Does Snapchat's Maturing User Base Mean Anything For Its Top Line?

While the new search feature is an "opt-in" — users have to submit snaps to be searchable — Brown's thesis has validity given Snapchat's younger demographic. But another problem Brown didn't mention is the fact that Snapchat's younger demographic base will eventually grow up and won't require the same level of anonymity from their parents.

If, say, 10 years from now Snap's user base leaves the platform, then the company needs to ensure one of two things to ensure top-line growth: 1) at the very least, replace departing users with new ones and/or 2) make the social media platform more user friendly for the older demographic group.

Already Making Progress

There are already some signs that Snap is indeed gaining traction among the 35 and older crowd. According to Statista, 46 percent of Snapchat's entire user base were people aged 35 and older. This marks a notable increase from 24 percent a year ago.

The 35 and older crowd could be more lucrative for marketers since they tend to have a job and more disposable income compared to someone under 18. On the other hand, Snapchat is far from the only platform that attracts people over the age of 35 and needs to compete against the likes of Facebook Inc FB, Twitter Inc TWTR and even Alphabet Inc GOOG GOOGL's YouTube for a greater share of marketers' budget.

On the other hand, Snap's loyal and young user base makes it a gold mine for advertisers looking to target the group. In this instance, marketers would likely compete against each other for exposure to the platform.

Perhaps none of this really matters for investors. After all, the company itself made it very clear that there is a possibility it may never earn a profit and no amount of marketing dollars can fix that. Snap Shares Are Priced For Flawless Execution Merkle Takes A Look At Ad Spend Across Internet Names __________ Image Credit: By Maurizio Pesce from Milan, Italia - Snapchat, CC BY 2.0, via wikimedia Commons

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