Wanted to scratch an itch in comparing similar technology company offerings, and decided to just compare the companies anyway as an exercise.
Let’s go through some fundamentals before diving deeper.
Let’s be clear that both apps, and its companies are burning cash. The two platforms share very similar features, and audiences. But, both have different value offerings. Tiktok, being a video sharing app, is for short clips played with music. Snapchat is more of a messaging app centered on photos and video sharing using “Stories” that can disappear.
Note also that that TikTok is named “douyin” in China, and statistics usually separate the counts for TikTok (international ex-China) and Douyin (China only).
For context, Tiktok was recently launched in 2018 (internationally). Snapchat was launched in 2011.
The number of users are massive. Tiktok+Douyin has at least 300 million users, while Snapchat has 218 million. And the number of downloads is staggeringly different – Tiktok: 738 million, and Snapchat, 75 million. Why such a big discrepancy? Well, remember this is now counting Douyin (i.e. China user base).
The demographics also differ. Tiktok appeals towards the Gen-Zers, where 42% of users are between ages 13-16. Snapchat appeals more for millenials.
For revenue models, Tiktok is mostly CPM-based (cost per 1K impressions), while Snapchat has various advertising options via its self-serve ad platform, and an e-commerce aspect.
Endless, Endless Content
One of the powerful components of TikTok is its algorithmic recommendations. You can open the app and see endless amounts of comedic material, and time just whizzes by. That is great for advertising.
The average TikTok user spends 52 minutes a day on it, and opens the app at least 8 times a day. How about Snapchat? 26 minutes a day, and at least 20 times a day. Hang on, are we on to something here?
Glorious, Glorious Marketing Funnel
How are the demographics?
Both apps seem like a gift from the heavens for marketers. They offer top-of-funnel opportunities, which means they are very good at driving awareness for brands, as the user-generated content appeals to specific communities associated with a community influencer.
However, Tiktok is essentially driven by users, with short-lasting trends and humor which may not work for all brands.
The demographics of marketers’ target audiences matters – for a young, meme-like interests, TikTok should be the go-to. For slightly longer-term and mainstream interests, Snapchat should be selected.
How about geographic region?
As of Aug 2020, TikTok is facing lots of headwinds from the USA. Being labelled as a front for Chinese spying, there are forced to divest their US operations in 90 days, and few days later, being banned from India entirely. This leaves the door open for other apps, of which Snapchat is primed to take.
According to Oberlo, TikTok has 800 million active users worldwide.
Hang on, outside of China, the next largest markets India and the USA has just banned TikTok. Uh oh.
But, subtract away these users from Tiktok’s 800 million you get….a whopping 569 million. And the revenues are insane. $17 billion in 2019, compared to Snapchat’s $1.7 billion. Look’s like China’s market alone would be enough.
Lets check out Snapchat:
In brief, Tiktok seems to come on top here. But let us take a look at more macro views:
Spying and Government Intervention
TikTok is still in its early stages, as compared to Snapchat. TikTok does face insurmountable odds with government-level interventions however. Snapchat does have some risk in teens getting wound up in sexually suggestive content (producer or consumer), but this is not as big as a problem to governments than espionage.
UPDATE 27 Aug 2020: TikTok’s New CEO from Disney bows out
Novelty Factor & Impressions Count (literally)
My opinion favors having a novelty factor in Snapchat with their disappearing posts and videos, as compared to TikTok. It could be the reason for the increased number of opens, but basically marketers would love frequency for their CPM to hammer home a campaign’s point (and thus conversion), rather than a long duration of screen time where users may just get tired of the ads or app, and switch it off.
TikTok does has its novelty somewhat, but it boils down to the new features it offers to stay relevant, amongst all the other social media apps – not including heavyweights Facebook and Instagram already sucking away attention.
Fads come and go. More finicky audiences will demand new, interesting and hip conetnt. TikTok’s content is also not for everyone – there has been findings of abandonment rates after trying it out, similar to the path of Twitter. Along with the regulatory scrutiny, users may realize that data privacy is something worth more to them, and simply stop using, or transit to another app.
Dependency on Community Influencers
Communities follow a recognized influencer. The moment influencers leave, content stagnates, the attractiveness of the app drops. This is in contrast with Snapchat, which is mainly user-generated content. Alluding to Abandonment Rates, the reason I attribute Snapchat to be stronger is due to the “power of the crowd” – a company does not have to constantly seek influencers and motivate them to keep creating content like a TV show. Why not let the user’s do it for you, while you collect the data and segment audiences yourself?
TLDR: TikTok dominates the Chinese market, and thus Ad revenues, yet will miss the growth of India and USA. Snapchat seems to be more sustainable option, both for holding on to the interest of users, and marketing dollars.