While Snapchat has been one of the most popular and revolutionary social media platforms of the past few years, the company has recently been experiencing severe financial troubles. In an article originally written by Michael Wade of Fortune, Snapchat’s struggles on Wall Street send a clear sign to marketing professionals and investors everywhere.
Despite being one of the most popular new companies on the stock market, Snapchat was faced with a major financial setback in its first post-IPO earnings report. The companies failed to meet its projections for generating daily users and revenue. As a result, SNAP stock dropped more than 20% in after-hours trading. Some might consider this stock drop to be a minor setback, but there are very few indications that the company has the potential to bounce back.
While Snapchat has been a hit in the tech world, especially with users under 30, the app faces a key problem which extremely limits its future success. This problem is a lack of differentiation from other social media platforms like Facebook and Instagram. Snapchat originally started out as a refreshing application in the tech world. The ability to send pictures in the form of messages to friends was an extremely appealing feature to users. Over time, Snapchat added enhanced elements, such as lenses and filters, making it even more appealing to potential users. While these features made Snapchat seem like a pioneer in the world of social media marketing, the app now sees its best features being copied by the likes of Facebook and Instagram.
Facebook failed to purchase Snapchat in 2013 but has now found success by copying Snapchat’s once-unique features. Specifically, Facebook has copied the Snapchat “story”, a feature which allows users to post a series of photos showcasing their day which is deleted after 24 hours. In addition, Facebook and Instagram have begun showcasing image and video filters, the same features which have attracted new users to Snapchat in recent months.
The problem of differentiation within the tech world is not a new concept. In fact, companies in the Silicon Valley have faced this problem for the last decade. While companies are able to introduce new, innovative ideas when starting a company, sustaining and protecting this innovation is very difficult as new firms enter the market.
Snapchat’s struggles send a very clear message to business professionals, especially those within the marketing industry. You may feel inclined to rely on a single social media platform to promote a given brand, but this method will ultimately prove to be fruitless. While Snapchat was able to maintain its position as a unique platform for digital advertising for a number of years, its lack of differentiation has put Facebook and Instagram on a level playing field.
Since social media giants are essentially copying each other, it would be wise to market a brand across a wide range of platforms. While you may be solely relying on Snapchat, it would be more practical to expand your efforts to Facebook, Instagram, and other up and coming platforms. This would ensure you are capturing the largest audience at all times, and not falling flat when a specific platform fails to attract new users.