Snapchat Should Cut Off Users Over Age 30
Being alive in the 21st century means being part of the real-time rise and fall of digital platforms. From Friendster to Pokemon Go, many of us have felt the peaks and troughs of digital hype cycles. Snapchat is the hottest social media app today. It has over 150 million daily users, including 38% of U.S. 25–34 year-olds (up from 5% last year), and investors recently valued the company at $20 billion. Snapchat is rapidly expanding its reach with users and advertisers in hopes of blowing away these investors’ expectations. But maybe that’s the wrong strategy. I believe Snapchat would be smarter to cut back its reach and become the first social platform to own a focused market.
The Party is No Longer Underground
Snapchat became a high-growth sensation because it solved a key, eternal need for young people: A fun place to be yourself and carry on with friends, away from the eyes of families and bosses (both present and future). This was a problem created by Facebook as it expanded to become a global social platform. The need for privacy has only increased as Facebook further monetizes its platform by harvesting and sharing more of its users’ data. With expiring images and almost no personal data, Snapchat became the secret social playground of choice. Millions joined and have had a blast using it.
Alas, every party needs to pay a cover charge eventually, and it ain’t cheap to process hundreds of millions of images and videos per day. Today Snapchat is in a full throttled race to cash in. It has beefed up its marketing and advertising teams, launched new ad products, and has multiple ways of proving it can help businesses make money.
But as it begins to work with big, demanding advertisers, Snapchat is starting to compromise on its original user promise. On the user front, Snapchat is doing things that are more friendly to what marketers and us (ahem) older users are used to. Its new “Memories” feature lets people retain photos and images that used to safely expire. The Wall Street Journal (average reader age 51) has one of the coveted Discovery channel slots on Snapchat. Advertising is appearing much more frequently, and often in ways that spoil the fun.
And, of course, now us parents are signing onto Snapchat to see what all the fuss is about. According to its company rep: “Our community enjoys having their parents on Snapchat because it’s a really fast and fun way to communicate.” I somehow doubt that…
Every Category Segments Eventually
Time and again, the brand that establishes and scales a new product or service category ends up driving the market toward splintering and segmentation. For example, Henry Ford created the mass market for automobiles in the 1920s with the Model T. People got used to the idea of owning a car, but they also began to feel a need for variations on the theme. Some wanted more speed, more size, or (aghast) different colors and styles. New entrants came with novel variations that Ford never dreamed of.
In social media, Facebook created the Model T. But now that we’re all connected and comfortable with social, our pain and pleasure points evolve and fragment. Pinterest, for example, is a new platform that is taking share from both social and search with an app that is very focused on planning, shopping and idea discovery. This focus has allowed it to own a space and innovate in ways that Facebook and Google have ignored.
Snapchat has established itself as the social network of choice for teens and 20-somethings, putting it in a position to own a massive niche in the global market. Any move to bring in older users and compromise itself to the advertising standards found on Facebook seriously risks eroding its leadership position.
Facebook Won’t Be Easy to Beat
If you don’t think one market can use its power and cash horde to dominate a new digital market, look no further than Google. The company dominates the Search market, and both large and startup companies understand the folly of going directly against this mighty leader. Or go a bit farther back to Microsoft and its dominant Windows operating system. These companies know how to apply pressure in many forms to maintain their market leadership.
Facebook will be incredibly tough to match or beat at this point. In my personal observation, it is a company in peak financial position with a driven, energized leadership team and general culture. It is setting the standards in marketing and measurement, and it is deeply ingrained with users and businesses. Facebook also has the resources to beat Snapchat and other startups on innovation. It has already borrowed several of the key features of Snapchat, uses Instagram as an additional trump card, and in new areas such as Live broadcasting, Facebook can enter and dominate a market where there is really room for only one exclusive broadcaster.
Perhaps the biggest issue is described by my friend and leading digital marketer, Adam Kmiec. For Snapchat to compete directly with Facebook for mass marketing dollars, it must offer the same level of data about its users. Facebook knows where you are, what you’re reading, and what you do when you’re not on Facebook to a very detailed level, over many years. To match it, Snapchat will have to violate the core privacy promise to its users — a key reason so many joined it in the first place.
If you want proof that a high-growth, massively-used social network can fall quickly without sticking to its core reason for existence, take a look at Twitter’s stock chart. Twitter would love to be the “it” platform for young people right now. Instead it’s a day late and many dollars short compared to Facebook.
An Age Limit Could Transform Snapchat into a Powerhouse
Why fight the industry leader directly when you can offer something that it cannot? Facebook’s desire to be everything to everyone is also its biggest weakness. It would be an incredible move of judo strategy for Snapchat to pull the plug on users once they hit age 30. This would create the world’s largest insider party and ongoing controversy, curiosity and debate that would power user acquisition and loyalty for years to come.
By truly owning this segment of the global populace, new innovations and business models might result. What it loses in mass market advertising it could more than make up for in selling features, events, content, and products — all differentiated and with potentially better margins than an advertising-driven model. New product features would come from what its specific users want — rather than being copies of what Facebook or Instagram are offering.
I believe marketers would actually bend over backwards for the exclusive opportunity to connect with what is already the most difficult-to-reach generation of consumers, who are only at the beginning of a lifetime of spending.
With the power of owning this segment, Snapchat could expand and invent completely new ad units that feel like a value-add rather than an ad-load. Its clever and original branded filters are a great example. Some claim that Gatorade won the SuperBowl ad contest this year by putting its money here, rather than into another TV spot. Snapchat’s unique ad units would be hard to price-shop across commoditized CPM rates, allowing the company to raise prices, instead of already lowering them.
Of course Snapchat will never make such a move. It would be far too risky for a company that has already sold investors on a $20 billion valuation with big plans to expand widely. But if they won’t, the inevitable next platform to build for teen and 20-somethings will be right around the corner. Hopefully it will be started by my own kids — so maybe I won’t have to pay for college after all…
Bob Gilbreath is co-founder and CEO of Ahalogy, a leading performance content marketing solution, and author of The Next Evolution of Marketing: Connect with your Customers by Marketing with Meaning. Follow him on Twitter.
