Story updated to include a comment from Snap.
Snapchat is on track to lose US users for the first time this year, according to eMarketer, thanks in part to continued aftershocks from its disastrous 2018 redesign.
And Snap’s loss could be Instagram’s gain.
Monthly users are set to decrease 2.8% year over year at Snapchat to 77.5 million, which is significantly lowering its growth outlook for the platform in a revised forecast eMarketer released Wednesday. Snap’s stock was down around 5% Wednesday morning.
Snapchat’s user growth rate will flatline in 2020 to 0.4%, far below social network use overall in the United States, which is 2.4%. Between 2019 and 2023, eMarketer expects that Snapchat will only be able to add around 600,000 new users.
Back in Q3 2018, eMarketer had predicted 6.6% user growth on Snapchat to just over 90 million monthly users in 2019.
It’s worthwhile to note that eMarketer’s numbers are focused on monthly usage, while Snap generally talks about usage in terms of daily actives. A Snap spokesperson called the eMarketer forecast “flawed.”
“The report does not factor in key recent developments at Snap, such as our revamped Android app, or reference our statement in February that we do not anticipate a sequential decline in our daily active user total in Q1 2019,” the spokesperson noted in a statement. “Its user forecast is more than 10 million off from Snap’s publicly available reach on our ad buying tool, its thesis is narrowly focused on the app redesign from over one year ago, and its methodology draws on self-reported survey data that’s unreliable in our core 13-34 year-old demographic.”
Regardless, the picture at Instagram remains rosy. According to eMarketer, Instagram will hit 106.7 million US users this year, up 6.2% from 2018, and add nearly 19 million new US users by 2023.
Although it’s not possible to say that all the users Snapchat sheds will head over to Instagram en masse, Insta is one of Snap’s main competitors, said eMarketer senior analyst Jasmine Enberg, and it’s reasonable to predict Instagram will benefit from a user exodus at Snapchat.
And that issue ties into why the backlash against Snapchat’s hugely unpopular and ultimately failed redesign isn’t the platform’s only problem.
Although Snapchat invented the Stories format, Facebook has incorporated the same functionality across its entire suite of apps. When one half of the duopoly is hell-bent on cloning your features, it’s an existential threat to the business.
Also, there’s increased competition from emerging apps, like TikTok, that appeal to the same young user base Snapchat is going after.
But “all is not lost,” Enberg said, and Snapchat has an opportunity to reverse the trend if it grows in other markets. On Monday, Snap finally launched a less buggy, better performing version of its app for Android, which could help unlock international markets where Android is the OS of choice.
Snap’s also got a few products up its sleeve to try and encourage engagement.
At its first ever developer’s conference last week, Snap announced its plan to launch a new multiplayer gaming platform and give users the ability to share content from the Snapchat camera to Stories within third-party apps.
“They’re looking for ways to entice their core audience of young users in their own ecosystem rather than seeing them go to other platforms to play games or watch videos,” Enberg said.
Finally, Snap hopes to attract advertisers with an ad network set to launch later this year which will extend ad buys to reach both users and nonusers across other apps.
Though an ad network has nothing to do with keeping users engaged on the platform, “it’s important for Snapchat to have something like this to make it more appealing to advertisers,” Enberg said.
This post was syndicated from Ad Exchanger.
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