Snapchat’s stock plummets amidst a thriving market (Nasdaq is up nearly 30% in the last year). The social application reported a loss in the third quarter of 2017. This isn’t a surprise too anyone that’s been following Snap since their initial public offering in February 2017. After opening strongly then trading up to just over $29/share in March, Snap has struggled in the following months. The financial issues could stem from anything. Whether it be a failing revenue model or lack of proper leadership, something is up at Snap, Inc. If you don’t believe me check this out.
Snapchat released a new update that allows users to use elements of augmented reality in their photos. They do so by displaying digital imagery by way of graphics, effects, emoticons, or a combination of the three. This has been a refreshing way for advertisers to reach their audience, too. Snap is such an interactive application that
advertisers are interested in using it. Sadly, Snap, Inc. doesn’t have as strong of a data analytics backing as competitor, Facebook. Due to this inadequacy, selling ad space has become difficult for Snap. While the new lenses offer a creative outlet for its users to express themselves, it doesn’t help the company’s revenue issue as it pertains to advertisers.
Even as Snapchat stock plummets, it is still a viable business. Often, Snap gets compared to Instagram. There is simply no way to compare the two due to their differences. Where Snap has a clear advantage over Instagram is audience engagement and interaction. There is no communication tool that is more personable than Snapchat (besides getting someone’s personal phone number). Having an engaged audience is what every company wants and Snapchat has that. To broaden their revenue streams, what if they offered a marketplace to purchase things directly off of Snap? Snap already offers a money transfer platform within the app, “SnapCash.” By adding a third leg for the company (online sales/promotions and marketing) you might see Snap improve financially. While the heart of its users will continue to use Snap for chatting, snapping, and storying, I can’t help but think adding a platform where companies can buy online space to sell their product. This could change their revenue model for the better and attract advertisers and businesses alike to purchase and promote through Snapchat.