Yahoo Finance This is one war Snapchat is winning over Facebook
Facebook and Snapchat have been embattled adversaries ever since Facebook attempted and failed to acquire the messaging app in 2013.
A new forecast from research firm eMarketer released Feb. 12 now shows how much that failure may come back to bite Facebook in the long run. Snapchat is still winning among US teens, despite Facebook’s relentless efforts to attract and retain young users.
Facebook will lose 2 million users under 25 this year—although it will pick up 1.6 million from the same age group on Instagram, which it also owns. Snapchat, in contrast, will add 1.9 million users in the same time period. Snapchat also has more users than Instagram in the 12-to-24 age group, according to the eMarketer report. (The researchers’ estimates are based on an analysis of survey and traffic data from other research firms and regulatory agencies, Facebook’s own disclosures, and historical trends, as well as demographic and socioeconomic factors.)
Snapchat’s ability to beat Facebook among teens highlights the success of its strategy. Snapchat, and its parent company Snap, has continued to innovate and release unique new features, though they’re not all as loved as the app’s core messaging functionality. Last year it released Snap Maps and Context Cards, and a redesign that clearly separates friend content from brand content.
Although some users have grumbled about the changes, they appear to have paid off. Snap performed above analyst expectations in its most recent earnings, sending its stock price up to heights not seen in months. It traded above its $17 IPO price for the first time since June.
Facebook, on the other hand, has fallen behind on innovation. It’s relying on new features that have been borrowed from other companies like Slack and Twitch, or outright copied from Snapchat. It even said on its most recent earnings call that Stories (an ephemeral posting function it stole from Snapchat), are on track to be the most common way that people post to Facebook.
Recent announcements from each company highlight the innovation disparity. This morning, Snap announced a public web format of Snap Maps focused on showcasing real-time interactive content from around the world. Meanwhile, Instagram confirmed to TechCrunch yesterday that it’s testing notifications for when someone screenshots your story—a feature that is integral to Snapchat.
Although it currently outpaces Snapchat in total users, Facebook could fall behind without new ideas. In the US, Facebook and Instagram will end the year with 169.5 million and 104.7 million users, respectively, eMarketer says—by comparison, Snapchat will have 86.5 million.
Snapchat’s success may spread beyond teens soon, too. “Snapchat could eventually experience more growth in older age groups, since it’s redesigning its platform to be easier to use,” Debra Aho Williamson, an analyst at eMarketer, said in a statement. Older users, with more money to spend, would help infuse Snap with much-needed revenue to continue its growth and innovation.
Facebook had better be ready.
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