Snapchat Pioneered The Medium. Why Are Top Social Influencers Turning Away?
The Facebook-owned Instagram Stories platform has risen relentlessly since its launch almost a year ago, costing Snapchat its popularity in a medium it largely pioneered, CNBC reports.
Facebook’s introduction of Instagram Stories in August 2016 crippled Snapchat’s user growth by 82 percent almost immediately, according to influencer marketing agency mediakix. Just eight months after launch, Instagram stories officially bypassed Snapchat in popularity, reaching 200 million daily active users.
Disappearing photos and video snippets helped make Snapchat Stories wildly popular with millennials. Instagram Stories were almost identical to one of Snapchat’s main features.
Same name, a similar look, and the same premise: Friends could share photo and video updates on their profiles that would disappear after 24 hours.
Over the course of a year, Instagram added face filters, location tags, stickers, drawing tools, and disappearing photo messages, heating up competition between the two social apps, according to Business Insider.
Users are shifting their attention to Instagram Stories. Have top Snapchat influencers shifted their attention, too?
Top Snapchat influencers posted 25 percent more on Instagram Stories in a 30-day period, and a drop in Snapchat downloads over a two-month period points to signs of users moving away from the platform, according to 2017 data.
When it debuted on the New York Stock Exchange on March 2, 2017, Snapchat parent Snap was the IPO of the season. Three weeks later, at least five Wall Street analysts had the stock rated as “sell,” with another two calling it a “hold,” Jonathan Garber reported for Business Insider.
Traders loaded up on short bets against Snapchat, prompting a Moguldom report, 9 Reasons To Bet Against Snap Stock With Put Options.
Four things were limiting Snapchat’s upside, Anthony DiClemente of Nomura Instinet said at the time, according to Business Insider:
1. Already slowing growth in daily active users (DAUs).
2. Slowing monetization (ARPU) growth.
3. Fierce competition from larger rivals such as Facebook, Instagram, and WhatsApp.
4. Rich valuation relative to current and future growth.
Mediakix looked at 12 top social media influencers known for posting on Snapchat regularly, noting their activity on both Instagram and Snapchat for a 30-day period. Mediakix tracked the number of stories they posted on each app per day. The result? Influencers in the sample overwhelmingly preferred Instagram Stories to Snapchat Stories, mediakix reported on April 26.
In May 2017, influencer marketing company Collective Bias studied 550 social influencers and found that almost 70 percent had paused activity on some social accounts and prioritized others, ZDNet reported:
Only one in three influencers (35 percent) have paused their use of Twitter, while 40 percent have paused YouTube, and almost half (46 percent) have paused their use of Snapchat.
Snapchat ranked among influencers as the most likely platform to be put on hold, with 46 percent indicating it would be their first choice to cut.
Adding insult to injury, only 1 percent of influencers reportedly feel Snapchat will be the most important social channel in five years, while 42 percent cited Instagram.
Whilst almost all influencers had a presence on Facebook, Instagram, Pinterest, and Twitter, only three out of 10 influencers reported that they currently use Snapchat. No one thought that the platform was the most important platform. It scored lowest for perceived earning potential.
Why are influencers shifting to Instagram?
Instagram offers a broader variety of features and a larger audience for influencers to engage with. It gives users the option to include external URLs, and its search feature is easier to use, according to mediakix.
Comedian Ross Smith, 24, has a million-plus followers on Instagram but he maintains a strong presence on Snapchat. His Snapchat connections are “more organic and engaged,” Smith told CNBC.
“I always ask fans ‘what’s your favorite media’…and 95 percent of the time they say Snapchat,” Smith said. Snapchat was “so much more advanced and ahead of the game, because Instagram basically copied everything Snapchat did with Stories.”
Snapchat won’t succeed because of massive growth numbers on platforms like Facebook, Snap CEO Evan Spiegel said in a recent earnings call. Instead, the company wants to succeed because it claims to offer higher quality and intimacy.
However, for influencers and brands, it’s usually just a game of numbers — which is far easier to measure than engagement, CNBC reported.
Morgan Stanley analysts led by Brian Nowak are now less convinced of Snap’s ability to grow, according to Fortune. Analysts have refuted Snap’s scalability and uniqueness — some of the main reasons why Snap’s biggest champions believed in the company.
“We have been wrong about Snap’s ability to innovate and improve its ad product this year (improving scalability, targeting, measurability, etc.) and user monetization,” Nowak wrote. “Snap’s ad product is not evolving/improving as quickly as we expected and Instagram competition is increasing…We believe Instagram has become more aggressive in competing for Snap’s ad dollars,” Nowak wrote.
Research firm eMarketer projects that Instagram’s daily users will grow to 99 million by 2021, with Snapchat’s expected to hit 89 million. That’s still a lot of million.
Rather than try to catch the bottom on Snap, investors would be wise to either sell Snap stock, short the stock, or stay on the sidelines and do nothing, Moguldom reported in a recent opinion piece:
The biggest risk we see to shorting Snap is that a buyer shows up and catches the falling knife. Outside of an acquisition, it is a strong probability Snap could fall another 30-to-50 percent before bottoming.