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Snapchat Reaches 347 Million Daily Actives, Sees Slower Revenue Growth in Q2

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Snapchat Adds 13 Million More Users in Q1, Sees Steady Increase in Revenue

After warning investors back in May that its results would be impacted by fast-evolving market conditions, Snap Inc. has today posted its Q2 2022 numbers, which show a steady increase in usage, but slower growth on the revenue side.

First off, on users – Snapchat added 15 million more users in Q2, taking it up to 347 million daily actives.

Though as you can see, a concerning element on this front is that Snapchat saw virtually no growth in the North American market, which is by far its biggest revenue driver.

Snapchat Q2 2022

Average revenue per user remains relatively low in other markets, especially in the ‘Rest of the World’ category, where Snap added the majority of its new users.

Snapchat has seen significant growth in India, where advancing mobile adoption and connectivity are helping it expand its reach and presence. Which is a positive for the app’s longer term growth plans, 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.

As such, the stagnation in US and European markets could be further cause for concern among investors – though Snap has also sought to restate its future-looking value via a new presentation on its expansion plans.

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Snapchat Q2 2022

As you can see here, Snap’s touting its expanding reach, in many regions, as a key value proposition, while it’s also highlighted the importance of reaching this audience, based on key life milestones and related purchase activity.

Snapchat Q2 2022

Which is important, because as noted, Snap’s Q2 revenue results have been impacted by shifting market conditions.

Snapchat Q2 2022

As you can see here, Snap’s revenue did grow, reaching $1.11 billion for the quarter, but the rate of growth is much slower than the company has seen thus far.

As per Snap:

“We observed a 25 percentage point deceleration in revenue growth quarter-over-quarter, with revenue decelerating as we moved through the quarter. The deceleration in revenue growth was observed across both our direct-response and brand advertising businesses, even as direct-response advertising grew modestly faster. Additionally, we continued to see demand grow faster for mid and upper-funnel objectives while growing relatively slower for lower-funnel app-based goal-based bidding (GBB) that have been most directly impacted by platform policy changes.”

Snap’s leadership team has also sought to reassure investors that it is looking to address this, despite these evolving impacts.

“The second quarter of 2022 proved more challenging than we expected […] While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect the scale of our ambition. We are not satisfied with the results we are delivering, regardless of the current headwinds.”

In order to address this, Snap says that it will look to maximize its community growth initiatives, while also investing heavily in its direct-response ad offerings, in order to deliver ‘measurable returns on advertising spending’.

Whether any of that will change things is hard to say, but Snap has been proactive in advising the market of its position, and it’s keen to underline the fact that it is working to evolve its systems to maximize its revenue benefit.

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Though, if it can’t grow its audience in the key markets, that may not matter, at least for some time.

The longer-term question then is how long will Snapchat be relevant, and how much can Snap invest in new advances, like AR, in order to stay in touch with the next key trends?

Snapchat is currently the leader in the AR space, with its users spending a lot of time using its AR Lenses.

Snapchat Q2 2022

Snapchat is generally the originator of each big AR trend, while the app is also developing its own AR glasses to compete with Apple, Meta and Google in the space.

The question, then, is whether Snap will have the capacity to maintain these developments while also delivering growth. It is still upping its development costs, but whether that’s sustainable is another query.

Snapchat Q2 2022

The bottom line is that Snapchat is seeing positive growth developments, which show much potential for the future – but really, it depends on how far off that future is, and how much Snap can maximize its revenue potential in emerging markets.

Because it’s not seeing big growth in key areas. And at some stage, the downward pressure on revenue will have to meet the upward drive on costs, which could force Snap to make some tough calls on how it builds (or doesn’t) for the next stage.

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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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