All in on augmented reality

This year for Snap: Flying selfie drones are out, and everything augmented is still very in. 

Driving the news: In the midst of a pretty rough year for social media companies, Snap is trying to pave its way forward through heavy investment in artificial intelligence, augmented reality, and its creators, the company announced at its annual developer conference. 

  • A GPT-like chatbot: All users will now have access to an OpenAI-backed chatbot, three months after it was made available to Snap’s three million paid subscribers.

  • Augmented reality mirrors. First launching in Nike stores in the US, AR mirrors will let customers skip the dressing room line by checking out clothes virtually instead. 

  • Investing in creators: Top-tier creators will earn a share of the ad revenue their viral content generates, as they do on YouTube, TikTok, and (kind of) Reels.

Catch-up: For Snap, the last three quarters have been rocky. In August, the company laid off 20% of its staff, cut projects not related to revenue, users, or AR technology, and projected its first quarterly revenue decline. Its share price has fallen ~67% in the last year. 

  • Meta has fallen a long way since its 2021 performance peak, too. Even Gen Z-friendly BeReal can’t seem to get most of its users on the platform every day. 

Why it matters: Social media giants face tensions between keeping users and the people keeping the lights on (advertisers) happy. There’s no going back to beloved chronological feeds, but a renewed focus on user features will be the only way to keep valuable eyeballs. 

  • Snapchat has 750 million monthly active users, compared with at least 1 billion on TikTok (which is likely higher), 2 billion on Instagram, and 2.96 billion on Facebook. 

Big picture: The industry continues to battle a slowdown in ad revenue stemming from a rocky economy, competition from TikTok, and changes in Apple’s privacy policies that make it difficult to personalize and track ads on iPhones. Time will tell whose bets will pay off.—SB