When Snapchat entered the social media scene in 2011, it quickly became famous for allowing users to send quick videos that vanish after they are viewed. But faced with a declining stock price and slow user growth, Snapchat is pivoting away from connecting friends in favor of discovery tools aimed at helping content creators. 

However, it may be too late to join the party, experts say. After all, TikTok, YouTube and Instagram have been using this technique for years. 

“I definitely think they’re struggling,” says Yakov Bart, an associate professor of marketing at Northeastern. “That’s probably not news. But the fundamental problem of Snapchat is TikTok.” 

TikTok provides similar media and has a high-quality algorithm that provides recommendations better to the user. In response, Bart says that Snapchat is trying to secure celebrities.

When TikTok gained traction, launching the content creator industry during the pandemic, Snapchat followed by launching Spotlight in November 2020. Spotlight offers cash payouts to users who achieve the most views on the platform. 

There is nothing new in this strategy. 

The fact that the platform didn’t have a way of incentivizing content creators beforehand is surprising and puzzling, says Amy Pei, a Northeastern research assistant focusing on influencer marketing and digital platforms. Snapchat is lagging behind competitors who have been doing it for years.

“Ad revenue sharing is a win-win situation for both the platform and the producers and consumers,” Pei says. “If you see more creators, you have more diversity of content to choose from.”

Pei says whether this change will save Snapchat is still up in the air. It depends on how many content creators the platform can attract and the quality of content they generate. 

In 2021, more than 12,000 creators were collectively paid over $250 million through the Spotlight and creator programs, according to the company. 

According to the company’s investor report, Snapchat generated $989 million in the first quarter of this year, a decrease of 7% year-over-year. Snapchat blames the disruption on the changes to the ad platform. 

However, daily active users increased by 15%, year-over-year, to 383 million. 

Bart says that despite having linear growth, it may not be enough for investors. Typically, when investors put money into a startup, they expect a five- or 10-time return.

“Snapchat may be showing growth, but it’s not as high as investors expect.”

Total time spent watching Spotlight content grew by 170% from last year, reaching more than 350 million monthly active users in the first quarter. 

But, the company still lags in attracting users to spend more time on the app. 

I think it’s really tough. TikTok remains the main competitor.

Yakov Bart, an associate professor of marketing at Northeastern

TikTok has the highest average time users spend on the social media app at 55.8 minutes a day, according to eMarketer. Youtube has an average of 47.5 minutes, followed by Twitter at 34.1 minutes. Snapchat is averaging 30.8 minutes a day. 

“You can throw in additional incentives at influencers on your platform, but to quickly improve algorithm-based recommendation is very tough,” Bart says. 

Building a competing algorithm requires expertise from engineers and data to train it to predict the best next piece of content to serve the user to keep them engaged.

Snapchat is at a disadvantage because it will take more than creating a new feature. Competitors can easily copy any new feature, such as what Instagram did with Stories. There are no laws for copyright to stop them from doing so. 

“I think it’s really tough,” Bart says. “TikTok remains the main competitor.”
Beth Treffeisen is a Northeastern Global News reporter. Email her at b.treffeisen@northeastern.edu. Follow her on Twitter @beth_treffeisen.