growth in viewership and growth in time spent with Discover and Spotlight in the US.”

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That’s especially relevant when you look at Snap’s revenue stats:

Snapchat Q3 2022 report

As you can see here, while Snap brought in $1.13 billion for the quarter – a 6% year-over-year increase – its income is hugely reliant on the US market.

If Snap’s seeing a downturn in US user engagement, that’s a problem, and it’ll be an important element to track in future performance updates.

“Our business continued to face significant headwinds in the third quarter, and we took action to further focus our business on our three strategic priorities: growing our community and deepening their engagement with our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality.”

Hit by impacts as a result of Apple’s ATT update, and the global downturn in digital ad spend, Snap’s revenue growth isn’t at the levels that it, or the market, would hope. But it remains confident in its strategy, which is delivering more active users.

“Advertising revenues follow engagement, so while we are facing near-term headwinds to our revenue growth, we remain optimistic about our long-term opportunity based on the growth of our community and engagement.”

Snap’s also looking to tap into the popularity of Spotlight as another ad driver, with a range of new ad tests.

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“We believe that Spotlight offers an exciting new way for brands to experiment with video creative and learn how to make content that inspires the Snapchat community. We are also working on new tools that enable businesses to easily promote their most engaging Spotlight content, drive conversions, and measure their success with Ads Manager.”

That would also, presumably, involve a level of revenue share for Spotlight creators, who currently don’t have a direct monetization pathway, other than Snap’s Spotlight Rewards program.

Snapchat also says that it’s ‘using this period of reduced demand’ to implement upgrades to its ad delivery platform and auction dynamics.

Snapchat’s also shared a new stat on Snapchat+ subscriptions, noting that it now has more than 1.5 million paying S+ subscribers, up from the million it reported back in August.

Snapchat Q3 2022 report

It’s hard to say whether add-on subscription elements will become a sustainable revenue pathway for social apps, but Snapchat+ is providing some relief in offsetting Snap’s ad losses, which is a positive for the platform at this stage.

More recently, Snap has also made engaging older audiences a focus, which has produced some results:

Daily average time spent for Snapchatters aged 35 and older engaging with Shows and Publisher content increased by more than 40% year-over-year.”

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If Snap can get this element right, and keep more older users in the app, as opposed to seeing them drift off from what’s traditionally been a younger platform, that could help it reinforce its growth numbers – and as Snap notes, that, eventually, should see ad revenue increase in-step.

But Snap’s real future may well lie in AR, where it remains the market leader in most respects.

Snapchat Q3 2022 report

Snap’s AR experiences are more refined, more engaging, and more likely to go viral than those in other apps. Whenever a new AR trend comes up – from dancing hotdogs, to aged up effects, to anime characters, to crying face, it’s Snapchat that’s the source, while its advanced AR tools for shopping are also opening up new opportunities for brands across the board.

There are some concerning signs here for Snapchat’s overall usage, and less income leaves less money for investment in its own AR glasses. But Snap’s connection with AR developers, and internal creative nous, leaves it well-positioned to remain a critical platform in the next stage of digital connection, even the metaverse, which will require 3D objects and experiences.

Maybe, then, Snapchat’s future isn’t even the app itself. I mean, it has long called itself a camera company, not a social app.

Overall, it’s difficult to take a lot from Snap’s latest report, because overall market trends are weighing on its results, and its relative growth stats look reasonably solid.

But lower engagement in key markets is a concern, even with more users coming in. I would say that this is the biggest takeaway here, that Snap may be seeing the start of a broader usage shift away from the app.

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It’s too early to mark this as a trend, but Snap may need to evolve its business beyond the app to truly maximize its potential.

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.

The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.

According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.

Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.

Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.

The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.

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This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.

Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.

As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?

Only time will tell.

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Catering to specific audience boosts your business, says accountant turned coach

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Catering to specific audience boosts your business, says accountant turned coach

While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.

When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.

“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.

Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.

“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.” 

“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.

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“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.

Watch the video for more of Sandra Parker’s biggest lessons.

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Instagram Tests Live-Stream Games to Enhance Engagement

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Instagram Tests Live-Stream Games to Enhance Engagement

Instagram’s testing out some new options to help spice up your live-streams in the app, with some live broadcasters now able to select a game that they can play with viewers in-stream.

As you can see in these example screens, posted by Ahmed Ghanem, some creators now have the option to play either “This or That”, a question and answer prompt that you can share with your viewers, or “Trivia”, to generate more engagement within your IG live-streams.

That could be a simple way to spark more conversation and interaction, which could then lead into further engagement opportunities from your live audience.

Meta’s been exploring more ways to make live-streaming a bigger consideration for IG creators, with a view to live-streams potentially catching on with more users.

That includes the gradual expansion of its “Stars” live-stream donation program, giving more creators in more regions a means to accept donations from live-stream viewers, while back in December, Instagram also added some new options to make it easier to go live using third-party tools via desktop PCs.

Live streaming has been a major shift in China, where shopping live-streams, in particular, have led to massive opportunities for streaming platforms. They haven’t caught on in the same way in Western regions, but as TikTok and YouTube look to push live-stream adoption, there is still a chance that they will become a much bigger element in future.

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Which is why IG is also trying to stay in touch, and add more ways for its creators to engage via streams. Live-stream games is another element within this, which could make this a better community-building, and potentially sales-driving option.

We’ve asked Instagram for more information on this test, and we’ll update this post if/when we hear back.

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