Snapchat has been revolutionary in the mobile space, allowing users to integrate disappearing pictures and videos to document their lives. Because Snapchat has really reinvented the way that cellphone cameras are utilized, and has an incredible first mover advantage, there is considerable opportunity for them to continue growing. With over 150mm daily users, Snapchat has become a rival to Facebook for advertising dollars with marquis brands finding ways to market their goods and services on Snapchat.
Snapchat has also integrated messing services to increase the time that users spend on the platform, another benefit to advertisers. Between disappearing pictures, stories and chats, Snapchat has created a unique platform.
One of the risk for advertisers is the same benefit that users appreciate - the disappearing nature. Advertisers want to quantify the value which is very difficult in a product like Snapchat. Additionally, Instagram has created a stories feature and upgraded their photo tools to try and compete. With the backing of Facebook, Instagram will be a real competitor.
As Snapchat raises money through the public markets, it will be very interesting to see how they evolve and can monetize their product further.
http://www.goodwatercap.com/thesis/understanding-snapchat/
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