Dive Brief:
- Bloomberg reports that Wall Street analysts see Snapchat's growth having an impact on Twitter—and not Facebook.
- "Snapchat’s reach-and-frequency targeting suits brand advertisers that traditionally buy a lot of TV ads," James Lee, analyst at Credit Suisse Group AG, wrote in a note shared with Bloomberg. "[Snapchat's] competitive impact on Facebook, Instagram and YouTube is limited. However, [advertising consultants] are seeing more pressures on Twitter."
- Another analyst, Brian Nowak at Morgan Stanley, recently wrote that Snapchat's growth appears to be having little-to-no impact on Facebook's growth and engagement.
Dive Insight:
Facebook appears to be threatened by Snapchat's rapid growth, with the company rolling out several Snapchat-like features on Instagram, including its new Stories feature and a curated video Events channel. Instagram’s Events channel is a direct competitor to Snapchat’s user experience, and is an acknowledgment that Snapchat has become a key challenger to Facebook and Instagram’s social media reach. But analysts believe that Snapchat's growth is coming at the expense of Twitter, not Facebook.
Twitter has been struggling to attract new users and advertisers, with stagnating user growth and weak ad revenues plaguing its last few earnings reports. Twitter has been hoping to reinvigorate its product through innovative new features including live streaming video and exclusive TV-like content.
Like Twitter, Snapchat is actively going after new opportunities to bring TV-like video content onto its platform. Snapchat has been exploring deals with TV studios to bring mini-versions of popular TV shows into the app, while Twitter has been aggressively pursuing deals to live stream major sporting events, including inking an exclusive deal with the NFL to live stream 10 Thursday Night Football games this year.
