Snap is finding its place in the new era of social media
Snap released its fourth-quarter earnings, painting a disturbing picture of the state of the social ad market. In 2022, there are currently 4.55 billion active social media users worldwide, a 9.9% increase over the previous year.
Advertisers continued to cut social ad spending in the fourth quarter as economic challenges persisted and social platforms continued to be affected by Apple’s privacy changes. Going forward, investors should be prepared for a new normal defined by more modest growth in social advertising.
Snap’s strong relationship with AR made last year’s headwinds especially difficult to deal with. Snapchat users love it, but advertisers don’t get it and aren’t as keen to experiment with it, spending fewer ad dollars. Another point of confusion for advertisers is Snap’s move to more personal sharing, as the social media has shifted to more short videos and engaging content in the past year.
Snap’s secret weapon is its audience. Snapchat users are an integrated research and development tool for Snap’s long-term AR ambitions, and despite intensifying competition, Snapchat has managed to maintain and grow its user base in every quarter of 2022. The world is monetizing at a slower pace, which hampered Snap’s overall ad revenue growth last year.
- Snapchat will generate $4.73 billion in net ad revenue worldwide in 2023, up 19.0% from last year. This gives Snapchat a 0.8% share of the global digital advertising market.
- In the US, Snapchat will generate $2.58 billion in advertising revenue in 2023, up 15.9% from last year. This gives Snapchat a 0.9% share of the US digital advertising market.
- In the UK, Snapchat’s revenue is expected to reach $326.8 million in 2023, up 11.5% from 2022. Snapchat has a 1.0% share of UK digital ad spend.
- This year, Snapchat is expected to have 525.7 million users worldwide. the worldCompared to 2022, it increased by 6.4%.
- Overall, Snapchat will represent 14.0% of social media users, up slightly from 2022.
The new era of social media
While social media continues to be one of the best marketing channels, it’s important to understand exactly how it’s changing in order to use it properly. 3 strategies are needed: having campaigns on the platforms that attract the attention of your target consumers, having highly creative content created specifically for each platform, and finally having a unique means of promoting UGC (user-generated content)
Video content is preferred by social media users. As a brand, you need to create content in the format your audience prefers. Also, expect e-commerce to become more prevalent on social media and more in-app purchase options to become available. For example, TikTok has announced a partnership with Shopify to allow its merchants to seamlessly advertise on TikTok.
Several direct-to-consumer brands have launched and scaled using only influencer marketing. Fashion Nova is a half-billion dollar brand that quickly rose from obscurity a few years ago to 20 million Instagram followers. They achieved this massive growth simply by spending more on influencer marketing than any other brand. But times have changed and the number of followers is no longer relevant.
Digital marketing experts estimate that most Americans are exposed to approximately 4,000 to 10,000 advertisements each day. If you take a minute to scroll through all of your social media feeds, you’ll no doubt come across several ads on every platform. Consumers then become more immune to traditional advertising. UGC or User Generated Content is a great way to increase brand awareness by providing you with highly effective social proof. A marketing message that reflects the actual user of a product or service will outperform creative advertising that includes professional photography and high-production-value video.
With Web3, social media platforms will be able to improve their capabilities and provide users with a more engaging experience. With its sophisticated features, it will enable social media platforms to provide unique feedback to users and attract more people to explore opportunities. This will play an important role in the growth of Web3 social networks, as more users will generate more revenue and ensure business sustainability. It will fundamentally change the structure of social media and the way the world communicates, does business and socializes online. This will help brands develop relevant social media marketing strategies that can successfully reach consumers on the decentralized web.