Instagram, the Facebook-owned social networking platform, is growing steadily and has managed to bring Snapchat, an image messaging mobile application started by former students at Stanford University, to a screeching halt. Or so it would seem.
One of the significant advantages of Instagram, especially for advertisers, is its integration with the larger Facebook Audience Network (FAN). Recently, Instagram surpassed Snapchat with more people using it daily. It is also increasingly attracting more ad dollars.
There has also been a tremendous jump in user time spent on Instagram, and it now averages 32 minutes per day for those under 25, and 24 minutes per day for those 25 and over. Its rival Snapchat’s monthly active users, in contrast, have started to slow down. It has reduced from 17.2% in the previous quarter to the current 5%, shaking down its share price from $17 at IPO to $13.
Clients seem to have started to de-prioritize Snapchat in terms of ad value. Meanwhile, Instagram has 166 million daily users compared to Instagram Stories, which now has 250 million and is rapidly expanding.
It is a well-known fact that Instagram is backed by Facebook’s massive infrastructure and data, enabling marketers to reach out to very specific audiences. It also provides marketers with a unified dashboard for buying and tracking ads, with better analytics.
“We have clients proactively asking us to do more on Instagram Stories every week,” said Ben Kunz, SVP of marketing and content at media agency Mediassociates, whose clients include HP, Marriott and Black & Decker, among others. “I can’t recall a similar conversation related to Snapchat.”
At the same time, Snapchat is still trying to make its way up and hasn’t completely collapsed; this is more of a pause in its growth story. Snapchat’s younger audience continues to spend an average of 25-30 minutes every day, which is a draw for advertisers. Media buyers continue to use Snapchat, but it may not be their primary platform.
Snap Inc. continues with its investments and efforts to compete for ad dollars, and to improve its performance metrics. As part of this effort, Snap announced a partnership with Neustar on Tuesday.
As rightly pointed out by Kunz, Snapchat’s geotargeting is the key differentiator at this point: with the help of Four Square data, the geotargeting helps target people who visited a particular network location, while Facebook can only target people’s interests and demographics. It might be a hard sell, but it is definitely a differentiator.
It is still early to rule out Snap as a serious player in monetized social media. Industry experts are closely mapping the benefits, and some healthy rivalry with Instagram is a good thing.