Snapchat: What if Evan Spiegel is right?

Fallout from the Snapchat update means shares in Snap Inc are now 17 per cent cheaper than they were yesterday. Evan Spiegel has stated that the update won't be reversed; users will have to like it or lump it. Or leave. Our analysis of user intentions suggests that Snapchat's users are far from decided on what to do next.

Never prejudge the results of research. Let the story emerge and only then make your mind up.

It’s a simple, valuable lesson which has just kicked me again this week. When we decided to refresh our analysis of the feelings of Snapchat users, we were confident that the signal would point to high levels of dissatisfaction, with more users expressing an intention to leave. What we discovered was a mixed situation; users are unhappy for sure, but are they leaving? Do they even intend to leave?

Back in February 2018, Snapchat deployed a controversial app update which we covered briefly here. Users were not happy and their overriding emotion was one of anger.

Today we learned that Snap Inc shares have fallen by 17% on lower-than-expected growth in new users and concerns about retention. The company has warned that growth in users and revenue could slow substantially in the second quarter.

Snap’s CEO has blamed the app redesign for “disrupting user behaviour” and creating some “apprehension” among its advertisers. This doesn’t look good.

There’s always more than meets the eye once you start to look beneath the surface. So we revisited our February data and brought it up to date by digging into how users are feeling now.

The slide in the share price has been attributed to two related concerns; the slower rate of user acquisition and the risk of a drop in retention. We know that Snapchat’s growth didn’t meet expectations, but have they actually lost users?  Only Snap knows the real picture. For our own analysis, we are using social media as a proxy.

We filtered our new data to show only those users who have expressed a desire to leave Snapchat (Fig. 1). Around the time of the controversial app update, these expressions peaked. However, the incidence of users expressing an intention to leave returned to normal once the initial reaction had died down. 


What this might tell us is that although people reacted angrily to the update and threatened to leave, they didn’t.

In fact, if we plot daily data since the app update to the present (Fig. 2), we can see a downward trend of “leave Snapchat” expressions (apart from a peak when Rihanna re-ignited the discussion by slamming an offensive advert on the app.)


Therefore, we could hypothesise that Snapchat is not attracting as many new users, but neither is it losing significant numbers of existing users. If this is the case, then one half of the equation which sent the shares down needs to be reviewed.

A Word Of Caution

Snapchat does need to be careful – they are in a fragile position. The anger expressed by users in February has matured into higher levels of mistrust.  There is more anxiety and disappointment too. Existing users may not be leaving, but they feel disillusioned and consequently they are becoming more disengaged (Fig. 3). This could explain why Snapchat’s daily active user [DAU] numbers stalled in the first quarter. The people are still there, but they are demotivated.

For Snapchat’s advertising partners, this is bad news either way.  Advertisers want a large pool of users and they want those users to be engaged with the platform. For Snapchat, it represents a challenge to reset a faltering relationship. CEO Evan Spiegel has consistently backed the update, so more dialogue would help alleviate the problems caused by February’s imposition. As it is, there are lingering embers of scepticism. Users are primed to retreat further away or leave if they feel they have been let down again.


Some of our previous posts have highlighted that brands, on the whole, recover from the “spikiness” of angry reactions. What is more difficult – and harder to know – is the recovery from the slow-burn erosion of trust. Over the next three months we will be checking in with Snapchat users to understand if their levels of motivation are improving. This will be a useful signpost for where Snapchat’s retention and DAU rates are likely to be come Q2 results.

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