Snapchat may be taking some major heat from Instagram, who seems hell-bent on destroying the company by copying many of its best features.
But all is not lost, according to new data published Wednesday by Rich Greenfield, an internet and media analyst from BTIG Research.
Greenfield’s analysis: Even though Snapchat’s total user base is growing much slower than people expected, the amount of time its users spend using the app is growing at a nice clip, despite the Instagram onslaught.
Snap users spent a total of 32.8 minutes per day with the app, up from 30.3 minutes per day in Q1, and 27.5 minutes in Q4, according to BTIG’s data. That’s almost a 20 percent jump in just six months during a time when Instagram was offering its own version of Snap’s best product, Stories.
If you look at users under 25 years old, they spend 42 minutes per day on the app, up from 33.4 minutes in Q4. That’s nearly a 26 percent jump. Instagram’s most recent metric is that its users under 25 spend “more than 32 minutes a day on Instagram.”
Snap shared some of these stats, though not as specific, during its last earnings call. But it doesn’t talk about quarter-over-quarter growth when it comes to time spent.
The takeaway here is that Snap, despite taking some good punches from Instagram, is still growing user engagement pretty steadily. Greenfield admits that Snap would likely be bigger without the Instagram competition, but added that things don’t appear to be winner-take-all, as some have speculated. “Both Snapchat and Instagram Stories appear capable of co-existence and growth,” he wrote.
That could also bode well for Snap’s business down the line. The company has argued in the past that its business growth should be measured, at least in part, by using ARPU, or average revenue generated per user.
The more time users spend with Snap, the more valuable they become, because Snap can show them more ads.
Still, advertising is primarily a game of scale, and Snap’s slowing user growth is still a concern. But given that the stock has declined nearly 40 percent since its opening day close back in early March, many investors may be looking for any sign that things aren’t totally doomed. This could help, along with a few other studies recently showing that Snapchat is more popular with younger teens.