Snapchat Keeps Unique Daily Audience Against Instagram Challenge

  • App Annie Says 46% of Snapchat users aren’t found on Instagram
  • Snap’s sales pitch hinges on having loyal group of fans

How Does Snapchat Make Money?

Snap Inc., the newly public corporate parent of Snapchat, makes its money by telling advertisers that it has a base of young, obsessed users who can’t be reached as easily anywhere else.

That claim has met more skepticism lately as Facebook Inc.’s applications rush to copy Snapchat’s most popular feature -- a tool called stories that allows people to upload video snippets of their day, which disappear after 24 hours. The feature has been most popular on Facebook’s Instagram, where it’s used by 200 million people daily, more than Snapchat’s entire app.

But Snapchat can still say it has a unique offering, according to App Annie. The app data firm measured user behavior during the fourth quarter and said that on an average day, 35 percent of Snapchat’s daily users in the U.S. aren’t reachable on Facebook that same day, and 46 percent can’t be found on Instagram. About 61 percent of Snapchat’s fans aren’t watching YouTube on a given day, either. Snap said it had 60 million daily active users in the fourth quarter in the U.S. and Canada.

While many people use multiple social media apps to communicate with friends, the finding could help Snap sell ads in a lucrative market that’s increasingly dominated by Facebook and Alphabet Inc.’s Google, which owns YouTube. The company, which will give its first public quarterly earnings report next week, must prove to advertisers that it’s a long-term investment, not just an experimental venue.

Though Snapchat’s features are being copied, the app remains unique in an important way: there are no likes or sharing of content, as on Facebook’s apps. So people tend to use Snapchat for more ephemeral moments, while they use Facebook and Instagram to craft an image of themselves. That’s how advertisers should think about their choice, said Harry Kargman, chief executive officer of Kargo, which manages mobile advertising for media companies.

“Do you want to be in the aspirational environment of Instagram or do you want to be in the real, true peer-to-peer environment of Snapchat?” Kargman said. “Those are two very different purposes.”

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