After a solid period of quarter-on-quarter growth for Snapchat in 2016, the introduction of Instagram stories has caused the photo-sending app a significant drop in growth, according to the new stats released in its IPO filing. Could this be the end of Snapchat?

Q3 2016 saw the launch of Instagram stories, a new function that directly mirrored that of Snapchat stories; the ability to post content to an area of the app that was viewable by your contacts for up to 24 hours. After just one month, the feature alone had users numbers two thirds the size of Snapchat’s total membership.

Figures released this week highlight how much this affected Snapchat. A sudden slowing in growth, down to only 7%, showing a clear swing in the market.

What now for Snapchat?

Although Instagram Stories enjoyed a good start, it’s key to remember that consumers want to try things when they first come out, but don’t always continue to use them. The real test for Instagram stories will be its ability to maintain the growth that it has enjoyed so far.

For those worrying that this is the beginning of the end for Snapchat, you can rest easy – it isn’t going anywhere. Like in any market, innovation is crucial, so the emphasis is on Snap to engineer new features (and new augmented products like Spectacles) that will provide value to the user.

Where Snapchat is already excelling, and can excel further, is the focus on location and community. Introducing more local stories (which are a collection of images and video from users in a particular locality) and community stories drives engaged traffic and increases the value that users get from the app. With the introduction of Instagram Stories, it seems that this is an area that Snapchat are going to need to push harder to retain and tempt back users.

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