Snapchat redesign slows user growth, confirming predictions

After pushing out a redesign focused on separating friends from brands, Snapchat’s user growth slowed in the first three months of 2018. During the first quarter earnings report, Snap Inc. shared the latest user numbers and financials, and while the numbers saw significant increases over the previous year, the comparison from the previous quarter was less positive for the company.

Snap Inc. CEO Evan Spiegel said when the redesign launched that the change would disrupt users and the business — a prediction that’s proving true in the latest reports. Compared to the previous quarter, Snapchat’s daily user growth slowed to two percent. The March numbers, after the redesign’s extended rollout, were lower than the first two months of the year, the CEO said, but still higher than the numbers at the end of 2017. Growth for the last quarter of 2017, which included some of the re-design’s rollout, was five percent.

Spiegel also said that the retention for new users from older generations was higher after the redesign, but didn’t detail how much higher. Making the app simpler for new users to understand was a focus for the app’s redesign.

Compared to the same three-month period from a year ago, however, those user counts look a bit better, with a 15-percent increase for daily active users. Average time spent on Snapchat remained flat at a 30-minute average, even after the redesign.

Spiegel says that the company is continuing to optimize the Snapchat redesign, noting the recent test moving Stories to a right swipe while still differentiating between brands and friends. The Android app has the most optimizing left to do, Spiegel says, and a new Android app, built from the ground up rather than adapting the legacy program, will launch in the third quarter of this year.

Spiegel also noted growth in mobile content and augmented reality, saying the Winter Olympics brought 81 million views for the coverage of the events in the app’s Discover section. The platform’s recent tool to share Stories and Snap Maps had 200 media companies using the embedding option.

Imran Khan, the company’s chief strategy officer, also shared a new tool coming to the platform. Snap Pro is a tool designed for managing a public profile, for everyone from brands and influencers to non-profits. The tool will also include insights and advertising.

Snap Inc.’s revenue increased by 54 percent from the previous year; however, the most recent revenue numbers are actually below the level of just a few months ago, a drop the company attributes to both seasonality and the app’s redesign. The company also completed a round of layoffs that lowered staff numbers by seven percent.

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