Snapchat is a video messaging app which allows users to record and send so called ‘snaps’ that are only viewable for a set duration between one to 10 seconds after which they are automatically deleted. The app was developed by Stanford University students Evan Spiegel, Bobby Murphy, and Reggie Brown in 2011.
Snapchat enables users to send video messages which self-destruct after 10 seconds max
Key Snapchat Data Points
- Snapchat has 100m active users with 400m snaps sent every day (Source: Mashable)
- The company is currently valued at $19bn (Source: Fortune)
- Snapchat Discover is the app’s way to generate ad revenue (Source: MoneyMorning)
- Discover cost per thousand views CPM is currently claimed to be $100 (Source: Recode)
- Snapchat’s core users are 13-24 year-olds (Source: Statista)
- 70% of its users are female, versus 30% male (Source: Wall Street Journal)
- It ranks fourth among the top social media sharing site (Source: BusinessInsider)
- 77% of college students use the app (Source: Mashable)
- 50% of college students use the app as a means of communication (Source: Mashable)
- Only 1% of advertisers are currently using Snapchat (Source: Mashable)
- Brands are charged $750,000 per day to advertise on Snapchat (Source: Adweek)
As of August 2014, the app had 100m active users, with 400m snaps sent every day. In addition, Snapchat Stories, a way to view a user’s collection for longer than a few seconds, are being viewed 500m times a day.
The company initially raised $485,000 in 2012 led by Lightspeed Venture Partners, followed by multiple rounds throughout 2013 and a substantial $485m D series in 2014 from August Capital, Yahoo, GIC and Kleiner Perkins Caufield & Byers. In February 2015, it was reported that Snapchat was raising yet another round at a $19bn valuation. This would make it the third most-valuable tech company not trading publicly. The company does not yet turn a profit, but recently added Snapchat Discover with which it hopes to establish itself as more of a media company. Discover allows users to browse media content from partners such as CNN and Cosmopolitan. Snapchat then keeps 40% of ad revenue it sells to publishers on Discover. Recode stated that Discover ad inventory costs $100 CPM (cost per thousand views), far exceeding the rates of major competitors such as Youtube. However, according to research from BusinessInsider, millennials, a core userbase of Snapchat, remain skeptical about Discover.
Statista confirms the large userbase of millennials. 50% of Snapchat users are below the age of 18, followed by 31% within the 18-24 bracket and just 19% above the age of 25.
Snapchat’s core users are below the age of 24
According to Snapchat, the app has 70% of female users, compared to 30% of men.
A report by BI Intelligence compared the top photo sharing sites in May 2013. It found that whilst Facebook still generates the most daily photo uploads (64% of 544m uploads per day), Snapchat follows at 28%, generating 21% more uploads than Instagram.
Source: BI Intelligence
With social media being a core activity among internet users and 60% of that activity happening on smartphones, BI Intelligence research highlighted the top social apps, with Snapchat falling into fourth place, ahead of WhatsApp.
Snapchat is one of the leading social media apps globally
Source: BI Intelligence
Data collected by Sumpto, which questioned over 1,600 social media users across US colleges, highlights that 77% of college students use Snapchat at least once a day with evenings being a prime time for 81% of users as well as weekends (70%).
77% of college students use Snapchat
The study adds that 37% of college students say they engage with Snapchat creatively, followed by 50% who are using the app as a means of communication. 2% admitted to sending sexy messages through Snapchat.
Most Snapchat users engage in the app to communicate
In addition, 35% of students believe Snapchat to offer the most amount of privacy across other social networks, an increasingly important criteria for millennial social media users.
Given its popularity among youths, it comes as no surprise that Snapchat became the top downloaded non-game app in the iOS Store in May 2013, trading places with Youtube for the lead.
App Annie ranking of top iOS apps May 2013
Despite it’s strong millennial userbase, marketers are yet to make use of the power that Snapchat advertising could potentially leverage. According to Mashable, only 1% of advertisers use Snapchat. Facebook, Twitter and LinkedIn are leading the chart in B2C and B2B engagement.
Only 1% of marketers use Snapchat
However, the Sumpto research finds that marketers may have it all wrong and should start paying attention to Snapchat. It shows that 45% of college students would actually open a snap from an unknown brand and 73% of them would open snaps from a known brand. Another 69% of students would even add a known brand as their friend on Snapchat, opening up brands to a more personal stream of engagement with their customers. Promotions such as sales offers (67%) and coupons (58%) were the preferred information that students wish to be sent from brands.
Brand engagement on Snapchat could be huge
Given its unique user base and high engagement rates, some of the marketers that are already using Snapchat include Karmaloop, a streetwear retailer, BMW, Taco Bell as well as GrubHub, the food delivery service.
Snapchat score of selected brands
However, the engagement doesn’t come cheap, according to industry sources which say that brands are charged $750,000 per day for the new ads. This turns away smaller agencies and focusses only on fewer, but larger players. McDonalds and Universal are two examples of recent Snapchat advertisers.
But the app is not just great for brands. Top Snapchat users with large amounts of followers are being paid up to $100,000 per week to engage on the app. Jerome Jarre, Shaun McBride and Chris Carmichael are viral sensations on the app with a combined following of two million users.
Whether or not Snapchat Discover can become a success for the platform remains to be seen, but given its growth and unique engagement and targeting large brands have a lot to gain from a social media strategy that incorporates the app.