US millenials and Gen Zs aren’t entirely replacing their Snapchat addiction with Instagram Stories, according to a slew of new studies and surveys commissioned or collected by TechCrunch.
Yet the fact that 80% of Instagram’s users are outside the US has helped propel Instagram Stories’ rapid ascent to 200 million daily active users last month, surpassing Snapchat’s 158 million users from Q4 2016. That could make it tough for Snapchat to signficantly reverse its declining user growth rate since teens around the world who aren’t already on it may get their storytelling needs met on Instagram.
Facebook’s family of apps has failed to strike a fatal blow to Snapchat, but could still hinder its user growth, forcing Snap to focus on increasing time spent in its app and average revenue per user to expand its business.
Weathering The Instagram Storm
Facebook launched the first shots of its all out war on Snapchat in August, when Instagram prominently added a new feature above its feed. Instagram Stories is an exact clone of Snapchat’s 24-hour ephemeral slideshow Stories feature. At the time, we predicted that Snapchat loyalists would hold firm, but Instagram Stories’ convenient design in an already-popular app and the existing social graph people had built there could make it good enough to deter new users from joining Snapchat.
In January, we issued our report that analytics companies and social media celebrities had seen a significant drop in Snapchat Stories views due to the launch of Instagram Stories and the removal of Snapchat’s auto-advance feature that automatically chains together friends’ Stories. It seemed likely that the competition and product change would lead to a decline in Snapchat growth rate.
A week later when Snap Inc filed to IPO, we learned that Snapchat’s growth rate had declined 82% since the launch of Instagram Stories. It gained just 5 million users in Q4 2016 to hit 158 million users.
Clearly Instagram was having an impact on Snapchat’s future, but the question was whether it would signifcantly rob Snap of its core US millenial user base. That’s what we sought to determine with today’s collection of data sources.
Data suggests that Instagram has caused a decrease in usage of Snapchat, but that the startup is far from dead.
Analytics firm SimilarWeb found that the percentage of all Android devices with Snapchat installed peaked at 25.29% in October, shortly after Instagram Stories launched in August. That percentage has declined slightly to around 23.5%.
The percent of US Android users who are daily active Snapchat users peaked in May 2016 before Instagram Stories launched, and has declined roughly 11% percent since then. Snapchat has managed to increase time spent on its app 7 minutes, or 45%, over the past 18 months. But it’s swift growth rate turned into a decline after Instagram Stories launched, sinking from roughly 22 minutes before to a low of 19 minutes and 27 second after. Snapchat is now growing again and is currently at roughly 24 minutes.
Data company 7Park found that the number of Snapchat user sessions declined significantly among users who started using Instagram Stories. It also found the number of daily active Snapchat users declined faster amongst Instagram Stories users, according to the 14,000 people it studied. The launch of Facebook Messenger Day did not have the same impact on Snapchat though.
Analytics firm Jumpshot found that the launch of Instagram Stories did not noticeably impact the share of email signups between Instagram and Snapchat at first, with Snapchat holding steady around 76%. But as Instagram Stories gained steam by the end of 2016, Snapchat’s percentage shrank to 64%.
Media startup The Relish found Instagram Stories added to its overall impressions, reach goals, and engagement. Meanwhile, it never saw major growth or engagement on Snapchat Stories, so the launch of Instagram’s version made it a “a no brainer to hold our efforts [on Snapchat] until we have more staff”.
Mobile video platform dubdub found that Instagram Stories generated an average of 35% more views for brands than Snapchat Stories. However, Snapchat had a deeper influence on millennial, and its sponsored lenses selfie filters “can generate millions of gamified interactions within 24h that can help shift brand awareness and purchase intent.”
eMarketer estimates that Snapchat’s revenue growth will decline significantly in 2017 and 2018. It grew 492% from 2015 to 2016 when it hit $340 million in ad revenue. Revenue is projected to hit $895.5 million in 2017 as the rate drops to 163.3%, and $1.7 billion in 2018 with the growth rate falling to 90%. Still, 90% is a solid growth rate, and the decline is to be expected as Snapchat’s business matures. eMarketer did find that Snapchat has a massive 83.4% penetration rate amonst 12 to 17-year-olds in the US.
This data suggests that Instagram has made a dent in Snapchat, slowing its growth and making it a second choice behind Instagram for some brands. But surveys of Snapchat loyalists show a strong preference for the cool startup over the Facebook acquisition.
Mobile story game maker Episode surveyed its 10,000 of its users who are mostly women age 13 to 25, and found that 69% say their Snapchat usage hasn’t declined at all since the launch of Instagram Stories, while 22% say their usage has declined slightly, and only 9% say it’s significantly declined.
Analytics provider App Annie found that Snapchat hosts an exclusive audience that often can’t be reached by advertising on other platforms, as previousy reported by Bloomberg. On a given day in the US, 35% of daily Snapchat users can’t be reached on Facebook, 46% can’t be reached on Instagram, and 58% can’t be reached on Messenger.
Brand ambassador network Heartbeat surveyed 1700 13 to 20-year olds out of its 103,000 users. 74% said they still post more on Snapchat. 60% said they post to their Snapchat Story every day compared to just 18% on Instagram. However, they say the average 2.5X more views on Instagram Stories than Snapchat. Asked which of the two apps they’d take if they could only have one, 51% said Snapchat while 49% said Instagram. 77% said ads were more relevant on Instagram. But only 19% though their Snapchat Stories views have declined since the launch of Instagram.
Heartbeat’s founder Kate Edwards tells me “we have seen a significant decrease in the number of brands inquiring about Snapchat campaigns, and while we do run Snapchat campaigns for some brands, we almost always recommend that they do Instagram and Instagram Stories campaigns instead, simply because the tracking is much more robust.” She concludes that “Honestly, we think Snapchat is losing out on a number of potential revenue opportunities out there, if we’re any example, simply because they don’t understand the value of data to brands and the businesses who are advising them on how they allocate their media spends”
Whatsgoodly surveyed 1,991 millennials in April and 1,106 in November. It found that Snapchat was overwhelmingly preferred over Instagram Stories, but the percentage that picked it fell from 88% in November to 78% in April.
Mobile ad company Kiip surveyed 10,000 users. 37% said their use of Snapchat declined since the launch of Instagram Stories. 59.6% said they preferred Instagram Stories over Snapchat Stories. However, when asked what feature of Stories they find most important, Snapchat’s animated selfie filters were most popular with 38.2%, followed by Instagram’s Live broadcasting feature with 31%.
They surveys indicate that millenials and generation Z millenials may still be staying loyal to Snapchat. They might have a larger network on Instagram, and they might already be using Instagram’s permanent feed. But these early adopters of Snapchat developed an ingrained behavior of opening and posting to it daily. While people new to the Stories format might find Instagram more convenient, Instagram hasn’t created a compelling enough reason for diehard Snapchatters to switch.