As Snapchat struggles with declining revenue per user, social media platforms are turning to fast-growing subscription services and their included artificial intelligence (AI) capabilities to bring in more revenue.
Snap, the app’s parent company, released its fourth quarter and full-year 2023 reports. settlement of accounts On Tuesday (Feb. 6), average revenue per user (ARPU) for the quarter was down 5% year-over-year, despite a 2% increase in North America.
Looking to “accelerate and diversify” future revenue growth, the company is highlighting Snapchat+ subscriptions as a key growth area and adding more AI products to the program to make it more attractive to potential subscribers. Added.
“Our generative AI work… is focused on image and video models that help people edit and generate Snaps in new and interesting ways, and actually bring that to Snapchat+. “We’re using it as an entry point,” CEO and co-founder Evan Spiegel told analysts. On the phone. “I’m really excited that in the fourth quarter he surpassed his 7 million subscriber count on Snapchat+. And, you know, Snapchat+ is going to be more focused on these things that we’re rolling out. I think it’s a way to monetize digital image and video services.”
These efforts to drive paid subscriptions come as overall engagement on the platform continues to increase, with the social media app reporting a 10% year-over-year increase in daily active users during the quarter. I am.
The move to promote paid subscriptions comes as social media platforms find it difficult to get other types of in-app commerce integration off the ground.
PYMNTS Intelligence Report “Tracking digital payment takeovers: monetizing social media” was born in collaboration with. Amazon Web Servicescomes from the Census Balance Survey of approximately 3,000 U.S. consumers and found that 43% of consumers browse social media to find products and services. However, only 14% of them end up purchasing those products or services via social media.
Still, social media apps are trying to increase adoption. For example, TikTok recently new function It aims to make all videos posted on the platform shoppable, allowing viewers to easily discover and purchase the products featured in the videos.
Additionally, across the social media industry, AI has become a key battleground for generating engagement, with leading companies in the space developing new intelligent features for their users. Let’s take meta as an example.
“If we are successful, everyone who uses our service will have a world-class AI assistant to help them get things done. Every company will have AI that customers can interact with to buy products and get support, and every developer will have cutting-edge open source models to build with. CEO Mark Zuckerberg told investors on Meta Thursday (February 1) for the full year 2023. income phone.
As Snapchat faces challenges maintaining user revenue, the company is actively leveraging its AI capabilities and Snapchat+ subscription service to attract more subscribers and monetize its growing user base . Meanwhile, across industries, leading companies are leveraging shopping capabilities to drive revenue and leveraging AI to increase engagement.
