What the Rise of TikTok Means for Snap
TikTok has been the most popular app of 2020 and is showing little signs of slowing down.
In the first quarter, TikTok was downloaded 315 million times across Apple and Android phones, bringing total downloads to more than 2 billion. Q1 experienced the most quarterly installs for an app ever, according to SensorTower.
The momentum has continues: App Annie rankings reveal that TikTok was the #1 downloaded app across iOS and Android for the seventh consecutive month in May.
TikTok vs. Snap: TikTok’ mobile, video-first nature that appeals to teens puts the company in direct competition with Snap for user attention. The 13-24-year-old segments reps 69% of the app’s user base. Snap, meanwhile, flexed its muscles at the recent Snap Summit by sharing that Snapchat reaches more 13-24 year olds in the U.S. than Twitter & TikTok combined and Facebook & Instagram combined. This is the first time we have seen Snap compare their demographic reach to TikTok, according to RBC Internet analyst Mark Mahaney.
Room for 2: Jefferies says Snap and TikTok can complement each other and will both benefit from the rise of video content. Furthermore, Guggenheim says it “continues to favor social media and video-communication apps during the global-macro environment of 2020, particularly platforms such as Instagram and Snapchat that are capitalizing on global engagement tailwinds and related direct-response ads.”
Snap innovation: In response to Snap’s recent announcements at its Snap Summit, UBS said it sees SNAP as among the most innovative companies as it relates to “evolving products for verticals video, use of the phone camera and AR.”
Quick stats: More than 170 million Snapchatters engage with augmented reality every day; Snap Maps reaches over 200 million people every month, and the launch of Places will enable local businesses to integrate their Stories, hours, reviews, and food delivery options.
Health of Digital Advertising: The belief is that digital ad trends bottomed between the end of March and middle of April. According to Jefferies, late March was likely the bottom for ad spend and pricing. Despite the stabilization of ad spending, the firm says to not expect a v-shaped recovery.
2020’s ad slump: U.S. advertising spending is expected to drop by 13% this year, according to Group M. Digital ad spending is expected to fall only 3%, but is significantly lower from Group M’s December forecast of a 13% increase.
