Snapchat says it has 150 million daily active users, with the majority in the 18- to 24-year-old range. Its private nature lets users send videos to each other without sharing them publicly, which some believe will keep kids happy. But as mom and dad get interested in finding out more about the platform, there are concerns it could lose its cool factor.
"Becoming an advertising powerhouse may boil down to how well they manage relevance to their younger user base, with appeal to advertisers based on scale," said Todd Alchin, chief creative strategist at creative media agency Noble People.
In addition, as Snapchat attracts more advertisers, it will have to walk a delicate balance between keeping users happy while including more ads — a question Facebook is finding itself have to answer from investors.
"There is a natural evolution with every platform where they go from purely a hot cultural phenomenon and transform into a real functioning business," said Mike Dossett, manager of digital strategy at agency RPA. "They need to balance maintaining some of the magic of the platform."
Then, there's the challenge of expanding the audience to include older millennials and up. To do so, they'll have to draw users from other social media platforms. It's a hard task, especially with many older users of social media using Facebook as their portal to both world news and their friends, said Mike Lobikis, head of sales for integrated production company Tool of North America.
"Facebook has done a better job in investing in people's attention," Lobikis said. "It's the place where people spend their most time."