⚠️ BeReal ⚠️: New Data and a Final Prediction
With 10M DAU and plans for 100M, will BeReal's attempt at monetization be its demise?
Over the past few months, we covered BeReal in 2 sequential pieces as we began to answer the question: will BeReal stay relevant with Gen Z, or be sent to the social media graveyard?
Today will be our final piece (for now) with a final prediction based on the data we have been collecting week over week since July.
What the data says about BeReal’s future
We have been tracking the popularity and consistency of user-generated content around the app since early July - what we believe to be the two most significant predictors of the app’s ability to continue attracting young consumers (what we call “Brand Magnetism”). Let’s take a look at a few different collections of data:
Google Trends data
TikTok Hashtag Views
GenZ Score® and Brand Magnetism data
Quick plug - we recently launched our 2022 Q3 Gen Z QSR Rankings Report, with 36 QSR brands analyzed and ranked on the graph above. Check it out here!
All of the data continues to indicate that BeReal shows no signs of slowing down. On their careers page, BeReal says that they have gone “from 10K daily active users in March 2021 to 10M+ now".
As the app continues to grow at impressive rates, the key question becomes:
#3: Will the platform be able to adapt and evolve with culture?
Short answer: If and only if they can figure out how to make money.
Monetization:
Monetizing the product is first reliant on a product that actually works. One of the most frequently noted complaints about BeReal is that it legitimately does not work. Seriously - almost never can users actually upload their photos on time. So it seems pretty powerful that people continue to use it in such high numbers despite this major issue.
BeReal is currently hiring on the engineering front, with 7 of their 10 open roles focused on development, including a VP of Engineering vacancy. Hopefully, this means they’re going to fix the app. They are also hiring for a Head of Product role. According to their careers page, they are:
“Building the technical infrastructure and product that will empower BeReal to scale to 100M+ users”
If BeReal can build the technical infrastructure to handle the scale, the question that follows that everyone seems to be asking is “how will they make money?”.
One of the common responses is that all socials start free - Instagram, Snap, etc, all started as free, and eventually monetized the platform. True.
BUT.
Those platforms were built to keep you on for as long as possible. They were built with advertising in mind as the future monetization strategy.
BeReal stands for the antithesis of traditional social media. The founders have made it very clear they have no interest in building the toxic platforms that Instagram and Snapchat have become. It’s about being real.
Advertising on social media is built around the simple goal: to keep users engaged for longer, so we can target them with more ads.
This is just not how BeReal works. The app is designed to be picked up, scrolled through for a bit, and put down. Just once a day. While we certainly will have more info on this in our upcoming Gen Z Screen Time report (EOY 2022), we expect numbers to average around 1.3-1.5 pickups per day for an average time spent of ~5 min per day. Compared to Instagram, Snap, or YouTube, those numbers don’t stand a chance to bring in the kind of advertising revenue necessary to build the next big social.
If not traditional social media advertising, then what?
A new fundraise may give us some insight
News recently leaked that BeReal was set to close a new funding round that will quadruple its valuation to over $600 million. This may be a sign that BeReal is a bit farther from monetization than we may think, buying a year or two of runway alongside a sizable talent and user scaleup.
If BeReal chooses not to monetize immediately, it will need to innovate, and innovate quickly. As those at Instagram, TikTok and Snap are surely aware, young audiences grow bored. Quickly.
What we know about Gen Z is that the push-and-pull relationship between this audience and culture is very direct. As culture changes (through things such as technological innovations or new platforms…BeReal), so does Gen Z, which in turn impacts culture yet again, in a back-and-forth cycle that only seems to grow in speed and strength.
Prediction:
Over the next 6-12 months, BeReal will begin an aggressive product roadmap, testing and learning aggressively to find the product iterations that will reveal how, or better yet who, it will monetize.
It would be reasonable to assume that one of these future product directions is video. Video would add a fairly engaging element to the interface and experience of the app, increasing time spent per pickup, and likely even pickups per time.
But to cross the bridge into social entertainment (ie TikTok, IG Reels, YouTube, etc) wherein lies a significant opportunity to increase time spent on the app, BeReal faces a legitimate challenge. To do this, users on BeReal would need to have a strong reason why they would want to see the BeReal’s of random people across the world outside of their close friend circle. Right now, BeReal has a Discover feature, where users can scroll through BeReal’s of random people across the globe that have chosen to post to Discover. The (be)real question is, how often does that feature get used, and for how long are users scrolling on Discover?
Would it get used more if a ton of influencers were on there? Sure, it would be awesome to see the BeReal of your favorite influencers. And maybe this is the direction they take.
But BeReal from the beginning has shared its feelings about “fame” on the platform. Its founders have said:
“BeReal won’t make you famous. If you want to become an influencer, you can stay on TikTok and Instagram.”
If BeReal won’t make you famous, then what role could it have for famous people?
Could it become a community-building platform for influencers to authentically and genuinely engage their audiences? Perhaps in the future influencers without a BeReal won’t be seen as fully authentic. It would become not just a Proof of Attendance, but a Proof of Authenticity.
If it plays no role for influencers and it won’t make you an influencer, then it seems unlikely that it will extend beyond the close friends/friends circle. And in this sense, it will face very similar challenges to Snap.
Snap has struggled to see leaps in advertising revenue in traditional forms. From an NYT article, “Privacy changes from Apple have affected its advertising business, and rising inflation and economic uncertainty have made advertisers skittish.”
Snap announced as part of their layoffs that they were cutting distractions and focusing on their core belief for the future. No more original content, no more games, less hardware.
From their August Investor Relations report, Snap outlines the below:
Whereas 98% of Meta’s global revenue is driven by ads, Snap is forced to identify new sources of revenue. They recently launched Snapchat+, a monthly subscription for users that gives access to new product features and have plans to further monetize Snap Maps and Spotlight as well.
The AR future of Snap is well positioned for high monetization potential as young consumers demand more interactivity and utility from advertisements.
Final thoughts:
The data shows us BeReal is here to stay. Such consistent growth over time is hard to ignore, and the attraction Gen Z’ers have to the product is clear as it continues to grow in magnetism with Gen Z.
BeReal will reach a point with their product where they have to answer the critical question that all socials are struggling with right now - what really are they? Are they a social platform, are they an entertainment company, are they a camera company or are they something entirely different?
As the team at BeReal launches new features, we will be keeping a close eye out for how they affect their future monetization strategy. That monetization strategy will determine their direction, and that direction will tell us their future.
If they resort to buying young audience attention and eyeballs, they will die - not only for lack of clarity of vision but because TikTok, YouTube and Meta will likely eat them alive.
But if they end up monetizing the product in a way that stays true to their original vision, we believe they will be a positive, welcome and dominant force for years to come in the social media space.
For now, stay real friends.
Thanks for the BeReal insight. Here's a question I'm trying to figure out: does GenZ use email? is GenZ on Substack?