{"id":4146,"date":"2017-02-26T17:42:00","date_gmt":"2017-02-26T22:42:00","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/"},"modified":"2017-02-26T17:42:00","modified_gmt":"2017-02-26T22:42:00","slug":"snapchat-a-camera-for-gen-y-and-z","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/","title":{"rendered":"Snapchat, a \u201ccamera\u201d for Gen Y and Z?"},"content":{"rendered":"

Founded in 2011, Snapchat is an image messaging and multimedia mobile application which initially differentiated itself by allowing users to share images that are ephemeral and self-deleting. The company claims itself a \u201ccamera company\u201d and aims to reinvent the way people communicate with each other[1]<\/a>.<\/p>\n

Scaling up the platform<\/strong><\/p>\n

Snapchat has scaled its business rapidly from inception, growing to $404 million in gross revenue in 2016. DAUs spend an average of 25 to 30 minutes and visit the app more than 18 times a day[2]<\/a>. The image messaging and 24-hour self-deleting function has differentiated Snapchat from its competitors i.e facebook, whatsapp and contributed to its success among users with age brackets under age 30[3]<\/a>.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

Snapchat can attribute its success to company\u2019s focus on innovation and risk-taking mentality to improve its products. The strategy allows Snapchat to take mindshare quickly among the Gen Y and Z, increase user engagement hence monetize through advertising. \u00a0For example, since 2013, Snapchat started to innovate its platform product featuring a broad selection of camera lens filters which elevates users\u2019 photo sharing and social networking experience; curation of community live stories feed which makes viewing experience more convenient and etc. The rise of its fan group also garners itself a list of high profile brand partners. These partners not only generate regular ad content tailoring for the target users through Snapchat\u2019s platform but also sponsor photo lens and avatars\u2019 costumes in Bitmoji, creating a fun experience for their ad campaign. Since younger people are spending more time on mobile devices and sharing videos, Snapchat seems to be well positioned for the growth expected in mobile and video digital advertising.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

Network effects and Multihome dynamics <\/strong><\/p>\n

The growth of the DAU above demonstrates Snapchat\u2019s strong network effects. This speaks to how innovative and well received Snapchat\u2019s products are. On the other side of the platform, Snapchat also establishes partnerships with top brands and publishers such as Burberry, Calvin Klein, CNN, Cosmopolitan, Domino\u2019s, ESPN, Gucci, GE, NFL, People, Starbucks, Taco Bell, Victoria\u2019s Secret. Relative to the competition, there is a sense that Snapchat is\u00a0a better reflection of your \u201creal\u201d life whereas Facebook and Instagram portray only an embellished life. With revenue per user of only $2.14 in North America compared to Facebook\u2019s $19.81, Snapchat has significant room for monetization upside.<\/p>\n

However, the unique value proposition of the platform could be a double-edge sword. By merely focusing on Gen Y and Z, Snapchat has not made much progress in attracting the user group with age > 30, which another core category advertisers care. Its DAU growth in the last 2 quarters has also slowed down, which indicates challenge in its incumbent group. By contrast, Facebook and Instagram have a better balance among users across different age brackets. From advertisers\u2019 perspective, it\u2019s difficult not to multi-home.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

Took a glimpse of the current ads contents on Snapchat, most ads are very tailored to the taste of younger generation, appearing cool, fun and light hearted. Despite of the high ROI for selective ad campaigns now, Snapchat has to either continue increase the ARPU of its current user base or invest in products to penetrate into older age segments. Because Gen Y and Z in multiple instances have proven to be a bit flaky and have shorter life span on new products. Snapchat cannot afford only focusing on this user group in the long term. Facebook and Instagram recently also introduced video feature into their social apps. The continue efforts by the competitors and the limits of Snapchat\u2019s target audience will undermine Snapchat\u2019s ad wallet shares growth<\/p>\n

Look forward and reason back<\/strong><\/p>\n

The digital media advertising market is expected to grow at 46% in the US next few years outpacing the growth in other traditional channels such as TV, radio etc. Hence Snapchat is in a favorable upward tunnel and I believe in the near term they are able to continue capture value through its incumbent users. However the competition is becoming more fierce in the digital ad space. In the end a sustainable ROI is what advertisers care about. Snapchat should continue invest in product innovation, data analytics to increase user penetration and activity, and advertiser\u2019 money spent efficiency.<\/p>\n

Having said this, its recent innovation into hardware business Spectacles have not sustained its legacy on the software side, and is seemingly throw itself towards a more competitive battle field with mobile phone makers[4].<\/p>\n

Source:<\/p>\n

[1]<\/a> http:\/\/www.goodwatercap.com\/thesis\/understanding-snapchat\/<\/p>\n

[2]<\/a> SEC Form S-1\/A filing<\/p>\n

[3]<\/a>\u00a0https:\/\/www.commonsensemedia.org\/app-reviews\/snapchat<\/p>\n

[4]<\/a>\u00a0http:\/\/www.businessinsider.com\/snapchat-spectacles-glasses-review-2016-11<\/p>\n","protected":false},"excerpt":{"rendered":"

Snapchat is a social messaging app that features self-deleting image and video taking. It has proven success among younger users of Gen Y and Z and has taken increasing wallet share from advertisers who like to target this group. However the unique feature may become a double-edge sword and opens multi-homing for advertisers and places a question mark on the life span of the products<\/p>\n","protected":false},"author":715,"featured_media":4147,"comment_status":"open","ping_status":"closed","template":"","categories":[1241,216],"class_list":["post-4146","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-image-messaging","category-snapchat"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/growing-businesses-in-the-age-of-platforms\/","yoast_head":"\nSnapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Snapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Snapchat is a social messaging app that features self-deleting image and video taking. It has proven success among younger users of Gen Y and Z and has taken increasing wallet share from advertisers who like to target this group. However the unique feature may become a double-edge sword and opens multi-homing for advertisers and places a question mark on the life span of the products\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/\" \/>\n<meta property=\"og:site_name\" content=\"Digital Innovation and Transformation\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"698\" \/>\n\t<meta property=\"og:image:height\" content=\"348\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/\",\"name\":\"Snapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png\",\"datePublished\":\"2017-02-26T22:42:00+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png\",\"width\":698,\"height\":348},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/snapchat-a-camera-for-gen-y-and-z\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Snapchat, a \u201ccamera\u201d for Gen Y and Z?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/\",\"name\":\"Digital Innovation and Transformation\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Snapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/","og_locale":"en_US","og_type":"article","og_title":"Snapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation","og_description":"Snapchat is a social messaging app that features self-deleting image and video taking. It has proven success among younger users of Gen Y and Z and has taken increasing wallet share from advertisers who like to target this group. However the unique feature may become a double-edge sword and opens multi-homing for advertisers and places a question mark on the life span of the products","og_url":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/","og_site_name":"Digital Innovation and Transformation","og_image":[{"width":698,"height":348,"url":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/","url":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/","name":"Snapchat, a \u201ccamera\u201d for Gen Y and Z? - Digital Innovation and Transformation","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png","datePublished":"2017-02-26T22:42:00+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png","contentUrl":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/How-Many-People-Use-Snapchat-Mediakix-Influencer-Marketing1.png","width":698,"height":348},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/snapchat-a-camera-for-gen-y-and-z\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-digit\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/"},{"@type":"ListItem","position":3,"name":"Snapchat, a \u201ccamera\u201d for Gen Y and Z?"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-digit\/#website","url":"https:\/\/d3.harvard.edu\/platform-digit\/","name":"Digital Innovation and Transformation","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-digit\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission\/4146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/users\/715"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/comments?post=4146"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission\/4146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/media\/4147"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/media?parent=4146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/categories?post=4146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}