While Snapchat has a long way to go before it can generate the same ad revenue and user engagement as Instagram, it is poised to become a dominant player in the social media realm.
A just-released report from L2 comparing the two concludes that the platforms are distinct and each possess different strengths — Instagram is best for more “editorialized” content while Snapchat works well for more casual, less formal content. Moreover, Snapchat — as the “new kid” on the social media block — already has a compelling amount of market share with younger demographics and a high level of “stickiness” with most users.
Moreover, the adoption rate for Snapchat by brands in the fashion, beauty, retail and activewear segments is rising, according to the report, which suggests through case studies that leveraging both platforms may be a smart idea.
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“Snapchat recently surpassed Instagram as the ‘most important’ platform for U.S. teens,” the L2 researchers said in the Intelligence Report: Instagram vs. Snapchat. “With these advances, Snapchat is projected to earn $300 million in revenue in 2016 — seven times higher than 2015 projections.” L2 noted that Instagram’s projected mobile ad revenue this year is pegged at $3.2 billion, which compares to $1.9 billion in 2015.
By way of framing the analysis, the L2 study noted that Snapchat’s market share of total posts is currently two percent, which compares to 77 percent for Twitter, 10 percent for Instagram and 11 percent for Facebook. And when it comes to engagement of users, Instagram is clearly in command with 87 percent share of interactions. This compares to 12 percent for Facebook and 1 percent for Twitter. Snapchat has yet to even move the needle.
“Most staggering is the rate at which Instagram has become the defacto platform for user engagement with branded content — measured in terms of likes, comments, shares, favorites and retweets,” L2 analysts said. “Looking at the beauty industry as a proxy for consumer categories, Instagram — which previously accounted for less that 50 percent of interactions in 2013 — has ballooned to 90 percent of actions taken across social channels, establishing the platform as the connective tissue between consumers, products, visuals and brands.”
Regarding market penetration, Snapchat skews to a more younger crowd with 58 percent of 18- to 24-year-olds using the app while 27 percent of those aged 25 to 34 use it and 8 percent of those 35 and older. This compares to Instagram’s 55 percent user rate for 18- to 24-year-olds and 57 percent for 25- to 34-year-olds. The rate of Instagram users between 35 and 44 is 37 percent and for those between 45 and 54, the rate is 29 percent.
The L2 report also featured several case studies including an analysis of Calvin Klein’s #mycalvins campaign. The analysts noted that the brand used distinct strategies for each platform. “Instagram content was curated and well-produced, mimicking some off-line content, while Snapchat content featured the same campaign in a more raw, conversational capacity using video.”
The researchers said that Calvin Klein also “leveraged Instagram to drive to its Snapchat page, assisting with discoverability, a barrier brands experience on the platform.”
Other key findings from the report includes that Instagram “continues to be the destination for editorialized, curated content, while Snapchat is best leveraged for casual, creative interaction with consumers.”
The report also concluded that while both platforms “offer e-commerce capabilities, their capacities are nascent.”
“Until Instagram is able to provide more sophisticated advertising models, and Snapchat releases updates that allow for more engagement within a snap, brands should utilize the platforms to build traditional brand equity and awareness,” the L2 researchers said.