It’s good to be young.

The youth are cool, they create trends, they find innovative uses of technology, and most importantly they influence decisions of their parents expendable income.

Marketers are constantly chasing the next big thing and often rely on teenagers/young adults to point them in the right direction. Watch most television ads and you are bound to view a product influenced by a younger generation.

As you probably know, the disappearing photo-sharing app SnapchatSnapchat lets people send photos and videos that self-delete between one and 10 seconds after being viewed. is BOOMING. The company currently reports that 18.6% of all iPhone owners in the US used the app in June 2013. This is up 10.5% month-to-month and therefore the ninth most popular iPhone app in terms of usage.

If 1-in-5 people in the U.S. with iPhones used the app 6 months ago, how does the app perform now?

Snapchat officials say that users are now sending more snapsSnapchat's term for photos and videos shared over the network. than Facebook users are uploading photos. Business insider intelligence reports that Instagram users upload 55 million photos daily, Facebook users upload 350 million, and snapchat users send 400 million snaps daily. This number is not exactly a direct comparison because it includes photo and video messages. Snapchat does have a much smaller user base so it would be expected that photo volume will be way ahead of Facebook within the next few months.

Source: www.businessinsider.com

This is incredible growth for a small company and is much the reason why they have received large funding from venture capitalists. Facebook attempted to emulate the already successful app with their own app Poke, but have had little traction. It was reported they offered Snapchat $4 billion but the buyout was rejected.

History Repeats Itself.

We saw this same level of speculation during the original internet bubble and we all know how that burst. Facebook went down a similar road and were valued incredibly high based on the huge user base. This led to a need for revenue generation and therefore user dissatisfaction with product innovations. It was such great speculation that the Facebook stock dropped many percentage points immediately after they went public.

Facebook is no longer cool and the teenagers have gone somewhere else. 

According to a survey of over 5,000 teenagers conducted by investment bank and asset management firm, Piper Jaffray, only 33% of teenagers consider Facebook to be the most important social network — 10% fewer than last year. (Source)

Source: www.fosi.org

Snapchat is preparing to overtake Twitter for usage with teens and Instagram is in it’s sights. But how will it make money? How will it manage to pay back the hundreds of millions of already invested dollars? Where are the profits?

For inbound marketers it is important to create long-tail busines practices, for example this blog post will live on until I take it down. But a snapchat, that is gone forever and there is little ability to “click-through” a snap.

It is possible they could add in-app purchases and upgrades to your snaps, or they could charge for the app, or maybe even put a limit on the free usage of the app. Only one of these would increase user satisfaction and that would be in-app purchases, if it were possible to buy widgets or graphic enhancements of your snaps. I can’t see the addition of advertising in the app, though I could see sponsored snaps from interesting companies. For example, you could sign up for snaps from buzzfeed or uproxx. But where is the value? 10 seconds is probably not enough to deliver a strong message and will there then need to be the ability to “click-through” a snap.

Either way, $350 million + in profit is difficult for any company to achieve in their first five years, let’s hear how you would turn snaps into $$$.

Got a better idea?

Tell me in the comments how you would make Snapchat profitable into the future.

About Roger Tower

Digital marketing agent by day and amateur crime fighter by night. This ninja ginja writes about technology trends, social media advancements, and light commentary on our digital culture. Founder of Tower Agency, Roger can be found working hard in the office or playing hard outside.

Positivity is a virtue and there is no shortage with this young entrepreneur.

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