While Meta struggles with innovation and attracting younger users, at Snapchat, innovation and Gen Z users are in high supply. So why is the company struggling?
“Snap doesn’t lack when it comes to innovation,” our analyst Jasmine Enberg said on a recent episode of our “Behind the Numbers” podcast. “But there are serious questions about the health of its core business, and it really needs to focus on turning those things around.”
Here’s where it stands:
Fighting to monetize: Snapchat is primarily a messaging app, making it difficult to monetize, said Enberg.
Gen Z pros and cons: Snapchat is a favorite for Gen Z users, with more teens and young adults spending more time on the platform. “It’s somehow always able to squeeze daily user growth, and I think that’s a testament to its staying power among Gen Z,” said Enberg.
Snapchat is still small: At $2.08 billion in US ad revenues this year, Snapchat is behind Meta ($51.35 billion), TikTok ($6.19 billion), LinkedIn ($3.95 billion), and Pinterest ($2.24 billion).
For advertisers’ consideration: “Snap introduced My AI really as an engagement play. But what I think is really interesting about it now is that it is an advertising play as well,” said Enberg.
The company introduced new AI-driven ads at NewFronts earlier this month. These spots are worth checking out because they offer insight into what AI chat search ads could look like.
But Snapchat won’t be playing in the same ad league as Meta anytime soon. Advertisers should think of it as a playground for testing ad innovations, but save the big bucks for more promising platforms.
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