Social Media Wars: Facebook vs Snapchat
While this is a highly touted battle of David versus Goliath proportions, you could make an argument that it really isn't even a fight. With Facebook and Google accounting for roughly 99% of digital ad revenue growth in 2016, it looks like it's already over before it's even begun. Not so fast! Brands are desperately searching for a third contender to spend their money with in an effort to boost engagement and influence buying decisions. Facebook is dealing with angry publishers who are getting fewer impressions while acts of violence play out live on their video platform.
Social media networks have a love-hate relationship with just about everyone you ask. Some accept them as a way to keep in touch with their friends and family. Other people swear by them to build their personal brand or business while millions of other people use it as an addictive form of entertainment. No matter what you believe, social media isn't going away anytime soon and these platforms are designed to do a few things really well: Gather data, boost engagement and in turn advertise and sway your buying decisions! They are also extremely impactful on our mental state, both positively and negatively, according to multiple studies. With millions of people abandoning television, brands need new ways to reach the masses and social media is it.
With that in mind, it becomes a lot easier to understand how and why social media platforms are able to get massive valuations without ever making a dime. Before their IPO, Snapchat openly told investors they may never see a profit but that didn't stop millions of people from lining up to buy their stock. What Evan Spiegel has created with Bobby Murphy is a new way to interact with the world while making Facebooks timeline suddenly look ancient by comparison. Mark Zuckerberg is smart enough to have recognized this and has done everything in his power to try to eliminate Snap as a looming threat.
All great social media platforms start out by playing into our very own ego or biological urges. Facebook started as an online "hot or not" game for Harvard students. Snapchat started as a disappearing messaging app that opened up the opportunity to send and receive provocative text messages. In a time where our personal data and privacy are up for grabs, Snapchat has essentially found a new way to give us the illusion of privacy. This raw form of creating and interacting with the world is much more valuable than the out in the open platform that is Facebook.
I still run into people who think Snapchat is for "sexting" not realizing that it's a big contender in commanding digital ad dollars. In fact, the world's biggest ad company is set to spend $200 million on Snapchat this year! There are thousands of other companies who are lining up to advertise on this platform. Beyond just simple social media, Snapchat has also found itself at the forefront of the augmented reality boom. The first time we were introduced to augmented reality on a massive scale was Pokemon Go and we all lost our minds for at least a few months trying to catch imaginary monsters.
So what does this have to do with Facebook going after Snapchat? Mark Zuckerberg saw the potential in this new medium and offered Evan Spiegal, the CEO of Snapchat, $3 billion for the company. Spiegal declined which made a lot of people wonder why as Snapchat wasn't making any revenue at the time. If one of the richest and most powerful people in the world offers you $3 Billion for something that doesn't make any money, you're definitely onto something big.
Augmented reality opens a new way for companies to advertise beyond a boring old Facebook timeline. Imagine walking around Downtown Denver searching for hidden messages on the side of businesses using your Smartphone or "Smart Glasses"? Instead of looking at your phone to navigate using your GPS, your "Smart Glasses" could project bright green arrows on the street for you to follow. Imagine being in a world that is part reality and part your favorite video game and that's what augmented reality will soon become. Zuckerberg went as far as to say that we won't need TVs and that we will be able to project our favorite movie onto a wall using augmented reality contact lenses.
Mark Zuckerberg's string of moves over the next few years tipped his hand even more with how valuable all this really is. Zuckerberg tried to copy Snapchats core features with "poke" in 2012 which eventually failed. Another failed app called "slingshot" was shut down in December 2015. Instead of re-inventing the wheel, Zuckerberg decided to outright copy everything that Snapchat does well launching all of their core features on every one of their apps! Now you can get disappearing messages on Facebook Messenger, Instagram, and WhatsApp!
Before Snapchats IPO, Evan Spiegal said something that confused a lot of people. He claimed that Snapchat isn't a social media company and is actually a "camera company" and that they are reinventing the camera. The tech community and Wallstreet laughed brushing Snap off as turning into the next GoPro rather than the next big social media platform. This all changed at Facebook's developer conference.
During this conference, Mark Zuckerberg essentially said everything Evan Spiegal already had while also going all in on Augmented reality. Facebook has created the world's first open Augmented reality platform for developers to make an unlimited amount of filters to use and interact with the world. This was obviously seen as a direct attack on Snapchat and highlights Zuckerberg's highly competitive side while simultaneously once again displaying how valuable Snapchat really is!
With billions of users and a growing user base around the globe, a lot of people are touting this as the death of Snapchat. You could even point to the rapid rise of Instagrams user base of 700 million people or the 200 million people on their Snapchat copycat Instagram stories.
I say not so fast! By 2022, Augmented reality is expected to command a $117 billion market while digital ad spends will reach $223 billion! There is plenty of pie to go around for everyone especially if you're the one that started it all. As mentioned above, Google and Facebook are dominating the digital advertising landscape. This simply cannot continue and most likely will not. Brands are desperate to find a third contender in this space and Snapchat could be the one! If there is one thing that Snapchat has, it's the ever so valuable millennial demographic that big brands spend unfathomable amounts of money to sway and win influence with. On any given day, you can't find 35% of these people on Facebook or 45% on Instagram. Snapchat has a much more loyal user base as it creates a much more personal experience. The millennial demographic will spend $200 billion annually and $10 trillion over their lifetime.
While Instagrams user base is impressive Facebooks waning engagement is not. It seems like people could be exchanging Facebook for Instagram. The Facebook network is massive and approaching 2 billion people which alone could be enough to bleed a much smaller company like Snapchat dry but most likely won't.
Snapchat, at its core, has a much different approach as a company. They are the laser focused innovators like Apple while Facebook is more like Microsoft with brilliant engineers ruthlessly copying and trying to strong arm smaller companies out of the picture.
Look no further than Nintendo to see that this is already playing out and has been for a long time. Nintendo is constantly compared to the much more powerful PlayStation and Xbox. They never have impressive graphical specs but continuously find fresh, new ways to innovate and change the way we look at video games. Nintendo games, such as Legend of Zelda Breath of the Wild, almost always delight us and raise our standards of what video games should be. All three companies are thriving in different ways while Playstation and Xbox are pretty much carbon copies of one another.
Like Apple, Snapchat is creating a culture of innovation. "You have to get comfortable with and enjoy the fact that someone is going to copy you if you make great stuff" said Evan Spiegel when asked about Facebooks onslaught of attacks. Some jokingly even say Spiegel is actually Facebooks chief product officer. Spiegel even went on to say "At the end of the day, just because Yahoo has a search box, it doesn't mean they’re Google." While it's tough to envision Snapchat as big as Google, the analogy is that they are the originators of this. While there were other search engines before Google, they are the true innovators that created a new way to interact with the world. When we need something, we look to Google before making a decision.
So, who will ultimately win this battle? We won't know for many years and I don't think it really even matters. Snapchat and Facebook will be around for a very long time and it will be exciting to watch these two try to outduel one another. As of now, Mark Zuckerburg continues to blatantly rip off Snapchats core features as Evan Spiegel continues to focus on building a culture of innovation.