Snap: Exclusive Engagement Is not Enough – Snap Inc. (NYSE: SNAP)


A new report supports the thesis that Adjust (SNAP) has a convincing user participation that remains sticky. Unfortunately, the user's commitment is only part of an invertible business model that my research has questioned since the IPO.

The stock has been a sad actor since the initial public offering earlier this year due to declining user participation and mbadive losses. Is the exclusive commitment sufficient to change the shareholders' fortune?

Exclusive User Engagement

For Q3, Snap reported that the DAU only grew sequentially from 5 million to 178 million. Sequential growth slowed to 3% and annual growth has now fallen below 20%. The growth in North America was similar anemic to 2 million users added sequentially.

The only thing that Snap is doing on its own is that the compromise is still strong for a central user base. According to App Annie, a large part of Snapchat's home users do not use other social platforms on a given day.

Source: Ann Annie

Therefore, Snapchat users do not use the key Facebook ] (FB) applications like Instagram and Messenger every day. Basically, for advertisers to reach the Snapchat user base, they must go directly to that platform; 48% of users in the United States do not log in to Instagram on a given day. The numbers are even worse for Twitter (TWTR).

These data continue to support the theory that Instagram's ability to copy Snapchat's features, such as through Instagram Stories, has killed the user's growth. Instagram Stories now has shot to more than 300 million users and will duplicate the amount of people that use the creator of the concept.

The following BTIG graph highlights how Facebook through Instagram has killed the growth of the Snapchat user.

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