Thursday, February 15, 2018

Snapchat Gets the Upper Hand Over Facebook

Facebook, the long-reigning king of social media, could be facing some serious challenges to its dominance up ahead. Apparently, the popular platform is no longer as popular these days; it is actually losing users to its rival Snapchat.

Aside from increasing its user base, Snapchat surprised Wall Street estimates by churning out better than expected fourth quarter financial performance for 2017. Last week, the company reported a 72 percent increase in its fourth quarter revenues compared to the previous year.

This increase in advertising revenue has something to do with Snapchat’s demographics which is considered to be ideal for advertisers. The app, which is known for its disappearing videos and messages, still remains a favorite among millennials and younger audiences compared to its rival, Facebook-owned Instagram.

According to estimates by the research firm eMarketer, Snapchat will add another 1.9 million new U.S. users under the age of 25 this year. Meanwhile, rival Instagram will only lure 1.6 million users of the same age group for the same period.

One Snapchat feature that is especially attractive to advertisers is its “Discover” tab, which is a section dedicated to showing content from reputable outlets like The New York Times and ESPN. With this feature, businesses have some assurance that their ads will be paired with “professionally developed shows.”

"Snapchat can provide a highly controlled environment for advertisers to reach an audience," Nick Cicero explained. Cicero is the CEO of Delmondo, a firm that specializes in social media advertising and branding.

Meanwhile, Instagram’s Explore tab just can’t compare with Snapchat’s Discover tab content. In addition, Facebook introduced a Watch tab, but it is still unclear how users will receive the feature as it is still less than six months since it was introduced.

Snap’s shares rallied by nearly 50 percent during Wednesday’s trading reflecting the company’s fourth quarter performance. For the first time since July last year, the company’s stock traded above its IPO price.

[Featured image via Snapchat]

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