Facebook Inc (FB): Watch Out Snapchat Is Getting Closer


Twitter Inc (NYSE:TWTR) has for years been seen as Facebook Inc (NASDAQ:FB)’s biggest threat in the social networking business. As it appears Snapchat is also starting to make a name for it seen by the amount of video views it is generating. The Los Angeles Startup is now drawing more than 6 billion video views a day compared to four billion views in May.

Snapchat Vs Facebook Video Views

Facebook Inc (NASDAQ:FB), which boasts of over 1.4 billion active users a month, claims to generate an average of 8 billion video views a day. What makes Snapchat video views more interesting is that it generates its views from 100 million active users. Facebook’s numbers also include desktop and mobile views while Snapchat views are limited to mobile devices.

It goes without saying that Snapchat growth on the video front is staggering. The 6 billion views suggest that its users are more active than those on Facebook. Video is becoming a key component of social networking sites as the race for digital video advertising revenue heats up. Advertising rates for videos tend to be much higher compared with static images or text; one of the reasons for increased efforts on this front.

Until now, Snapchat has been charging advertisers for video ads viewed for less than a second. Facebook, on the other hand, charges advertisers for ads viewed for more than 3 seconds. Platforms that will be able to guarantee more quality views, in the long run, should amass a sizeable amount of ad spend on videos going forward.

Facebook’s Eye on YouTube

The online video market is a fast growing spectacle, which could be worth $7.7 billion by the end of the year. By the end of 2019, US advertisers could spend as much as $14.4 billion on video ads alone according to research firm e-Marketer.

Keeping up with the momentum, Snapchat is on track to generate $100 million in revenue according to the Financial Times. The returns should by all standards be a milestone achievement for the photo sharing app considering it only has 100 million users. Facebook should feel threatened by Snapchat aggressive growth as it could dent its ability to attract more ads spend from advertisers.

Facebook Inc (NASDAQ:FB)’s Chief, Mark Zuckerberg, says 500 million people watch videos on the platform on a daily basis. Considering the platform has more than 1.4 billion active users, it still has more room for growth even as Snapchat is putting up a fierce fight. The giant social network does not consider the photo sharing app as its biggest threat for online ad video revenue at the moment.

Facebook Inc (NASDAQ:FB) has set its site on Alphabet Inc (NASDAQ:GOOGL)’s YouTube, which boasts of more than 1 billion monthly active users generating billions of views. However, it will also have to watch out for Snapchat which is playing catch up nicely.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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