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Snapchat IPO

Snapchat:Will popularity prove profitable?

10th March 2017

This week, like many social media companies have done before, Snap Inc. (Snapchat) went public, offering people the opportunity to buy shares in the popular video-sharing mobile app. Up until now, Snapchat has never made a profit, but it’s finally big enough and popular enough to make the ask. This marks an interesting time of change for Snapchat, which has been dramatically rising in popularity since its launch four years ago.

With over 100 million active users and 7 billion daily video views, companies will have the opportunity to get a bite of the HUGE global reach and influence of the app. The introduction of advertising is a development we have seen across most other social media websites; Facebook managed to integrate advertising (with a few bumps along the way) successfully into the platform, Instagram managed to stay true to itself and its ‘look’ while making it work, while Twitter has slightly struggled to incorparate ads whilst maintaining the user experience. 

It’s going to be interesting to see how Snapchat develops a commercial model to keep pioneering in the short-form content space, whilst incentivising brands to advertise on the platform. It is fast becoming a busy space, especially as all other apps are introducing story-like features (Facebook Messenger has just announced Messenger Day, a feature to share videos and photos with filters and stickers). Snapchat may have a challenging time creating it’s own unique packages, formats and space for advertisers, all the while keeping its integrity for its users, but others have shown it’s not impossible. 

Although Snap Inc. clearly has the popularity numbers, will this equate to profitability? Let’s see…