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If you’ve started using Snapchat more regularly this year, you’re not alone. During yesterday’s second quarter earnings call, Snap CEO Evan Spiegel announced that the platform has grown both revenue and daily active users at the highest rates it has ever seen. achieved in the past four years. Snapchat now has 293 million daily active users, up 23% from last year.
Snap went public in 2017 with a valuation of $ 24 billion, but shortly before that, the ephemeral photo-sharing app had a huge hiccup: Instagram cloned its then-unique Stories feature. After the launch of Instagram Stories, Snapchat’s growth slowed by 82%. Then, when Snapchat redesigned its app interface, Kylie Jenner tweeted that she no longer uses the app, which caused the company’s valuation to drop to $ 1.2 billion.
But Snapchat held on and made a comeback. Its revenue reached a record high of $ 911 million in the fourth quarter of 2020, then fell to $ 770 million in the following quarter. Now, Snapchat’s revenue in the second quarter of 2021 surpasses its previous record to reach $ 982 million.
The growth of the app in the second quarter could be attributed to the return of advertisers who cut spending during the height of the pandemic, as well as the retention of users who flocked to the app during the lockdown. Like many social media platforms, Snapchat has grown its revenue and user base during the pandemic, but it’s not just about re-engaging users with an app they came from. As TikTok exploded onto the scene and the creator economy exploded, Snapchat continued by creating Spotlight, a TikTok clone, and investing in augmented reality apps.
“We made significant progress with our augmented reality platform this quarter,” said Spiegel. “Over 200 million Snapchatters engage with AR on average every day, and over 200,000 creators use Lens Studio to create AR lenses for our community.”
Last month, Snapchat went viral for its Cartoon 3D-style lens, which makes you look like a character in a Pixar movie. Spiegel specifically mentioned this lens as a feature that “highlighted the power of Lenses to go viral both inside and outside of Snapchat.” But beyond funny face filters, Snapchat is using AR to woo ecommerce partners. The app has developed AR experiences for Walt Disney World, Smile Direct Club, Zenni Optical, elf Cosmetics, Ralph Lauren and more. This includes try-on capabilities for watches, jewelry, eyeglasses, handbags, makeup, and even clothing. At its Partner Summit in May, Snapchat revealed an update that allows users to scan friends’ outfits to find buying recommendations for similar styles.
“We still have a lot of work to do to develop our technology and increase AR adoption, but we are delighted with the results our partners are seeing as we invest in our long-term camera opportunity,” said Jeremi Gorman. , Commercial Director of Snap. . “We are confident in our long term opportunity and are excited to double our buying and trading via augmented reality.”
In March, Snap acquired Fit Analytics, a Berlin-based startup that helps shoppers find the right size clothes and shoes when shopping online. Combined with Snap’s investment in AR, could we possibly use AR to see what size clothing to order? The application of this type of technology should be handled with sensitivity, especially as the rates of eating disorders in adolescents are on the rise.
Beyond e-commerce, Snapchat has sought strategic partnerships with entertainment companies like HBO Max and Universal Music Group and has doubled down on its glasses, glasses that create AR experiences. Of course, Facebook is also working on AR glasses. But for both companies, Snap’s recent successes show the growing adoption and value of AR experiences.
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