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Will Snapchat's New Features Make It More Useful for Marketers?By Shirley Siluk
Posted: May 10, 2017 10:30am PDT
Ahead of its first-ever earnings call later today, Snap has unveiled a few changes to its Snapchat image- and video-sharing app that could help it boost appeal to marketers and better compete with rivals, including Facebook-owned Instagram.
The new features enable users to loop videos for repeated play or to re-view an incoming Snap for as long as they like without the normal automatic deletion kicking in after one viewing. Yesterday, the company also added a new creativity tool, Magic Eraser, that lets users edit objects from their Snaps before sending.
Snap, which completed its initial public offering of stocks in March, is scheduled to hold its first quarterly conference call today to announce its first-quarter earnings for 2017. The company is expected to post a loss for the quarter, and has seen its share values decline from their post-IPO peak, although they're still trading higher than the $17-per-share price of the initial public offering.
Service Continues To Evolve
Launched in 2011, Snapchat (the company rebranded as "Snap" last year) initially appealed largely to younger users who enjoyed the app's ephemeral quality: photos and short videos sent using the app disappeared automatically after being viewed by recipients.
Over time, however, the company introduced new tools and features aimed at engaging users in new ways that also appealed to marketers. They included new products such as Stories, Memories, Lenses and, most recently, Spectacles, camera-equipped sunglasses that allow users to more easily capture and share 10-second snaps.
The new features announced yesterday include a Loop tool that lets users specify if the Snaps they send play once or loop repeatedly until the recipients are ready to close them. And the infinity setting allows viewers to view Snaps without time limits. With the infinity setting, recipients can view photos or videos as long as they want, although they'll be deleted as usual once the Snaps are closed.
"These changes allow us to continue evolving the Snapchat service and provide a foundation for introducing even more creative tools for making fun Snaps," the company noted in a blog post yesterday.
Eyeing Facebook/Instagram Competition
According to its pre-IPO filing with the U.S. Securities and Exchange Commission, Snap reported 161 million daily average users by the end of 2016. The company also reported 2016 revenues of $404.5 million, six times as much as it earned through advertising in the previous year. Rival Instagram, on the other hand, which was purchased by Facebook in 2012, reported 700 million users in April.
In a report last month, eMarketer noted that in the past Facebook and Instagram added new features similar to Snap's to boost their appeal, and that Snap has recently started doing the same by introducing new self-service tools for marketers.
"Over the past year, Snapchat has steadily introduced ad capabilities and tools that are similar to those offered by leading sellers of mobile ads, including Facebook and Google," eMarketer reported.
In its ad revenue forecast for the next few years, eMarketer predicted that Snapchat will continue to see faster revenue growth than any other digital company, although future growth rates are expected to be slower than they were in 2016. Analysts are expected to closely watch what other news emerges in Snapchat's first earnings call today.
"Snap's user growth will also be a key item in focus," TheStreet reported yesterday. "Facebook has released a series of Stories-like products throughout the past year, including Instagram Stories, Facebook Stories, WhatsApp Status and Messenger Day. So far, Instagram Stories is believed to have detracted the most from Snapchat's existing user base, but Facebook Stories also appears to be gaining ground."
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