What is Snapchat? An In-Depth Business Analysis

As an entrepreneurship consultant dedicated to helping small and medium-sized businesses succeed, I often get asked – what exactly is Snapchat and should my business care about it?

In this comprehensive guide, I‘ll provide an in-depth look at Snapchat from a business perspective. Whether you‘re looking to advertise on Snapchat or simply engage with younger demographics, understanding this platform is key.

A Brief History of Snapchat

Snapchat began as a simple photo messaging app back in 2011. It was founded by Stanford students Evan Spiegel, Bobby Murphy, and Reggie Brown. What set Snapchat apart was its impermanent nature – snaps would disappear after being viewed.

This idea quickly caught on among teenagers and young adults as a way to share moments privately. By 2012, Snapchat had amassed over 1 million snaps sent per day. The app continued to gain traction by focusing on Android development and expanding its features.

As of 2023, Snapchat reaches over 289 million daily active users with an average user spending 30+ minutes per day. Snapchat‘s success among younger demographics makes it a platform no business can afford to ignore today.

Demographics – Who Uses Snapchat?

As per Snapchat statistics in 2023:

  • Over 78% of 18-24 year olds use Snapchat in the USA
  • An estimated 77.5 million monthly Snapchat users are expected in USA alone
  • Gender split of users is almost equal – 51% male, 49% female

The majority of Snapchat‘s users are among the Gen Z and young millennial cohorts. It is also hugely popular among teenagers with 90%+ ownership among US teens.

This youthful audience and high engagement makes Snapchat the social media platform of choice for reaching younger demographics.

Snapchat‘s Revenue Streams

Snapchat makes money primarily through advertising and branded partnerships. Major revenue streams include:

  • Snap Ads: Video and display ads displayed between stories
Projected 2023 revenue from Snap Ads is $4 billion+ 
  • Sponsored Lenses / Filters: Paid partnerships with brands
  • Discover Channels: Branded content channels
  • Snapchat Shop: In-app shopping features

Developing these revenue channels has been key to Snapchat achieving profitability as it scales.

Marketing Opportunities on Snapchat

For businesses wondering if they should be on Snapchat – the answer is yes, given the size of the young audience.

Snapchat now offers a range of marketing options for brands:

Snap Ads
Buy video and display ads placed between Snapchat stories
Sponsored Lenses / Filters
Pay to have branded AR experiences
Sponsored Geofilter
Location based graphic overlays
Snapchat Story
Post disappearing videos viewable for 24 hours

I‘ve found Snapchat Stories particularly effective for brands as they appear in the same place as user stories. This allows your content to organically blend in the app.

Emerging Trends

Understanding where Snapchat is headed allows businesses to plan effective long term strategies:

  • Augmented Reality (AR): Snapchat drives the adoption of fun branded AR experiences through lenses and filters. I expect Snapchat to double down on AR technology in the future.
  • Short form video: Snapchat pioneered the "Stories" format which has now become industry standard. Vertical, short-form, casual videos dominate the platform.
  • E-commerce: Snapchat is now allowing brands to showcase and sell products directly with shoppable tags. It will continue bridging social conversation to shopping seamlessly.

Snapchat vs. Competitors

Here is how Snapchat stacks up compared to rival platforms on key metrics:

Platform Daily Active Users Key Differences
Snapchat 289 million Ephemeral messaging
Instagram 2 billion Permanent visual content
Facebook 2.96 billion Text and link heavy
YouTube 2 billion Long form video

While Snapchat has the smallest userbase, its growth trajectory and engagement levels show tremendous promise. For businesses that can create viral short video ads, Snapchat provides a thriving ecosystem.

Conclusion – Leverage Snapchat‘s Potential

Given Snapchat‘s rising popularity among teens and young adults in the US, no business can afford to ignore this platform today.

With over 78% of 18-24 year olds using Snapchat, it provides targeted access to the high-spending Gen Z and young millennial demographics.

Businesses should leverage Snapchat‘s advertising products and organic reach through branded lenses, geofilters and Stories.

As visual ephemeral messaging becomes the norm globally, I expect Snapchat to continue its exponential growth. Getting in early allows brands to establish connections with the consumers of tomorrow.

Let me know in the comments if you have any other Snapchat questions!