Despite daily active users shrinking 1.5% and earnings per share decreasing by 14 cents in Q2, Snapchat managed to beat Wall Street expectations, which may indicate just how low expectations are for the struggling platform.
It’s been a long year for Snapchat. Since launching in October 2013, the company has continuously tried to monetize its platform, but Instagram’s introduction of Stories in August 2016 may as well have put Snapchat’s advertising potential in a coffin. Today, there are 400 million Stories shared daily on Instagram, while Snapchat usage has shrunk to 188 million daily active users.
Fashion brands have had enough.
To get some more context, rewind the clock three years. Gartner L2’s Digital IQ Index: Fashion (released only two months after the introduction of Instagram Stories) found 55% of fashion brands already using the feature. However, 38% were using Snapchat too.
Even though Instagram Stories allowed brands to leverage existing communities while posting real-time polished content with the same high-quality filters, the feature was in its infant stages and there was still hope for Snapchat.
Then the following year, we started to see the impact of Stories. Gartner L2’s Digital IQ Index: Fashion reported 77% adoption of Instagram Stories and only 14% adoption of Snapchat, a 40% increase and 63% decrease respectively. Even a year ago, the feature was being viewed by 250 million people daily as opposed to Snapchat’s 173 million. Additionally, Instagram Stories allowed brands to link their content to push conversion and tag people, places, and hashtags to push engagement.
What was Snapchat doing?
In the last year, we’ve seen Snapchat move the stories feature to the “Discover” page, outside of the main feed where users spend a majority of their time interacting with friends. Now to see a brand’s story, a user must actively search for it.
On Instagram, Stories come at the top of the user’s feed, front and center. The platform has also added “Story Highlights” allowing users to save their best content at the top of their own profile.
While Snapchat escaped a sharp downward spiral, according to its Q2 earnings, Gartner L2’s Fashion 2018 ranking is on the horizon and researchers expect to see fashion brands continuing to pull back from Snapchat in favor of Instagram Stories. But how drastic will the fall of Snapchat be? Stay tuned.