Snap, the parent company of the immensely popular messaging app Snapchat, is making headlines by going public. With this significant move, Snap's IPO filing has revealed several intriguing details that marketers should take note of. Let's dive into these key facts:
Impressive User Base
Snapchat boasts a daily user base of 158 million people. What's even more noteworthy is that 60% of these daily active users not only create snaps but also engage with its chat service daily. The majority of Snapchat's users fall within the coveted 18 to 34 age group, making it an attractive platform for brands targeting millennials and Gen Z.
User Growth Trends
While Snapchat's user base is substantial, there are signs of slowing growth. As of June, Snapchat had 150 million daily active users, adding only 8 million in the last six months of 2016. Snapchat expects a decline in user growth over time, especially among its core demographic, which may be less brand loyal and more prone to switching to alternative platforms.
Impressive Revenue and Losses
Snapchat's revenue in 2016 skyrocketed to $404.5 million, a significant increase from $58.7 million in 2015. However, the company also reported substantial losses, totaling $514.6 million for 2016. A significant portion of these losses went into research and development efforts, including the improvement of its advertising platform.
Direct Sales Dominance
Snapchat's advertising revenue primarily comes from direct sales. In 2016, 91% of its advertising revenue was generated through direct sales, up from 87% in 2015.
User Engagement Metrics
Users spend an impressive amount of time on Snapchat. On average, users aged 25 and older visit Snapchat about 12 times a day, spending 20 minutes each day on the platform. Younger users, under 25, visit Snapchat more than 20 times a day and spend over 30 minutes daily on the app.