Snapchat—the photo/video sharing mobile app—is marketing gold for teenagers, but as the company is set to debut on Wall Street’s biggest stage with its initial public offering- which now values the company at around $24 billion—the big question for investors is can they gain ground with the folks over the age of 30?
According to eMarketer, a NY-based research firm, 81.7% of Snapchat’s U.S. users were under the age of 35 last year. But as those users grow-up, the group may help lead and expand the next generation of “snappers.”
“We expect that more people ages 35+ will start to use the service as it builds out its content offerings. Many publishers and TV networks use Snapchat to distribute exclusive content, and we think this will have more appeal to older generations over time,” Debbie Aho Williamson, Principal Analyst at eMarketer tells FOX Business.
eMarketer projects that Snapchatters over the age of 45 are projected to make up just between 12% to 13% of the app’s users in 2018 and 2019 respectively. However, as the company becomes more mainstream following its IPO, that number could grow.
Linda Pierce, 47, from North Fork, NY tells FOX Business that she’s definitely interested in using Snapchat but just hasn’t found the time yet.
“I’m a busy working mom but I don’t have any time. I love Instagram, love Facebook, well, sort of, but haven’t gotten around to Snapchat yet,” she says.
While Jason Raznick, 38, from Michigan, who goes by “Michiganstartup” on Snapchat, says he uses it as his main form of communication.
“Facebook is too much bragging,” he says. I went on Snapchat a year and a half ago and I use it all time.”
Eric Kim, Co-Founder and Managing Partner at Goodwater Capital, says while adults are slowly getting on board with Snapchat, the relatively low penetration in the 30 + segment can either be a “huge risk or an enormous opportunity” for investors looking to get a piece of the soon-to-public tech company.
“Facebook faced the same question when they went public...’will this social app used by college students and teens become a mainstream platform and utility’?”, Kim tells FOX Business. He notes that is one of the reasons why Snapchat is now positioning themselves as a “camera” company in hopes to gain more sophisticated eyes. The company recently rolled out sunglasses that can take short video clips that retail for about $130 a pair.
“They are trying to be the "lens" through which you experience both social communications as well as media content - most likely, the media content side will expand their user base more than the social communication side,” he adds.
Laura Martin, Senior Internet Analyst at Needham & Co., says investors aren’t really worried about Snapchat’s younger appeal especially because the age group is where advertisers want to be.
“Snapchat is really limited to a small niche but it’s a really valuable niche,” Martin tells FOX Business. “The concern is how can they broaden that? Facebook has 1.5 billion people. Another concern is that you can only use the app in the first world with high-end devices. Facebook doesn’t have that problem.”
Even as the company aims to widen its user base, some adults won’t take the bait. “I have no interest in it. I try to stay away from social media. I sent email messages to my wife and I text my kids. I even logged off of Facebook,” Teri Doyle, 51, from Far Rockaway, NY.
Snap Inc. will begin trading on the New York Stock Exchange (NYSE:ICE) under the symbol ‘SNAP’. Shares priced at $17 each, raising $3.4 billion. Snap has the richest valuation of a U.S. tech IPO since Facebook in 2012.
On the eve of the deal, Facebook (NASDAQ:FB) shares hit a fresh record and have gained more than 19% this year.