Sunnier Side of the Office

Snapchat Users Shrinking

By: Jessica Gaylord

For the first time since its launch in 2011, Snapchat’s user base shrank by three million people. In Q2 2018 earnings last week, Snapchat reported that despite beating revenue expectations, its daily active users shrank 1.5 percent to 188 million. What would have been good news for Snap was otherwise overshadowed by this troubling update.

Snap blamed the decline on the app’s recent redesign, which separated friends’ chats and stories from the content of media properties, like celebrities and publications. It was largely unpopular with its users and, as a result, the company gradually rolled back some of the changes. It blamed the redesign previously in May when it had less than stellar first-quarter results.

A lack of innovation doesn’t seem to the problem for Snapchat, however. Earlier this month, the company launched new lenses that respond to voice commands like “hi” “yes” “no” and “love.” Augmented reality and camera technology have always set Snapchat apart from its competitors, but with Facebook’s penchant to copy Snapchat’s best features, these advances may not be enough to keep investors happy. Eventually, Snap won’t be able to keep blaming a failed redesign for its woes.

Roku Makes Headlines with Strong Q2 Earnings

By: Arthi Veeraragavan

Last week Roku made headlines for surpassing Wall Street estimates for quarterly revenue.

A leading over-the-top (OTT) provider, Roku allows consumers to stream content from CTV providers such as Hulu, Amazon, and Netflix as well as networks such as HBO and Showtime on televisions.

Q2 success for Roku was in large part due to huge increases in ad platform revenue, a strategic focus for the company.

Q2 earnings:

Ad Platform Revenue: $90.3M – up 96% YOY

Hardware Revenue: $66.5M – up 24% YOY

Days after announcing Q2 earnings, shares of Roku increased 22%. With intense competition from others in the space – including Apple TV, growth at this level is impressive.

With 22 million active account users, new hyper-targeting capabilities, and the provider’s active role in TV and digital video upfront negotiations, opportunities for advertisers to put their brands on the biggest screen in the house at efficient costs are stronger than ever before.

Move Over Aperol Spritz

By: Wells Wallace

Until recently, pre-mixed canned drinks have been notorious for being sickly sweet (s/o Mike’s Hard Lemonade) and the beverage choice of underage girls. In 2013 SpikedSeltzer was born and then two years ago, 4 more hard seltzers entered the market, and the category has taken off. “Between July and September 2017 alone, the combined dollar sales of six major hard seltzer brands (Nauti, Spiked, Smirnoff, White Claw, Truly, and Henry’s) accounted for just under $60 million in sales. It was four times the amount sold in the same time period in 2016.” (Good Beer Hunting). The leading brand White Claw “netted sales of $57 million and triple-digit year-over-year growth of 451%” in 2017 (Bev Industry).

What is driving this trend? For the same reason people love its non-alcoholic sibling, research shows the nutrition label is the #1 driver. For health-conscious Millennials (redundant?) hard seltzer fits perfectly with their lifestyle; it’s a low cal/carb/sugar alternative to wine and beer with less than 100 calories and little to no sugar per 12 oz can. Also noteworthy is that despite a simplified ingredient list, hard seltzer boasts the same if not greater ABV to the average light beer (5-6% ABV).

The other pivotal factor is its packaging. Research that Truly did shows that consumers are buying because of “the slim can packaging for transportation purposes and they are more convenient than bottles for a number of places like “the boat or beach” (Marketwatch Mag). Convenient packaging is a macro-trend happening across categories and can have a huge effect. In the case of hard seltzer, it is so critical that Henry’s Hard Sparkling changed their bottles to slim cans after being on the market less than a year.