TLDR: Kylie’s Tweet wasn’t that impactful and Snapchat isn’t (completely) dead. However, Snapchat is on a slippery slope following its highly unpopular redesign that has users, Citigroup, and Wall Street challenging its decision.
Who’s really behind the decline?
While the redesign backlash and Kylie’s tweet no doubt had a negative impact on Snapchat’s sentiment, the ephemeral platform still remains the sixth most-downloaded app on Apple’s App Store and the ninth most-downloaded app on the Google Play Store within Australia. Additionally, a SimilarWeb spokesperson added that Snapchat’s current download numbers in the US actually increased from 348,716 on February 21st to 352,727 on February 22nd after the tweet came out.
So, what caused the NYSE downfall, which brought stocks to a mere $17.09 USD last week (down from $20.75 USD on February 6th)?
Before you blame the 20-year-old Jenner, consider this - the actual reason for Snap’s value decline came from Citigroup’s update of Snap’s stock rating, which shifted its ratings from “Neutral” to “Sell” just a day before the infamous tweet. Citigroup rightfully used user disapproval surrounding the UX update to inform their decision and warn investors of potential user abandonment.
Questionable Snap decisions
Given that the Stories feed update was received so poorly that financial advisors and celebrity influencers took a public stance against it, one would think Snap Inc. would listen to its highly-influential critics and revert back to its old design. However, quite the opposite has happened.
As we reported in last week’s Tuesday Tune-Up, CEO Evan Spiegel gave a very political “we hear you but don’t really care about your opinion” response when asked about the recent update. The company also sent this not-consoling-at-all consolation tweet stating "We hear you, and appreciate that you took the time to let us know how you feel. We completely understand the new Snapchat has felt uncomfortable for many...The new Friends page will adapt to you and get smarter over time, reflecting who you’re most likely to be Snapping with at that moment. This same personalisation is also true of the new Discover, which will adapt to you the more that you use it."
Clearly, they’re not listening, even with a change.org petition that’s well on its way to over 1.3M signatures. Wall Street, Hollywood, now Capitol Hill? Literally anything could happen these days.
Aside from frustrating Jenners and users, Snap is also agitating its real key players - advertisers. It seems they’re making the only-a-matter-of-time move into the “pay-to-play” space, and advertisers are finding organic growth and channel maintenance increasingly difficult on the platform. Plus, Snap’s paid options are still pricey and complicated.
It’s not all doom and gloom for Brands and Advertisers
Still, there are a few good things coming from the Ghost - Snap has worked on bringing their backend API up to scratch, which allows it to feed into advertisers’ data stacks. Their pixel introduction also improves the platform for advertisers who want to attribute actions to their website. Let’s also not forget your CPVs and CPMs are going to benefit from branching outside of Facebook’s ever-growing grasp. Also, their recent Influencer insights launch brought a much-needed and long-awaited feature to help influencers visualise and understand their audience data.
From a content perspective, the release of 3D object importing and a suite of other creative options has revived the ways in which brands can interact with (what’s left of their) audience. Spiegel can feel slightly flattered by the fact that Facebook is even stealing some of Snap’s latest ideas. Plus, E-Commerce growth on the platform hasn’t plateaued yet, with huge brands like Nike’s Jordan brand successfully launching first-of-their-kind in-app purchasing placements.
Will brands abandon Snapchat?
Well, even hypocritical Kylie hasn’t fully abandoned yet, as she’s been spotted posting all-too-important pictures and puppy lenses with her newborn baby.
Brands seem just as conflicted in their decision on whether or not to completely disengage with the Snap sphere. Take this (since deleted) tweet from Maybelline, which spells out their uncertainty and puts it to their audience to decide.
At least someone seems to care what the public thinks (hint, hint Spiegel).
For better or worse, the Snapchat controversy has called the platform back into the spotlight, which had been previously stolen by Instagram since their launch of Stories. As with any update, I believe this too shall pass. In fact, as a beta tester for the app (jealous?), I’ve already come to terms with the new update, which hit my phone a month before it was rolled out globally. As Spiegel warned, it does take some getting used to, but fans will come around to it - just as they did with Facebook’s “Timeline” update, where users protested the change in late 2011, which lead Facebook to release this statement, ”We're constantly working to make Facebook better, and we're gathering and evaluating feedback on all of our products and will continue to make improvements over time." However, much like Snapchat’s stance that their new feed is here to say, Facebook never actually removed the “Timeline” section that users now know and love. Snapchat will continue to live on… Sorry Kylie.
This post courtesy of Zeb Smith.