Snap had one of its most unexciting years to date. As 2018 went on, the company began to lose both talent and users. At the same time, it set loftier plans in motion to compete with its greatest competitor, Facebook, through augmented reality, new merch, and another version of Spectacles, despite tons of unsold stock. This year, it seemed Snap had a bigger game plan and we’re seeing it try to execute – but none of that matters if the company has no staff or users.
Just this year, Snap lost CEO Evan Spiegel’s right-hand man, Imran Khan, who served as chief strategy officer; its head of finance Andrew Vollero; vice president of monetization engineering Stuart Bower; its head of sales Kristen O’Hara; and its president of hardware Mark Randall. On top of those intentional departures, the company laid off more than 100 engineers, as well as two dozen other employees, some from their branded content department.
To continue the company’s bad year, Snap finally launched its redesign, which it announced in 2017, only to find that it pushed two million users to leave the network. Those people represented two percent of its daily active user base. The loss didn’t stop in the second quarter, either. In November, Snap said its daily active users dropped again, but this time, the company said it would make its Android users a priority in an effort to grow. It’s something Snap has said before without any real action toward this. If it wants to appeal to a global audience, Snap needs to invest in its Android app in the very near future. Currently, it only has 186 million daily active users against Instagram’s 400 million daily active Stories users.
Not everything was terrible for the company this year, however. The company managed to diversify its revenue with new merchandise, including some that feature users’ Bitmoji hanging out with their friends’ characters, as well as shoppable AR Lenses. We might get a sense of how well these things sold next year, but it’s tough to imagine merch will keep Snap afloat given it’s sold kitschy items like towels and plushies before, and people just aren’t excited about them as they used to be.
Snap also couldn’t let the Spectacles dream die, and launched version two, as well as a couple fashionable sunglass options that are sold in department stores like Neiman Marcus to cater to a higher-end customer. Last year, hundreds of thousands of unsold Spectacles sat in a warehouse. The company hasn’t provided details on how the new line is doing, but in a particularly ironic twist, Snap’s PR agency sued influencer / model Luka Sabbat for not holding up his end of a contract to wear Spectacles during the Paris or Milan Fashion Week. The deal didn’t even require him to post himself wearing Spectacles on Snapchat. Instead, the team wanted him to post about them on Instagram, which says everything about where users actually exist.
To appeal to creators, Snap launched Lens Studio, which lets people design and release AR filters built off included tools, objects, and effects. It announced new original programming, too, called Snap Originals, that’ll feature unskippable six-second advertisements built-in. Both of these aren’t new or exciting ideas, but they’re things Snap believes will help generate revenue by getting creators on board to create viral effects. While they may be somewhat attractive to advertisers, given prices have gone from extravagant to bargain, they may not be enough to win back the users that are constantly flocking to rivals.
Final Grade: D
The Verge 2018 report card: Snap
- Launched Lens Studio for creators
- Diversified revenue
- Investing in Snap Originals
- Lost lots of talent
- Lost users
- Definitely still losing to Instagram