The Snapchat IPO Suggests Authenticity & Constraints Make Snapchat An App For Photographers
Snapchat went public today, and as the trading day pulls near a close it’s safe to say the giant ‘self-disappearing’ photo app will have made many people very, very, exuberantly wealthy as last I checked it was trading 40% above it’s announced stock price. Before opening the value of the 200 million shares being sold today at $17 gave it an IPO value of almost $3.5 billion for a total company valuation of $24 billion, but currently trading at $24 a share, the company valuation, however inflated you think it may be, has increased to about $33 billion.
So what does that tell you? Well, for one it’s the biggest social media IPO since Twitter, and the biggest IPO in the US in about 3 years. It also says there’s market faith in the company even though they disclosed last month that they may never actually be profitable (at the moment investors are paying nearly $70 per dollar of sales).
But all the accounting nonsense aside, Snapchat is in demand. Snapchat’s filing documents are pretty revelatory of that, even if their profitability doesn’t seem great, because with those documents they released data that showed there are 158 million Snapchat users daily, with over 2.5 billion snaps created daily, and 10 billion videos consumed daily (350% increase since 2015). Those are ridiculous numbers, especially when you consider the recorded demographic for Snapchat are those 14-35 years old – prime consumers of media, but also prime consumers in general. That demographic is also the trend-setting demographic, the group that’ll be shaping, well, everything in the near future. I mean, it should be painfully obvious that the grip Snapchat has over that millennial market is what’s driving the stock.
As a photographer, all of this should interest you, not necessarily because you could’ve made some nice dosh today, but because it indicates something about the platform, social media in general, and what the up-and-coming generation is looking for.
I’m known for saying here that Instagram is, for photographers, where the eyes are, and regularly quote Pamela Chen (Head of Creative, Community at Instagram) who perfectly phrased it as the platform destination for the curatorial and editorial. As a photographer to showcase your work, I still think Instagram is where it’s at, but clearly, millennials are still going to Snapchat, and my assumption is that it’s primarily for raw authenticity. Snapchat is still considered (even with IG’s Stories) the more ‘real’ social platform. *Yaaasss*…
Millennials as a demographic want to feel as connected as possible, and part of being connected means getting to know who you are, the person/people, and know you’re real. Arguably, Snapchat does this better than the rest, or at least more naturally. What else can we attribute to the daily user growth being over 40% last year alone? Also good to keep in mind too that some two-thirds of Snapchat users are female, who are largely agreed to be primary consumers. Furthermore, the class of 2014 suggests 46% of them use Snapchat daily and 58% of college students suggest they’d buy something if a brand prompted them to on Snapchat with a coupon. What this is all saying is that the company with the logo named for Ghostface Chilla of Wu-Tang is a massive connection opportunity, and by extension, a marketing one.
That may sound at odds with how Snapchat is built, considering there aren’t traditional ‘likes’, no typical route for discovery of new people; you’re limited in how you can modify the material you share, and the material has all the staying power of a Taylor Swift romance, but the very limitations it imposes produce its greatest strengths: The ephemeral nature of it all makes it both scarce and valuable. This probably is why if your Instagram engagement rate is maybe 5-10%, your Snapchat is likely 75% or higher. That matters, and that’s the trend.
Does this matter for you? It could, though a typical argument against it by established photographers is that they already have a big audience on Instagram or Facebook so they don’t relish the idea of building a new one on Snapchat, except you’d really just be encouraging your audience elsewhere to join you on Snap also. You can use Instagram as your foundational curatorial selection, a showcase of your work, and then use Snapchat to share who you are, and how you work.
For those of you who have been looking for the place to better connect but weren’t sure about Snapchat’s value, perhaps their IPO and valuation is proof it’s still strong.