By now you know: Snap Inc.—self-proclaimed camera company, fast-growing messaging app, and depending on who you talk to, either the next Facebook or the next Twitter—is a publicly traded company. But here's what you may not know: It's already a wildly popular investment choice among millennial investors. The Wall Street Journal reported last week that 43% of online brokerage Robinhood's users bought shares of Snap on the day it went public.

Given the overlap between the user bases of Robinhood and Snap—both skew heavily millennial—this may seem like smart investing. It was none other than master investor Peter Lynch who advised a generation of individual investors to strongly consider buying the stocks of companies with whose products they were familiar (the oft-quoted "buy what you know"). But early investors in Snap's publicly listed shares have already experienced quite the ride. After spiking in its first days of trading as investors clamored for the shares, demand has declined and Snap is down more than 25% from its intraday high.

Where does Snap go from here? I won't pretend to know. But no matter what happens next, beginner investors who bought shares of the company should be proud that they got started investing in stocks and—provided they stick with it—stand to learn a lot about investing. 

As for what those lessons will be, that's going to depend on whether or not Snap succeeds as an investment. Let's take a look at three potential lessons from two possible futures.

If Snap wins from here:

1. Visionary leadership is a good thing

From competition to questionable economics, there are a lot of forces working against Snap's success. But if there is something working for it, it's the obvious dedication and vision of co-founder and CEO Evan Spiegel. While Spiegel is a somewhat controversial figure, it's clear from the company's prospectus that he has strong opinions about the future of Snap. From declaring that Snap is a camera company to being explicit about the company's willingness to take risks to build engaging products, this is not a company that it will inadvertently lose its strategic direction. In fact, in order to be sure that the direction of Snap is determined by Spiegel and Spiegel alone, the shares of stock that Snap sold to investors do not have any voting rights. That means shareholders can't weigh on management performance, the composition of the board, or even executive compensation. What's more, Spiegel continues to own nearly 20% of the company, giving him a vested interest in increasing the value of the firm. 

There is a tradition of visionary CEOs from Sam Walton to Steve Jobs to Jeff Bezos to Mark Zuckerberg who have seemingly willed their companies to greatness even when Wall Street didn't understand what those executives were trying to accomplish. If Snap succeeds from here, Spiegel is in a position to be added to that list and serve as another example that leadership is as fundamental to investing success as financials.  

2. It's important to keep a long time horizon.

Snap investors are undoubtedly feeling some anxiety around the company's recent 25% plunge. And regardless of whether Snap wins or loses for investors, investors should be prepared for frequent additional significant plunges. Consider, for example, Michael Batnicks' recent look at the performance of Amazon over time. He observes eloquently that "Amazon's path to a 38,000% return was filled with heartache, despair, and nausea." That's because it experienced a three-day 15% or more decline 107 different times.  Amazon, however, stayed focused on running its business, and Amazon investors who did the same have been handsomely rewarded for tolerating that volatility.

The lesson for Snap investors is that even if the stock works out to be a fantastic, this won't be the only time you may feel sick to your stomach.

3. It's hard to forecast growth

Credit Suisse strategist Michael Mauboussin recently put out a paper on base rates -- a study of the frequency with which certain events actually happen. In the case of three-year sales growth, for example, he finds that while analysts forecast a fairly normal distribution of results, that forecast is far too narrow. There are fewer -10% to 10% growers than expected and more companies than forecast that experience sales declines or more than 10% or sales growth of greater than 10%. That's particularly true of companies that grow sales 45% annually over a given three-year period. While analysts expect zero companies to actually achieve this feat, Mauboussin found that this has happened about 2.5% of time (or 1,318 instances between 1950 to 2015).

In 2016, Snap grew sales from $58.7 million to $404.5 million -- a 589% increase. No one is expecting this rate of growth to continue. But if it does, even at a substantially lower rate, Snap may exceed expectations just as Facebook has. Predicting growth, particularly when it comes to technology, is hard, and that can be an opportunity for investors. 

That future is far from assured, if Snap turns south you can bet these lessons will be learned: 

1. Valuation matters

Snap is currently worth just under $30 billion. Today, an average company trades for approximately 25 times its annual earnings. Ergo, were Snap an average company, we would expect annual profits of $1.1 billion. But Snap is not an average company. I know this because Snap did not make $1.1 billion last year. Rather, it lost $514 million. 

Should a company that's losing half a billion dollars annually be worth $27.5 billion? Historically, the answer to that question has been "no." This is to say that Snap not only has to reverse those losses to justify its current valuation, but it has to make a lot of money in the future to not only maintain that valuation, but to cause it to increase (which is how investors will make money from here). If that doesn't happen, Snap shares may underperform even if the business continues to operate respectably.  That's what happens when investors overpay.

2. Corporate governance matters

Even if you believe Snap's visionary leadership sets it up for success, vision without accountability is a potentially dicey proposition -- and that's exactly what Snap has offered with the combination of founder control and non-voting shares. Consider, for example, the plight of overconfident CEOs (and categorizing Spiegel as overconfident does not seem unfair). Not only are overconfident CEOs more likely to destroy value with their investments, they are less likely to pay dividends to shareholders (meaning they retain more value to destroy) and are the most likely of all CEOs to misstate earnings results. 

Nowhere is this more apparent than in the mergers and acquisitions space, where 90% of deals fail to achieve pre-deal expectations. Repeat offenders in the tech space such as Yahoo! and HP continued for years to spend billions of shareholder dollars on acquisitions with little tangible benefit, and it's taken activist investors at each for management to sit up and take notice of their shortcomings. This cannot happen at Snap because investors have no say in how the business is run. If Snap fails from here, it may be because management is setting money on fire and no one can stop them. 

3. Recent IPOs are hard

There's an obvious, but overlooked truth about initial public offerings, or IPOs. And that's that the company that's IPO-ing knows when it's going to happen. This is important because companies spend years preparing for their IPOs and they are often timed in such a way as to allow the company to put its best foot forward and realize the most favorable valuation from investors. 

For example, I mentioned earlier that Snap grew sales an eye-popping 589% last year. That's impressive, but it's not an accident. Snap likely focused on and spent heavily to achieve that sales growth knowing that that would be a metric valued by new investors. This is one of a number of reasons why recent IPOs are well-documented to on average underperform the market's return. Generally speaking, it's worth watching a newly public company for a period of time to see how it performs after the shine wears off and how management stands up to the new scrutiny of being public. 

What happens next?

But regardless of whether Snap is up, down, or sideways from, it should go without saying that you as an investor need to own more than just one stock. Doing so helps spread out the risk of one or more of your investments not living up to original expectations, whatever the reason. 

Achieving this diversification can be as easy as buying a low-cost index fund or getting into the habit of saving and regularly making new investments in stocks. Over time you should seek to build out an entire portfolio of investments to help you achieve your long-term financial goals.

So congratulations if your investing journey has begun with an investment in Snap; it just shouldn't end there.

SEE ALSO: Investment managers are still using technology from 1996 to manage money

Join the conversation about this story »

NOW WATCH: Here’s why flights take longer than they did 50 years ago

Snapchat maker Snap Inc. is still expected to exponentially grow its ad revenue in 2017, but by not quite as much as originally expected.

A new report from eMarketer on Tuesday slashed Snap's projected ad revenue by $30 million, to $770 million from $800 million. The cut, according to eMarketer, was due to "higher-than-estimated" revenue sharing with publishing partners in Snapchat's Discover section.

Snap's stock has mostly fallen since the company went public at $24.48 on March 2, with shares hitting an all-time low of about $20.50 on Tuesday.

The company's publishing partners, which include the likes of BuzzFeed and Vice, produce original content for Snapchat every day in exchange for sharing revenue from ads placed with their content. In the paperwork for its initial public offering, Snap disclosed that it paid these publishers $58 million in 2016, up from $10 million in 2015.

While eMarketer's predictions would still mean a 158% increase in ad revenue for Snap, the research firm noted that "Snapchat's ad business, which is made up entirely of mobile display, is still small."

Snap is predicted to account for 1.3% of the US mobile ad market in 2017 and grow to 2.7% by 2019. By comparison, eMarketer expects Facebook to control 25% of the US mobile ad market this year, while Google is expected to wield 32%.

SEE ALSO: Goldman Sachs is predicting that Snap will deliver $2 billion in revenue in 2018

Join the conversation about this story »

NOW WATCH: WPP CEO Sir Martin Sorrell on Snapchat becoming the 'third force' to Google and Facebook

Your company no doubt has a social media strategy…but is it working?   

If you’re like most marketers, you see encouraging signs in your social media outreach: pageviews, follows, likes, retweets. But how do you turn that interest into actual revenue?    

You’re not alone if you’re asking. It’s the $64,000 question that even the most successful marketers are struggling with.   

Let’s face it. There’s no doubt about the leading edge in marketing—it’s social media. And as with any new marketing tool, fascinating breakthroughs go hand in hand with surprising failures.   

Not only are new social media platforms sprouting up everywhere you look, but the blue chip social media names-- Twitter, Facebook, Instagram, Snapchat, etc.—are evolving right before our eyes.   

And let’s not forget that all consumer behavior changes. But the most avid social media users—millennials—are the most discerning and demanding potential customers on the planet.     

So your marketing challenge is a formidable one: Adapt your advertising and marketing to a rapidly-changing demographic through a medium that will likely look entirely different just five years from now.   

We’ve got the solution.    

In one simple step, you can acquire the critical information you need to understand the latest trends in marketing through social media.   

It’s a shortcut that can revolutionize your business, leapfrog your competitors and grow your company’s bottom line all at once: The eMarketer Social Media Bundle.

The acknowledged leader in the field of digital economy research, eMarketer, is for the first time making four of their most popular reports on social media for marketers available to non-members like you.     

With one simple step, you can acquire the most comprehensive, wide-ranging and valuable research on marketing to users of social media anywhere.    

Only The eMarketer Social Media Bundle gives you an in-depth look at how social media is being used today and where it’s headed tomorrow.    

No matter at what stage your social media marketing efforts are, this resource will help you catch up to—or stay one step ahead of—your competition:      

• Social media neophytes can avoid many of the time- and money-wasting mistakes that early adopters already made.
• Moderately-experienced social marketers can use our insights on the most powerful new social trends to graduate from the basics to serious power marketers.
• Social media experts can delve into our targeted reports on two of the most powerful new platforms, Snapchat and Instagram, to kick already sophisticated marketing campaigns into overdrive.

In short, this is the kind of analysis you need to make the most of your social marketing initiatives.    

There is no one single “magic bullet” to generating revenue from social media, but this research collection gives you perspectives and insights that will pay for themselves dozens of times over.   

A One-Of-A-Kind Resource

Just a few minutes with this special research collection will reveal why it is superior to any similar product:

• Breadth and depth of research: The reports in The eMarketer Social Media Bundle have scores of insights, revelations and facts. Because their researchersspecialize in gathering research from as many sources as possible—academic institutions, government data, industry associations, online media platforms, audience measurement firms, and other media researchers and consultants—you get both the most important big-picture insights and the granular detail you need to use it to its fullest potential.    
• Specific companies and technologies: Each report not only looks at the broader trends within social media commerce, it names the specific companies that are on the leading edge of innovation. This means you get both side of the picture—the leading platforms and the marketers and brand managers that are exploiting the platforms to the fullest potential.  
• Expert analysis: The report authors have decades of experience in researching and analyzing all aspects of the digital world, from advertising, marketing and social media to technology, apps and demographics. They know how to separate the noise from the valuable insights and never bog you down in trivia or ignore the obvious.    
• Informed forecasts: The authors don’t just report what’s working today. They conduct scores of interviews with executives, advertisers, media buyers, and marketers to not just confirm the raw data, but also forecast where growth opportunities will be in the years to come.

Not Available Anywhere Else

Typically, these exclusive reports are only available to a select number of eMarketer subscribers. But for the first time, eMarketer is making The eMarketer Social Media Bundle available for purchase, and this is the only way you can get it!

But that's not all! Order today and you'll save more than 50% off the price you’d pay if each report in the bundle were sold separately. Click here to purchase the bundle.

Join the conversation about this story »

Google and Facebook are increasing their lead in the U.S. digital advertising market, which is poised for double-digit growth, according to the latest eMarketer forecast.

eMarketer predicts U.S. digital ad spending will reach $83 billion in 2017, an increase of 15.9%. As part of this growth, Google will continue to hold its dominant position and represent 40.7% of all US digital ad revenues this year, which would be more than double Facebook’s share.

The research firm anticipates Google’s search market share will rise 16.1% to $28.55 billion this year. Furthermore, the search giant will hold approximately 78% of total U.S. search ad revenues in 2017.

“Google’s dominance in search, especially mobile search, is largely coming from the growing tendency of consumers to turn to their smartphones to look up everything from the details of a product to directions,” said eMarketer forecasting analyst Monica Peart. “Google and mobile search as a whole will continue to benefit from this behavioral shift.”

But while Google will continue to dominate search, Facebook will be the king of display ads. The social media giant's U.S. display business will surge 32.1% to $16.33 billion, which would give it a 39.1% share of the total U.S. display market, according to eMarketer. This would take some market share away from Google, Yahoo, and Twitter.

Growth in both usage and time spent has spurred Facebook’s revenue growth, and these factors make the platform continually attractive to more advertisers. Instagram is also helping push that revenue growth. In fact, Instagram will account for 20% of Facebook’s U.S. mobile revenue in 2017, up from 15% in 2016.

Google’s display business will climb somewhat to $5.24 billion, but its market share market will dip to 12.5%.

“Facebook’s users are increasingly captivated by videos on the platform—not just on Facebook, but on Instagram as well. Video, both live and recorded, is a key driver of growing user engagement and advertiser enthusiasm,” said Peart.

As for the recently-public Snapchat, the social media company is poised for tremendous growth in 2017. This year, the company's ad revenue will explode 157.8% to $770 million in the U.S. That would be just below the $800 million previously projected because of higher-than-expected revenue sharing with partners.

Snapchat’s ad business, which consists of only mobile display, is still small. The company's U.S. mobile ad market share will be just 1.3% this year, but will grow to 2.7% by 2019.

These projections amid the shifting landscape of social media consumption and digital advertising are crucial for any marketers and advertisers who are trying to get their brand into the public's mind and ultimately turn that recognition into dollars.

If you’re like most marketers, you see encouraging signs in your social media outreach: pageviews, follows, likes, retweets. But how do you turn that interest into actual revenue?    

You’re not alone if you’re asking. It’s the $64,000 question that even the most successful marketers are struggling with.   

Let’s face it. There’s no doubt about the leading edge in marketing—it’s social media. And as with any new marketing tool, fascinating breakthroughs go hand in hand with surprising failures.   

Not only are new social media platforms sprouting up everywhere you look, but the blue chip social media names-- Twitter, Facebook, Instagram, Snapchat, etc.—are evolving right before our eyes.   

And let’s not forget that all consumer behavior changes. But the most avid social media users—millennials—are the most discerning and demanding potential customers on the planet.     

So your marketing challenge is a formidable one: Adapt your advertising and marketing to a rapidly-changing demographic through a medium that will likely look entirely different just five years from now.   

We’ve got the solution.    

In one simple step, you can acquire the critical information you need to understand the latest trends in marketing through social media.   

It’s a shortcut that can revolutionize your business, leapfrog your competitors and grow your company’s bottom line all at once: The eMarketer Social Media Bundle.

The acknowledged leader in the field of digital economy research, eMarketer, is for the first time making four of their most popular reports on social media for marketers available to non-members like you.     

With one simple step, you can acquire the most comprehensive, wide-ranging and valuable research on marketing to users of social media anywhere.    

Only The eMarketer Social Media Bundle gives you an in-depth look at how social media is being used today and where it’s headed tomorrow.    

No matter at what stage your social media marketing efforts are, this resource will help you catch up to—or stay one step ahead of—your competition:      

• Social media neophytes can avoid many of the time- and money-wasting mistakes that early adopters already made.
• Moderately-experienced social marketers can use our insights on the most powerful new social trends to graduate from the basics to serious power marketers.
• Social media experts can delve into our targeted reports on two of the most powerful new platforms, Snapchat and Instagram, to kick already sophisticated marketing campaigns into overdrive.

In short, this is the kind of analysis you need to make the most of your social marketing initiatives.    

There is no one single “magic bullet” to generating revenue from social media, but this research collection gives you perspectives and insights that will pay for themselves dozens of times over.   

Just a few minutes with this special research collection will reveal why it is superior to any similar product:

• Breadth and depth of research: The reports in The eMarketer Social Media Bundle have scores of insights, revelations and facts. Because their researchersspecialize in gathering research from as many sources as possible—academic institutions, government data, industry associations, online media platforms, audience measurement firms, and other media researchers and consultants—you get both the most important big-picture insights and the granular detail you need to use it to its fullest potential.    
• Specific companies and technologies: Each report not only looks at the broader trends within social media commerce, it names the specific companies that are on the leading edge of innovation. This means you get both side of the picture—the leading platforms and the marketers and brand managers that are exploiting the platforms to the fullest potential.  
• Expert analysis: The report authors have decades of experience in researching and analyzing all aspects of the digital world, from advertising, marketing and social media to technology, apps and demographics. They know how to separate the noise from the valuable insights and never bog you down in trivia or ignore the obvious.    
• Informed forecasts: The authors don’t just report what’s working today. They conduct scores of interviews with executives, advertisers, media buyers, and marketers to not just confirm the raw data, but also forecast where growth opportunities will be in the years to come.

Typically, these exclusive reports are only available to a select number of eMarketer subscribers. But for the first time, eMarketer is making The eMarketer Social Media Bundle available for purchase, and this is the only way you can get it!

But that's not all! Order today and you'll save more than 50% off the price you’d pay if each report in the bundle were sold separately. Click here to purchase the bundle.

Join the conversation about this story »

Late last week, Facebook began to roll out the latest feature for its Messenger app, Messenger Day. As previously teased, it lets you take photos, decorate them with various doodles and filters, and then add them to a clump (or “Day”) of shots that you can share with others on your Messenger list. Your Day will then self-destruct after 24 hours.

If that sounds like Snapchat’s Stories feature to you, that’s because that’s mostly what it is. If you haven’t been paying attention lately, this is far from the first time Facebook has copied features from its younger, newly-public rival. As this chart from Statista shows, Messenger Day is just the latest example – Facebook has worked Stories-like and photo-filter features into not just its main app and Messenger, but also WhatsApp and Instagram.

Notably, Facebook is scrambling to box out Snapchat with apps that all have significantly larger user bases. This is meaningful in a few ways: It validates Snap’s camera-centric vision of messaging, in a sense, but it’s also forcing Snap to convince investors it can sidestep its much-better-funded rival (and former suitor) in the long term.

At the same time, if Facebook can’t copy well– and while Instagram Stories seems to be a hit, there are reasons to think Messenger Day isn’t the best direction for what was a fairly pure messaging app – its mimicry may not mean much to the people who actually use its services. 

SEE ALSO: Pandora is still very popular, but it’s feeling the heat

Join the conversation about this story »

NOW WATCH: Tesla will begin selling its Solar Roof this year — here's everything you need to know

In today’s multi-platform world, the smart businesses are tailoring their messages to audiences based on a variety of factors.

Of course, there are the benefits and limitations to each platform to be considered – but even more importantly, the audience and activity on each platform can differ considerably. The demographics of Pinterest vary from those of YouTube or Facebook, and content creators need to think about these fundamental differences in order to maximize user engagement.

BREAKING DOWN THE TOP SOCIAL NETWORKS

The following infographic comes to us from Tracx, and it dives deep into the demographic differences between the top seven social networks.

Courtesy of: Visual Capitalist

We noticed that Snapchat, owned by newly-IPO’d Snap Inc., is not included in the above infographic. While the growth of the $25 billion company has been extremely impressive, by some metrics it is still closing in on some of the smaller social networks (Twitter, Pinterest).

In any case, here’s what you need to know on the fast-growing, millennial-focused network.

THE MISSING SOCIAL NETWORK

According to the most recent S-1 filing, Snapchat currently has 2.5 billion snaps created per day by an audience of 161 million Daily Active Users (DAUs) as of December 2016.

Here’s what growth looks like, on a quarterly level, for DAUs:

Some other interesting Snapchat stats?

• Users who were 25 years old or older opened Snapchat around 12 times a day and spent 20 minutes a day in the app on average.
• Users who were younger than 25 visited Snapchat more than 20 times a day and spent 30 minutes in it on average.
• Millennials account for 7 out of every 10 Snapchatters.
• Between 500,000 and 1 million Snapchat ads are seen per day.
• About 70% of Snapchatters are female.
• 30% of teens rank Snapchat as their most important social network.

Snapchat is already considered an important piece for companies looking to hit the North American millennial market. As a result, investors value the company over 2x more than Twitter, even despite Snapchat’s monetization problems.

The question is: how long can the growth continue – and when it stops, will it be a top three social network in North America overall?

SEE ALSO: 3 things investors should watch as the UK prepares to leave the EU

Join the conversation about this story »

NOW WATCH: Here’s why flights take longer than they did 50 years ago

The numbers around Snapchat's valuation "do not add up," according to an analyst note from Cantor Fitzgerald sent on Wednesday.

"The valuation looks stretched to us both based on the future cash flows of the business and when compared to peers like Facebook and Google at IPO," wrote three analysts from the bank, Youssef Squali, Kip Paulson, and Naved Khan.

The three analysts estimated Snapchat parent Snap's 2017 revenue to determine its enterprise-value-to-revenue multiple, and compared it to larger rivals Facebook, Twitter, Google, and Yelp.

The enterprise-value-to-revenue multiple is one metric for analysts to decide whether stock is over- or underpriced.

According to the analysts: "Snap Inc. trades at 28.6 x EV/revenue using our [full year 2017] estimates ... vs. the average of the peer group (FB, TWTR, GOOGL and YELP) of 5.5 x (and 9.6 x for FB)."

The reading here is that Snap's stock is overpriced. Facebook made $27 billion (£22.1 billion) from advertising in 2016, according to its financials. Google's parent company, Alphabet, reported $90 billion (£73.7 billion) in revenue over the same period. Meanwhile, the analysts predicted that Snap would make $1 billion (£819 million) in revenue next year, describing this as "aggressive."

This is how fast Snap's revenue might grow

The bank gave Snap the equivalent of a "sell" rating, citing its inflated valuation, an unproven advertising model, an "untested" management team, slowing growth, and the threat from Instagram and Facebook Messenger.

The analysts said the "jury is still out" on whether Snap would be the next Facebook or Twitter.

"[It] is yet unclear if user/[daily active user] growth will plot the course of a Facebook or tap out sooner with a more niche audience, like Twitter. Monetization growth can only take a company so far (as we've seen with Twitter), after which the size of the audience and increased user engagement become much more important revenue drivers longer term."

Snapchat's user growth slowed by more than 5% in the first half of 2016, the analysts said.

They blamed the slowdown on "competitive pressures" from Instagram, which launched the Snapchat-like Instagram Stories feature in that time. Facebook has more recently replicated the feature again on Messenger with Messenger Day. If the slowdown continues, the analysts wrote, Snapchat will look more like Twitter.

Finally, there's the fact that almost 1 billion shares will flood the market next summer, likely denting Snap's share price. The analysts said around 957 million shares would come onto the market after the expiration of Snap's lock-up period next July 29. Facebook's share price fell 4% the day after its lock-up period expired.

Join the conversation about this story »

NOW WATCH: Apple just released this beautiful drone video of its new 'spaceship' campus

Facebook and Snapchat are in an all-out war over the "story" format, but for publishers it doesn't make sense to choose sides.

Tastemade is one of Snapchat's biggest publishers, and it was an early partner in the Discover section of the app. The Facebook-owned Instagram is actually its fastest-growing platform, however, cofounder Steven Kydd told Business Insider. It now has 4.1 million followers there and averages 1 million to 1.5 million views for its stories.

"In TV, you shoot once and give everyone the same" video, Kydd said. "We shoot once" in 4K, he continued, "and edit into multiple formats, then take all the data back" from the platform after it's published. The system is designed to be flexible to various platforms, and for good reason.

"People miss the rapid pace of change of the product side" of platforms like Facebook and Snapchat, Kydd said. Publishers must be able to adapt to the quirks of a company whose goals are not fully aligned with their own. And it is also unclear at any given time which platform will leapfrog the competition in its ability to deliver eyeballs or rise in the esteem of advertisers.

Back when Tastemade was founded in 2012 as a mobile video producer focused on food and travel, the online video landscape was a one-horse town: YouTube. That changed dramatically as Facebook and Snapchat became power players, and it will most likely continue to change as they battle over ad revenue — especially if TV ad money arrives on mobile.

In fact, a study by RBC Capital Markets and Ad Age published Wednesday found that marketers were seeing worse return on investment for Snapchat versus Google and Facebook, and one factor cited was increasing competition from Instagram.

Discover moment

But even though Tastemade isn't betting the farm on just Snapchat, Kydd did describe getting on Snapchat Discover as a seminal moment for the company. That's because it led Tastemade to create a daily edition, which now regularly gets over a million views.

"Discover is like cable but mobile and for millennials," Kydd said. That thinking echoes Snapchat's pitch to TV advertisers, though some, including me, have questioned the quality of programming on Discover.

But there's a big difference between Snapchat and cable that Kydd pointed to: Snapchat is instantly global. The various versions of Snapchat Discover have helped fuel Tastemade's global expansion to Santa Monica, California; London; Sao Paulo; Tokyo; Buenos Aires, Argentina; and so on. Tastemade's sales team has grown by 10 times in the past 18 months, according to Kydd.

As to when the TV advertising dollars will actually shift to mobile video — a move tech companies have promised investors for years — Kydd said it would catch the world by surprise. He thinks it will mimic the flow of consumption of mobile video.

"It took longer" to get going, he said, "then happened way faster." Now he's waiting for a similar dynamic to play out with the money.

SEE ALSO: Estimates for Snap's ad revenue have been cut, and shares just hit a post-debut low

Join the conversation about this story »

NOW WATCH: Winter Storm Stella could turn into a ‘weather bomb’ — here’s what that means

Snapchat is significantly underperforming for digital marketers compared to its tech rivals, according to a note from analysts at investment bank RBC Capital markets, reported by AdAge.

RBC surveyed 1,600 marketers and found Snapchat underperformed in return on investment (ROI) compared to Twitter, Facebook, LinkedIn, Google, Yahoo, and YouTube.

Snapchat's score of 3.43 out of 8 points beat only AOL in the study, which scored 2.88.

Facebook, with a score of 6.72, and Google, 6.98, lead the group.

Marketers surveyed said they were more interested in advertising on Instagram, Amazon, and Spotify than on Snapchat.

According to the report, marketers explained growing competition from Instagram, poor targeting, difficulties in measuring key performance indicators, and a decrease in user engagement and open rates all contribute to hurting their ROI on Snapchat.

A new report from eMarketer, published earlier this week, saw its analysts cut their estimates Snapchat's ad revenue in 2017 from $800 million to $770 million, citing "higher-than-estimated" revenue sharing with publishing partners in Snapchat's Discover section.

This March, Facebook launched Messenger Day, a Snapchat stories clone for the social network's messaging app. Facebook-owned Instagram launched a similar feature in August 2016 and announced in January it would be putting ads in between the series of photos and videos and said the feature is used by 150 million users each day. Snapchat has 158 million daily active users.

In its S-1 filing, Snap said risk factors for the company included competition from Facebook, Instagram, WhatsApp, and Google, as well as "falling user retention, growth, or engagement."

SEE ALSO: Snapchat says 42 million people are watching its NFL content

Join the conversation about this story »

NOW WATCH: Here’s why flights take longer than they did 50 years ago

• Historically, Zuckerberg has responded aggressively to competition.
• It looks like Facebook is now at war against Snapchat — "Carthage must be destroyed!"
• Facebook needs to peel off very few users to severely dent Snapchat's growth.
• That's why it doesn't matter if Facebook's copycat features aren't as good.

Imagine two speeding cars racing each other down the road. One car is being driven by Mark Zuckerberg, the other by Evan Spiegel. Suddenly, Zuck throws out a box of tacks onto the road behind him, and they puncture the tires on Spiegel's car.

It's obvious what Zuckerberg is trying to do — slow down Spiegel's vehicle.

Now imagine that the only spectators along the roadside are tech bloggers. They'd likely look closely at the tacks, to see how well they are designed, and conclude, "Hmm these are low-quality nails. Not very sharp. And they look ugly. It's embarrassing that Zuck believes these bargain-basement tacks are worthy of the job!"

But Zuck doesn't care about their quality. He doesn't need those nails to build a new house. He only cares that Evan's car now has a flat tire.

That, pretty much, is what has just happened between Facebook and Snapchat.

After Snapchat filed for its IPO on February 2, Facebook introduced copycat features into Messenger (Messenger Day) and WhatsApp (Status) that replicate Snapchat's Stories function. Facebook has previously copied Stories for Instagram:

The reviews have been unkind.

My colleague Alex Heath called Facebook's copycats a "confusing mess" and made this status update to demonstrate his point (image below).

But ... the gracefulness of Facebook's new Snapchat-like functions are not the point.

The metrics are the point.

• Snapchat has 158 million daily average users. 
• Facebook, by contrast, has 1.2 billion DAUs.
• Instagram has 400 million DAUs.
• WhatsApp has about 840 million daily users. 

Zuckerberg only needs a tiny percentage of all those users to be on his copycat functions and he will have severely damaged Snapchat. Its user-growth is already slowing. But otherwise the product looks healthy and exciting — so Snapchat remains a threat to Facebook. They compete for ad dollars.

Consider how Zuckerberg responds to threats.

In 2011, on the day Google launched Google+, a direct competitor to Facebook, Zuckerberg switched on the red neon "Lockdown" sign at the Menlo Park HQ campus and held an all-hands meeting. He told them, "Carthage must be destroyed!"— a reference to a Roman senator's call for war, which Zuckerberg remembered from a class he took at Harvard. 

Zuckerberg's people worked seven days a week to fight off the threat. Posters went up around Menlo Park that said, "CARTHAGO DELENDA EST"— the war cry in Latin.

A former Google exec who worked at Facebook at the time, Paul Adams, was told his non-compete agreement was now over and interrogated by his new colleagues for everything he knew, according to Antonio Garcia Martinez, who worked at Facebook at the time. 

"Facebook was not fucking around. This was total war," Garcia Martinez later wrote of the experience. 

Google+ was eventually defeated.

So now Facebook's desire to provide multiple alternatives to Snapchat across all its properties makes more sense: Carthage must be destroyed! 

10% of Snapchat's user-base (16 million DAUs) is equivalent to just half a percent of Facebook's combined DAUs (3.3 billion if you include duplicates) on its three major apps.

Zuck only needs half a percent of his users to prefer his copycat tool and he will have deprived Spiegel of 10% of his potential future users. That's a serious dent.

So while you might think that copycat functions like Messenger Day and WhatsApp Status are tacky, that is not the point.

The real point is that they're tacks.

Join the conversation about this story »

NOW WATCH: Tesla will begin selling its Solar Roof this year — here's everything you need to know

One of the most intense rivalries in tech right now is Facebook versus Snapchat.

The two companies are in the midst of heated battle for social network supremacy that's caused Facebook to attempt multiple clones of Snapchat's core features, most notably with Instagram Stories.

Employees from Snap have remained mostly quietly about Facebook's aggressive behavior in recent months. But Snap's vice president of product, Tom Conrad, broke that silence on Thursday with a snarky tweet to Instagram product chief Kevin Weil.

The tweet from Conrad, which he quickly deleted, was in response to a picture Weil posted of his (very cute!) kids Thursday morning that also asked for a caption contest.

Conrad, who follows Weil on Twitter, decided to make the obvious joke that Instagram's Stories feature looks almost identical to Snapchat Stories:

While it's hard to argue that the caption doesn't fit the photo, it did stir up reactions from other people in the tech community who saw Conrad's tweet before it was deleted, like VC investors Chris Sacca and Josh Elman:

Conrad's feelings about Facebook's copying efforts are also evidenced by the tweets he's liked on Twitter, including this recent one about the Snapchat clone that recently debuted in the Messenger app:

Snap CEO Evan Spiegel has yet to publicly speak on Facebook's copying of his app, but his celebrity fiancée Miranda Kerr recently said she was "appalled" by Facebook's actions and asked, "How do they sleep at night?"

SEE ALSO: If you think Facebook's attempts to copy Snapchat are clumsy, you don't understand what's going on

Join the conversation about this story »

NOW WATCH: Everything about Snapchat’s Spectacles — one of the hottest gadgets of the year

In a great recent essay, The New York Times' Farhad Manjoo made a strong case that Snap, the company behind the social phenom Snapchat, represents a big bet that the camera is the new way to communicate.

As of late 2016, even Facebook CEO Mark Zuckerberg had to concede that "the camera is the composer" in response to Snap's ever-rising star, even as it builds Snapchat-like functionality into the news feed, Instagram, and its other products.

I think that Manjoo is exactly right. But from where I'm standing, Snap's bet is much bigger, and could presage another way in which computing is undergoing a massive shift.

Whenever you take a Snapchat selfie with the infamous puppy or rainbow puke filters, there's a surprising amount of math going on behind the scenes, as artificial intelligence algorithms track your face through three-dimensional space, overlaying an image that moves with you. It ain't easy, is the point.

In industry terms, the technology at work here is called either "computer vision" or "machine vision," depending on the engineers you hang out with. And while Snap was the first social startup to build its fortunes on computer vision, it's starting to catch on elsewhere.

Now, while Facebook is in a position of power as the incumbent, there are larger trends at play. The longer Facebook continues to ape Snapchat's best product features, the less likely that it'll be able to differentiate itself if and when Snapchat has its next big breakthrough in how we use our cameras to communicate and interact with the world around us.

Google, Pinterest, Salesforce, and more

Just a few weeks ago, Pinterest announced Pinterest Lens, an app that can use your phone's camera to tell you where, for instance, they got those awesome sneakers, or point out similar products that match the item's overall design aesthetic. Recently, Salesforce announced "Einstein Vision," a way for businesses, to recognize when, say, a fridge needs to be restocked by "seeing" that a Coke was taken out. 

Probably coolest of all, though, was Google's demo of its new Video Intelligence API, a new system that can "look" inside videos and search what's in them, the same way its popular Google Photos can search for specific people or events. Take a look:

What we're really seeing, looking at all these advancements at once, is the birth of the camera as a viable computer interface. This isn't a new idea: Microsoft's doomed Kinect, for example, was a huge step forward in interacting with technology via camera.

Now, though, a few things are happening. With smartphones and webcams, high-quality cameras have rarely been so plentiful. And thanks to advances in artificial intelligence, and a big assist from the cloud (Snapchat is hosted with Google Cloud, for instance), those cameras can get a lot smarter via software without needing extra hardware.

So what does this mean for Snapchat?

Make no mistake, Facebook is one of the companies on the very bleeding edge of artificial intelligence, which includes advances in computer vision. Honestly, it speaks very well of Facebook's AI prowess, and their acquisition strategy, that they were able to match Snapchat's famed filters so quickly in Messenger.

But Facebook is also hedging its bets. While Facebook builds Snapchat-like functionality into its own apps, it still has to support the traditional news feed, Instagram, Messenger, and WhatsApp experiences. The camera is a big part of Facebook's self-given mission to connect the world, but not the only part.

Meanwhile, if the camera is indeed the new interface, Snapchat is all in. Snap describes itself as a "camera company. Make no mistake, there is no Snapchat without the camera. And the future of the camera lies in computer vision and any new techniques. 

In a job posting for a computer vision expert, Snap says "you’ll work on creating new ways to employ computer vision and graphics to give Snapchatters exciting tools that they can use to amuse and delight their friends."

This means that Snap is making a big gamble. If it can continue to stay ahead of the curve on computer vision and deliver those tools, it stands to be the pioneer and the trendsetter into the future of cameras and of computing itself. 

The payoff of this focus, though, is the enhanced likelihood that Snapchat will continue to set the pace in computer vision. And as computer vision begins to truly touch our everyday lives, it'll be Snapchat, not Facebook, that gets the credit for breaking it into the mainstream.

SEE ALSO: If you think Facebook's attempts to copy Snapchat are clumsy, you don't understand what's going on

Join the conversation about this story »

NOW WATCH: WPP CEO Sir Martin Sorrell on Snapchat becoming the 'third force' to Google and Facebook

Another day, another downer on Snap Inc.

In a pessimistic note to investors, Mizuho Securities analysts Neil A. Doshi and San Q. Phan said Snapchat's parent company was more like AOL, Yahoo, and Twitter than Instagram or YouTube.

They wrote: "In our opinion, Snap is neither an Instagram killer nor a YouTube killer. Snap is uniquely different from Twitter, and could be in a position to take brand ad revenue budgets away from Twitter, Yahoo, AOL and other sites."

It isn't exactly flattering to be compared to AOL, Yahoo, or Twitter, all of which make billions in ad revenue but pale in comparison to Facebook and Google. For example, Yahoo made around $5 billion (£4 billion) from advertising in 2016, compared with Facebook's $27 billion (£21.8 billion).

Snapchatters don't like ads

The bank surveyed more than 1,000 Snapchat users to find out how often they use the app and, importantly, how often they click on ads.

The analysts found that 64% said they "hardly ever" click on a Snapchat ad, and only 6% find the ads interesting.

On the plus side, people still really love using Snapchat. Almost 80% use Snapchat more than twice a day, and about a fifth of hardcore users open it more than 15 times a day.

The analysts wrote: "In our view, Snap will need to materially improve its advertising targeting and ad quality to increase ad loads without diminishing the user experience."

They also said Snapchat needed to make its ads more interesting for users.

Snapchat really needs those users

Snapchat is hugely popular at 161 million daily active users, according to its S-1 filing. But that number needs to grow if the company's ever to turn a profit.

Doshi and Phan said they were optimistic, and predicted the company would reach 261 million daily active users by 2021. They also thought the company would start to turn a profit before tax by 2019.

Two major worries in terms of growing those user numbers are "limited appeal" in emerging markets, and competition from WhatsApp, Instagram, and a host other social and messaging apps.

"Because Snapchat is heavy on videos and images, the service may not attract broad appeal in many emerging markets due to the cost of high-end smartphones and data plans, limited wireless or Wi-Fi broadband availability," the analysts wrote.

"At the heart of Snapchat is a messaging app, and the company faces very stiff competition in that segment based on our assessment. In the US, it competes for users and time spent across Google (including YouTube), Facebook (including Instagram, Messenger and WhatsApp), Twitter, AOL and Yahoo. Abroad, the company competes with Tencent (WeChat), Weibo, Line, Kakao Talk, Snow, and others."

An analyst note sent on Wednesday questioned Snap Inc's valuation, saying the numbers didn't add up.

Join the conversation about this story »

NOW WATCH: Tesla will begin selling its Solar Roof this year — here's everything you need to know

The all-star roster of tech veterans that Facebook began assembling one year ago is quietly making progress, steadily expanding the size of its ranks and the hardware prototypes under development.

The group, known as Building 8, currently has four simultaneous projects underway, spanning everything from cameras and augmented reality to science fiction-like brain scanning technology, Business Insider has learned.

And Facebook is already thinking about the coming-out party for its impending family of gadgets, laying the groundwork to drum up interest and sell the products when the time is right. Building 8 has yet to unveil any of its products, but people familiar with the matter said the hardware group is expected to play a key role in Facebook’s developer conference next month, where CEO Mark Zuckerberg gave his 10-year vision for the company last year.

To be part of this next wave, they’ve got to get real and hurry

The move to hardware is an ambitious and risky adventure for Facebook, which reigns as an internet superpower thanks to its nearly 2 billion users. With virtually no experience in the world of hardware, Facebook is taking on deep-pocketed competitors like Apple, Google and upstarts such as Snap, in a cut-throat business defined by thin profit margins and complex logistics. 

And Facebook doesn't appear to be treating Building 8 like a hobby.

An analysis of Building 8’s recent hires and job listings by Business Insider, as well as conversations with people close to the company, shows an ambitious effort to create and sell millions of consumer hardware units, from a supply chain outpost in Hong Kong to a planned retail push and customer call center operation.

Facebook declined to comment for this story. 

Cardiologists and prosthetics

One of the current Building 8 projects involves cameras and augmented reality, according to people familiar with the matter, and recent hires point to the development of a drone. 

Another project involves brain-scanning technology and is lead by a former John Hopkins neuroscientist who helped develop a mind-controlled prosthetic arm. Yet another project could have medical applications, as it’s led by an interventional cardiologist from Stanford with expertise in early-stage medical device development. The group is also planning to jumpstart a fifth unspecified project, and is currently looking for the right person to lead it.

Overseeing everything is Regina Dugan, the former DARPA executive who Facebook CEO Zuckerberg poached from Google’s advanced projects division last April.

Building 8 is structured similarly to Google's Advanced Technology and Projects Group, or ATAP, and is also similar to X, the “moonshot” lab where Google's self-driving cars were born. 

At Building 8, technical project leads are treated like mini-CEOs and given two-year deadlines to prove a concept that will either be shipped and sold or spun out into a different part of Facebook, which also owns Oculus VR, WhatsApp, and Instagram.

"He's going to help us make things fly"

The first such deadline is about a year away, coming up in the summer of 2018. Frank Dellaert, a robotics and computer vision expert, is leading that project. His involvement could suggest that Facebook is looking at making a consumer drone, something which Snapchat maker Snap Inc. has also looked into.

Before he joined Facebook last summer, Dellaert was the chief scientist at Skydio, a small startup that is working on an unreleased drone that can autonomously track a person while navigating through physical space. Dellaert also served as a professor at Georgia Tech and has shown specific interest in quadcopters, according to a person familiar with his work.

Additionally, Skydio’s former head of hardware, Stephen McClure, joined Facebook to be Building 8’s head of hardware in January, according to his LinkedIn profile. A handful of former GoPro employees have also joined Building 8 in recent months, including a founding member of the drone maker’s industrial design team.

In a separate Facebook post announcing his hire, Building 8 chief Regina Dugan hinted at Dellaert’s aerial ambitions. “He’s going to help us make things fly… when he’s not guarding the door,” she wrote.

Workers from other parts of Facebook have also been pulled in to staff Building 8. One engineer who joined last year named Alex Granieri previously worked on Aquila, Facebook’s high-altitude drone designed to beam internet connectivity to the developing world.

In an August 2016 post announcing his decision to join Building 8, Frank Dellaert signaled that his Building 8 project would be over by the summer of 2018, when he planned to return and teach at Georgia Tech.

“I can’t yet discuss the details of what I’ll be working on at Building 8, so stay tuned,” he wrote. “Suffice it to say, I accepted this position because of the potential impact. I'm eager to apply DARPA-style development to building hardware products at Facebook – audacious science and product development in one place? Let’s do it.”

“Disruptive shopping experiences”

While Building 8 is only less than a year old, the group is already ramping up plans to release its products into the wild, with multiple open “go-to-market,” retail, supply chain, and customer experience job positions listed on its website.

An open retail manager position says the job will “have the responsibility of creating disruptive ground up shopping experiences of Facebook consumer hardware,” and another open partnerships lead position says the person will “build an engaging and successful 3 year partnership strategy for Building 8 retail.”

The listings also indicate that Facebook plans to leverage outside partnerships to sell its products. One responsibility for the partnerships lead position is to “identify unique and inspiring collaborations that will drive innovation, impact social good, and inspire consumer loyalty and trust.”

Shipping and selling consumer hardware to millions of people represents a new challenge for Facebook, which to date has only tried smaller-scale retail pushes for its expensive Oculus VR headset.

Facebook’s early efforts with Building 8 are an indication that the company wants to be a serious player in augmented reality, which is considered to be the next frontier of technology, according to Loup Ventures partner Gene Munster.

“They realize to be part of this next wave, they’ve got to get real and hurry,” said Munster, who was previously known for his coverage of Apple as a Piper Jaffray analyst.

Munster, whose firm closely follows augmented and virtual reality companies, foresees Facebook wanting to ship at least 20 million units per year to be considered a successful consumer hardware company. Even then, he predicts that competition from the likes of larger companies like Apple and smaller incumbents like Snap Inc. will be strong.

“It’s a sign that they want to be more impactful and have a seat at the table,” he said of Facebook’s hardware efforts with Building 8. “I think it’s the right thing to do, but I’m hesitant to say it will be a success.”

Still, Building 8 is continuing to make hires from well-known hardware companies. The majority of Building 8’s senior leadership previously worked with Dugan at Google’s advanced technologies division, including the leadership team responsible for the shuttered Project Ara modular smartphone.

Interestingly, Dugan has made a couple of Facebook posts in recent weeks that hint at what she’s focusing on within Building 8.

In a post from February, she cited a statistic that 93% of “face-to-face” time between parents and their children is done by the time kids graduate high school.

“Most people experience this fact like a kick in the gut,” she wrote. “Because it is a profound reminder of the power of connections. And that we can do more to increase our sense of presence beyond the remaining 7%. I’m optimistic that technology can help... it will require new advances. Including hardware advances. That are social first.”

In a March post, Dugan wrote, “Smartphones have the power to connect us to people far away from us. Too often, at the expense of the people sitting right next to us. We shouldn’t have to choose.”

Do you know more about what's going on in Building 8? Contact the author securely (and discreetly) via aheath@businessinsider, Twitter direct message, or "alexeheath" on Telegram.

SEE ALSO: Facebook bought a small startup to help it quickly build hardware

Join the conversation about this story »

NOW WATCH: Airbus just revealed a wild concept car that can be airlifted by a drone

Traders are loading up on short bets against Snapchat. Short interest in the stock has surged to more than 30 million shares, making up about 15.4% of the shares available for trading, according to Data provided by the Wall Street analytics firm S3 Partners.

Snapchat priced its initial public offering at $17 a share and made its Wall Street debut at $24. Shares climbed as high as $28.84 on March 3, its second day of trading, but have been retreating ever since.

The price has tumbled by nearly a third as analysts across Wall Street have come out against the stock. At least five Wall Street analysts have the stock rated as "Sell," with another two calling it a "Hold."

Anthony DiClemente of Nomura Instinet wrote that four reasons were limiting Snapchat's upside:

1. "Already slowing growth in daily active users (DAUs)."
2. "Slowing monetization (ARPU) growth."
3. "Fierce competition from larger rivals such as Facebook, Instagram, and WhatsApp."
4. "Rich valuation relative to current and future growth."

Others are pointing to the fact that common shareholders don't have voting rights as a reason to be downbeat on the stock.

Brian Wieser, an analyst at Pivotal Research Group, might be the most bearish analyst on Wall Street when it comes to Snapchat. Back when the stock debuted, he assigned a $10 target, saying the stock was "significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity."

SEE ALSO: GoPro finally realizes that smartphones can do exactly what its cameras can

Join the conversation about this story »

NOW WATCH: 7 mega-billionaires who made a fortune last year

Several Wall Street analysts advised investors to either hold or sell shares of Snap Inc. after the company went public on March 3.

But on Monday, James Cakmak, an analyst at the boutique equity-research firm Monness, gave Snapchat's parent its first "buy" rating.

"We recognize we are potentially giving too much credit for unproven skills in building a business, rather than just a product, but we see more to Snap than many suggest," Cakmak wrote in a note on Monday.

"There is substantial execution risk, but we're prepared to give the benefit of the doubt at this stage knowing what we know about Snap, and knowing what we know about the efforts of competitors."

Snap raised $3.4 billion in the tech industry's largest initial public offering in two years. Investors had to weigh prospects that the disappearing-messaging app's advertising platform could live up to its high valuation.

Cakmak said Snap, which calls itself a camera company, could possibly replace the camera app, and he added that the digital camera had seen little innovation since its invention in 1975.

Cakmak also said that the margins of the company's competitors had most likely peaked and that he saw the company with the potential to grow its revenue seven times as fast as its competitors. Through its licensing agreements, Snapchat does a better job of meeting publishers' needs than its peers, he added. He said Bitmoji, the set of emoji users can customize, was an underappreciated area of Snapchat's user data.

Cakmak has a price target of $25 on Snap's stock, which gained 2% to nearly $20 in premarket trading on Monday. Shares plunged 11% last week toward the IPO price of $17 as traders loaded up on bets against the company. Short interest in the stock has surged to more than 30 million shares, making up about 15.4% of the shares available for trading, according to data provided by the analytics firm S3 Partners.

Before Monday, Snap had no "buy" ratings, five "hold" ratings, and six "sells" according to Bloomberg.

SEE ALSO: Wall Street is loading up on bets against Snapchat

DON'T MISS Here's how virtually everything you can invest in is performing this year

Join the conversation about this story »

Snap Inc, the parent company of messaging company Snapchat is higher by 3.9% at $20.30 per share after Monness analyst James Cakmak initiated coverage with a "buy" rating, the first for the stock since its March 2 initial public offering. Cakmak has a price target of $25 on Snap's stock. 

Several Wall Street analysts advised investors to either hold or sell shares of Snap Inc. after the company went public on March 3. Before Monday, Snap had no "buy" ratings, five "hold" ratings, and six "sells" according to Bloomberg.

Shares os Snapchat plunged 11% last week, nearing the IPO price of $17, as traders loaded up on bets against the company.

Join the conversation about this story »

NOW WATCH: 7 mega-billionaires who made a fortune last year

Apple's newest app is called Clips, and it's a mix of Snapchat and iMovie.

Like Snapchat or Instagram, Clips lets you share photos or videos up to 30 minutes in length with special filters and effects.

But Clips isn't its own social network like Snapchat or Instagram. Aside from sending photos and videos to your friends via iMessage, you can only save your photos and videos to your camera roll or send them to other apps, like Facebook and Instagram. Unless you're using Clips to post to Facebook or Instagram or Snapchat, there's no Clips newsfeed or network to plug into, aside from your own contacts in iMessage.

Apple says that Clips will be available in the App Store in April. Here's how the app works:

Clips looks similar to Apple's main camera app. You can record short video clips or take photos before adding special effects.

You can choose from a list of filters and add text, emojis, and other annotations to add over your photos and videos.

Apple's "Live Titles" feature will create captions for you based on what is said aloud during a video recording. You can then edit the text before sharing your clip to another social network.

Snap Inc. received its second "Buy" rating on Tuesday, an important vote of confidence after nearly a dozen Wall Street analysts have told investors to either sell or hold the newly-public company's stock.

The endorsement, from New York investment banking firm Drexel Hamilton, propelled Snap's shares up more than 2% on Tuesday, overcoming the widespread selloff that affected the broader market and which dragged down the Dow Jones Industrial Average roughly 238 points. 

Snap's outperformance was especially notable, given that the stock has taken a beating in the several weeks since its IPO. Shares of the maker of the internet social app popped more than 40% on their first day of trading and soon neared the $30 level, but have trended downwards ever since.

Drexel Hamilton initiated its coverage of Snap on Tuesday with a buy rating and price target of $30. 

Drexel Hamilton analyst Brian J. White painted a rosy picture of Snap's businesses in his note to clients, a copy of which was obtained by Business Insider. He also downplayed comparisons to other social networks like Facebook and Twitter.

"Snap is a very unique tech company that should not be pigeonholed in a particular industry, or investors risk missing the forest for the trees," according to White. "Snap views itself as 'a camera company' and we believe this fosters a mindset for innovation to transcend the boundaries of its competitors."

"We view Snap as a platform for the imagination that unlocks the creativity of its users and allows uninhibited expression with friends. Snap is a fun place to spend time which can be monetized."

White cited Snapchat's strength in augmented reality tech, which it currently uses to create interactive ads and overlay goofy effects over photos and videos. He also noted that "Snapchat has a cachet with millennials that will be difficult for other platforms to garner," and that there is "significant opportunity" for the app to catch on with older demographics and people outside of North America and Europe.

Snap makes most of its ad revenue from the US now, and eMarketer predicts that the company will generate $770 million in US ad revenue this year. Snap hasn't given its own revenue estimates for this year, but Goodwater Capital recently predicted that it would make $1.1 billion in total revenue in 2017.

Before Tuesday, Snap had one "buy" rating, five "hold" ratings, and six "sells."

SEE ALSO: Facebook would 'love' to acquire Snap if shares drop to $14, says analyst

Join the conversation about this story »

NOW WATCH: WPP CEO Sir Martin Sorrell on Snapchat becoming the 'third force' to Google and Facebook

Snapchat desperately wants to carve out a piece of the $70 billion in brand spending that currently goes to TV advertising in the US.

To get a piece of the pie, the maker of the popular messaging app is touting its ability to put people in front of their TVs.

Snapchat has stepped up efforts to measure whether users intend to watch a TV show that's been advertised on the app, as well as whether those users actually ended up watching the show.

According to the company, early signs indicate Snapchat users are tuning in.

NBC saw a 122% increase in self-reported viewing of its "Hairspray" TV musical a few months ago because of its campaign on Snapchat, both companies told Business Insider.

Thanks to its partnership with Nielsen, Snapchat showed viewers of NBC's ads an in-app poll that for the first time asked whether they ended up watching the live broadcast of "Hairspray" on TV. Snapchat users who were exposed to NBC's ads (which included a sponsored selfie filter) at least three to five times specifically reported a 155% increase in self-reported viewing.

Two-second exposure

“This is the first time we did anything that was this extensive," NBC senior vice president of media Kjerstin Beatty told BI in reference to the network's Snapchat campaign for "Hairspray." Beatty was particularly impressed with Snapchat's ability to reach people under the age of 35.

“We thought if we had a shot at getting those people to the TV, Snapchat was the best shot at that," she said.

Another lesson that NBC learned from its Snapchat campaign was that video ads don't have to be long to produce results, according to Beatty. NBC saw a 2x increase in self-reported viewing of its "Hairspray" special within only two seconds of exposure to a video ad in Snapchat.

Those results are a positive sign for Snapchat, which has been criticized for not being as good at ad tracking as its social competitors. The company has announced a number of ad measurement partnerships in recent months to boost its credentials, including deals with Nielsen, Millward Brown, and Oracle Data Cloud.

Investors in Snap, which had its IPO earlier this month, are keeping a close eye on the company's ad business. And deep-pocketed TV companies are great advertising customers for Snap, even if there is a certain irony to the whole thing.

In March, NBCUniversal invested $500 million in Snap's IPO.

SEE ALSO: Snapchat has started selling its Spectacles camera glasses online

Join the conversation about this story »

NOW WATCH: WPP CEO Sir Martin Sorrell on Snapchat becoming the 'third force' to Google and Facebook