The competitive world of social media is one that has every business continually looking at what the vast number of their competitors are doing in order to make sure that they stay ahead or at least in step with them. In the battle between Instagram and Snapchat, it’s Instagram that’s delivering the goods and creating space between the two companies when it comes to advertising.
The lures in this case for Instagram are advertising credits and trials that don’t cost those potential advertisers a cent, something that provides the opportunity to assess the value received with no risk involved. That’s an unbeatable deal that Snapchat simply can’t match now or maybe ever.
Back in March, Snapchat went public and admitted that it continues to struggle to bring in revenue and that profitability may never actually occur. While Facebook, the parent company of Instagram, had its own struggles in their first few years as a public company, they eventually found their way back to behemoth status. Snapchat doesn’t have the flexibility nor the level of popularity that Facebook has been able to maintain over the past decade.
Snapchat’s financial numbers in May were slightly down from what was projected and have caused some analysts to downgrade its value. Meanwhile, Instagram has been battering them through the popularity of their Instagram Stories, which are really nothing more than a new take on Snapchat’s temporary versions.
From a market cap perspective, Instagram’s cushion of being directly connected to Facebook gives them the support of a company that’s more than 15 times larger than Snapchat. As many competitors have discovered over the years in countless industries, deep pockets allow for a more aggressive approach in a number of areas. That’s especially true for Instagram, which now appears to have its rival on the run.