Less than two years ago, Snapchat amazed everyone with the bold move of rejecting a $3 billion acquisition offer from Facebook. Now, reports say Snapchat is building sophisticated ad targeting to compete with the world’s largest social platform with more connections than god. The new business will emulate many of Facebook’s features, including finding data about people’s interests based on what they read on discover and their browsing habits when they are not on Snapchat. Sources say the Snapchat stories feed will be redesigned to rank content order with an algorithm, and executives will be able to see whether or not their ads are viewed.
Does Snapchat have the potential to become a real competitor to Facebook? Even though Snapchat has just 100 million users compared to Facebook’s 6 billion, the demographic of those users show such potential. Young adults 18 to 24 years old consist of the largest group and makeup 35% of Snapchat’s user-base. The next largest group is even younger, 13 to 17 years old. The user base could grow exponentially as the current base grows up with the platform.
And Snapchat is preparing for those users to become consumers, offering more than just brand accounts. Brands can sponsor a live story, advertise, or participate in lenses (a filter that lets users overlay a branded image over their snaps). So far, a small fraction of brands have taken advantage of these features. In the Sportswear category, which has the highest rate of Snapchat participation, just 32% of brands are present on the platform. In the CPG category, just 6% of brands have a Snapchat account. However, these low numbers aren’t necessarily signs that Snapchat does not resonate with brands. In fact, L2’s Social Platforms study finds that brands that do use Snapchat, use it regularly and more often than other social platforms. Even though 16% of brands with Snapchat accounts post daily, they collectively maintain a 9 posts a day – high relative to the average 1.8, 2.3, and 3.3 daily posts on Facebook, Instagram, and Twitter respectively.