With falling revenues and huge net losses, will Snapchat’s latest gamble pay off?
What a commotion Snapchat caused when it first broke into the social landscape, in such a visually-driven generation the new style of photo sharing app gathered huge excitement. Everywhere you looked someone would be trying to capture something funny or their favourite song at a gig – any sort of memory was being logged as a Snapchat story.
Understandable then, when it came to setting their marketing predictions for the quarter just gone, they were extremely optimistic. Things looked good and all seemed well, however, with an increasingly-criticised interface and hard to navigate advertising software, the situation wasn’t all as straightforward as it seemed.
The cracks became a gaping hole when publishing their revenue for the quarter, missing estimates by nearly $10m and a reported net loss of $2.2bn. Not only has Snapchat struggled financially, but user growth has also slowed a considerable amount.
That hit has come largely courtesy of Facebook’s attempts to quash Snapchat’s growth, mainly through Instagram’s new features which, for anyone who has used them will know, are more or less identical to those of Snapchat.
‘Spectacles’ then, a kind of more stylish alternative to Google Glass, could be Snapchat’s attempt to claw back relevancy that is undoubtedly wavering amongst their audience. If Google Glass is anything to go by though, they face an uphill battle.
Criticised for being mostly, well, just a bit weird and creepy, Google’s gadget was dismissed almost as quickly as it was launched. Hence why Snapchat is marketing its product as something much more fashionable – a quirky outfit accessory perfect for creating memories – but there’s only so much a clever marketing campaign can do to disguise the fact it may not actually be all that far on from its Google predecessor.
Is the writing on the wall for Snapchat then? The signs suggest the platform is on its way to falling into the category of another social media fad. Much like Vine, which also closed its doors not too long ago shortly after being one of the most regularly used and raved about bits of mobile kit.
Snapchat’s only hope may lie in convincing advertisers that theirs is in fact a viable advertising platform – one that can compete with Instagram for both the advertisers and consumers alike. A near impossible task when taking into account Facebook and Instagram’s buying clout and the fact that apparently 62% of users say they ‘always’ or ‘often’ skip ads on the platform.
We’ll hold off on our full judgement of ‘Spectacles’ though, as we’ve ordered a set for MAG HQ to have a try for ourselves! Follow us on Twitter for our thoughts and stay tuned for our review coming soon…
Words by Brad Lengden.