For those who follow social media companies, you may know that Snapchat has been in the news quite a bit lately. And not for very many “good” reasons.
In the midst of a massive platform redesign and declining users, Snapchat’s stock has dropped to roughly 29% of its all-time high. Ignoring the financial side, CEO Evan Spiegel has faced his own sort of issues with many seeing him as an ineffectual leader.
But does this mean that the platform isn’t worth the time of day for businesses trying to launch their social media marketing effort? Absolutely not. Here’s why.
The first reason is often referenced quite a bit. Snapchat has an incredible attraction to the Millennial and the up-and-coming Generation Z age groups.
According to healthcare digital marketing agency Omnicore, it’s estimated that “30% of US Millennial Internet Users use Snapchat regularly. [RY1]” More so, 18% of total U.S. social media users use Snapchat.
Taking a look at a report from Snapchat, they recently stated that “Gen Z commands $44 billion in buying power, and they influence an additional $600 billion in how their households spend money. In fact, 96% of Gen Z parents say their teens influence family spending. [RY2]”
With statistics like these, businesses can’t afford to overlook the platform as a valuable method of reaching a younger audience whose buying power will only expand more over the next few years.
Deal with Amazon
One of the diamonds in Snapchat’s recent rough patch has been the recently announced partnership with Amazon. While partnering with a trillion-dollar company is a pretty big step forward in its own right, the way that Amazon plans to utilize Snapchat is what’s truly remarkable.
The Motley Fool describes that initiative perfectly [RY3]:
Snap unveiled a new feature that allows users to point their Snapchat camera at a product or barcode, and when recognized, an Amazon card about the item will pop up on the screen. Tapping it will take users to Amazon's site where they'll be able to purchase it. A revenue-sharing agreement between Snap and Amazon, which hasn't been disclosed, could become a significant new stream of income.
With Amazon consistently soaring to new heights and Jeff Bezos’ history of lucrative acquisitions, it seems that this partnership is an out-of-the-box attempt to not only enhance Snapchat’s usage, but to also drive those daily users back to Amazon.
180° in Leadership
Evan Spiegel’s leadership style has been greatly criticized for never interacting with employees, ignoring investors, and essentially running Snapchat as if it’s a private corporation.
But he’s working to improve on all of those. Business Insider reports that “after coming under criticism for his management style and his company's poor performance since its initial public offering last year, Spiegel has been trying to be more outgoing and a better manager. He hired a management coach last year and anonymously surveyed employees about how he could improve as a leader, according to the report. He's also started to interact more with workers. [RY4]”
Another issue stems from the recent executive losses, leading some to think that the company is a sinking ship. However, this may ultimately be for the best.
For one, Snapchat has recently hired Tim Stone as their new Chief Financial Officer. Tim’s background for those who don’t know entails of two decades with Amazon. Despite the intriguing coincidence, Stone could be the new blood that Snapchat needs to generate a positive cash flow, leading to new features for users everywhere.
This isn’t even to mention Snapchat’s earlier hires, such as Claire Valoti (formerly worked at Facebook) and Jerry Hunter (also, Amazon). At this point, there’s plenty of talent in the room to help make Snapchat the next great social media superpower.
In the face of Snapchat’s widespread appeal to younger generations, its partnership with Amazon, and a growing leadership team, the company seems to have a worthwhile long-term strategy. Although Snapchat definitely shouldn’t be the go-to social media platform for every business, it’s definitely worth considering if there is any type of visual aspect surrounding your product or service.
For guidance on launching your Snapchat branding campaign, send us a message at RizzoYoungMarketing.com.