Not long after I celebrated my 29th birthday, Snapchat celebrated a big day as well; on March 2nd 2017 Snapchat became a publicly owned company, Snap Inc. And for just $17 you could own a share in the newly public “camera” company. Each of those $17 shares created an initial public offering of $3.4 billion dollars.
The question remains however, can those billions of dollars invested by stockholders be sustained without advertising dollars? Can those advertising dollars be sustained without users over the age of 25? Advertisers, of course, are looking to market to consumers who will by their product. However, nearly a quarter of Snappers are minors, and one common thread for a majority of teens is they don’t have their own disposable income.
There may be a ray of hope though, because according to stats from statista.com 37% of users are in the college age range of 18-24 and 26% are in the 25-34 years of age range. If Snap Inc. can find a way to bring in more 25-34-year-olds they may remain a financially viable technology. However, even Snap Inc. does admit the challenge of reaching and retaining this demographic.
“This demographic may be less brand loyal and more likely to follow trends than other demographics. These factors may lead users to switch to another product, which would negatively affect our user retention, growth, and engagement. Snapchat also may not be able to penetrate other demographics in a meaningful manner.” – Snap Inc.’s SEC filing
The company seems to be very aware that its vitality depends heavily on its users. In Snap Inc.’s filing with the Securities and Exchange Commission ahead of its IPO the company states:
“Our ecosystem of users, advertisers, and partners depends on the engagement of our user base. We anticipate that the growth rate of our user base will decline over time. If we fail to retain current users or add new users, or if our users engage less with Snapchat, our business would be seriously harmed.” – Snap Inc.’s SEC filing
The portion of Snap Inc.’s SEC filing that sticks out most to me is the following:
“If current and potential users do not perceive our products to be fun, engaging, and useful, we may not be able to attract new users, retain existing users, or maintain or increase the frequency and duration of their engagement.” – Snap Inc. SEC filing
While this may be true of any social medium it sticks out to me because I am one of those “current and potential users” who does not perceive Snapchat to be fun, engaging or useful. I know… insert shocked/horrified emoji … A millennial who doesn’t like Snapchat. I do have an account and have already at least twice downloaded, deleted and re-downloaded the app after hearing more hype surrounding the IPO. I still have yet to follow what the hype is all about.
While some people find barfing rainbows and creepy puppy masks to be fun, I really just find it a bit too strange. As for being engaging, I’m sure if this is simply measured by how much time people waste in the app then Snap will be incredibly successful. I think of how the other day, while trying to figure out various aspects of Snapchat, I watched a “story” my housemate posted of her day. I watched the entire series of short “snaps” or videos all the way through, so I guess one could say I was engaged. However, in reality I just kept watching thinking there would be some point at which I understood why she had posted the videos. There wasn’t, or at least not a point that I could understand.
Ultimately, it is the term “useful” which I so far find simply laughable. I wonder if part of the reason Snapchat is most popular among users 24-years-old and younger, is that this crowd has the most spare time on its hands. When the social media environment is already saturated with Facebook, Twitter and Instagram, which see a more evenly distributed age-range of users, Snapchat will have to convince its 25-year-old and older users to spend more of their already limited spare time using yet one more platform or to wholly switch. I won’t pretend to think that no one finds Snapchat useful. I know that millions do, but if Snapchat wants to really get me (and presumably many others of the “older” Millennial population) on board I think it has a ways to go.
So while Snapchat may need me (my account, my attention, my actively wasted time) in order to help keep advertisers happy and its stock price from plummeting, I am wholly unconvinced (in a world where I already waste too much “spare” time) that I have any need for Snapchat. Could that change? Maybe, and kudos to Snapchat if it does.
Written by Unconvinced Millennial:
Kit Cross, Graduate Student
Master of Arts in Emerging Media
Loyola University Maryland