Snapchat IPO’d today for US$3B and it’s something that a lot of people have been waiting for with baited breath.
They’ve kept their cards pretty close to their chest up until now because they could, but now they have gone public we get a peek behind the curtain. And it’s pretty telling.
We’ve trawled through the IPO and picked out some interesting facts for anyone who is interested in looking at Snapchat for their social media mix.
Here’s what we’ve found that you might find interesting:
1) They IPO’s for US$3B which is what Facebook offered to to buy them for in 2013. Should they have taken the money and run years ago?
2) Their growth rate has slowed. They had 160 million daily users in 2016 which is up from 107 million the year before. But before you celebrate that too much, to put that in perspective, Facebook has 1.87B users and Instagram has 600M active users. Snap’s growth rate has decelerated from 17% in Q1 2016 to 3% in Q4.
3) The key demographic for Snap is 18-34 and they note in their release that “Snapchat also may not be able to penetrate other demographics in a meaningful manner” which can be limiting to the platform’s potential.
But probably the most damning thing that Snap Inc included in their IPO docs was the admission about their operating potential:
“We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.”
So what does this mean for you as a marketer and advertisers? Snap Inc owns the 18-35 market but their reach is not as large as Instagram or Facebook. They’re not accessible in any paid advertising way to everyday marketers with no real ad platform. If you want to reach this demo you should make it a part of your channel mix, but at the moment it’s content only.