Snapchat’s parent company, Snap, has presented new strategies that include expanding beyond its loyal user base, attracting more creators to the platform, and increasing its use of artificial intelligence (AI) to reach profitability. At its annual conference, Snap CEO Evan Spiegel said that an average of 750 million people use Snapchat each month, with the majority aged between 13 and 34 in over 20 countries. However, the company’s net loss tripled to $1.43 billion last year, and it laid off 20% of its workforce. To turn a profit, Snap aims to strike a balance between private exchanges, public spaces, and cultivating a sense of community and intimacy that it has had since its inception. To achieve this, Snap presented new tools and products for creators, users, and advertisers, while remaining true to its roots as an ephemeral and fun messaging service.
Snapchat became a pioneer in using images instead of words to communicate and playfully augmenting reality with AI “lenses” a decade ago. However, Snapchat is not as relevant as TikTok and Meta, according to analysts. To remain relevant, Snapchat aims to increase its user base by 30% to 450 million by the end of next year and increase revenue to $6 billion in 2023, with $350 million of that revenue coming from paid subscriptions. Spiegel said that the company will focus on “increasing our penetration in at least one new large country or demographic” and onboarding more 30- to 40-year-olds. Snap also wants AR-based advertising to make up 10% of its total ad revenue next year.
To attract more creators to the platform, Snap Vice President Jack Brody said that creators find Snapchat a place where they can “express their authentic selves.” However, Snapchat is not considered essential by most social media influencers, who tend to put their energy into making money on Instagram and TikTok. To win them over, Snap presented more ways to be noticed and share in ad revenue. The company also gave more details about ARES, its new business unit that will provide a suite of augmented reality tools for online retailers.
Snap remains committed to augmented reality, which Spiegel thinks “represents the next major evolution in computing,” and the next generation of its Spectacles AR glasses is in development. Snap aims to make $6 billion in revenue and at least $1 billion in free cash flow in 2023. To achieve this, Snap plans to grow time spent on content by 10% per user in 2023, have 35% of users interacting daily with the Map tab of Snapchat, and have 30% of users on Spotlight, its TikTok competitor, every day next year.