Snapchat is increasingly using the same spammy tactics it used to call competitors out for - and it reveals deeper troubles in its business

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• Snapchat has attacked other platforms for growth hacking, or boosting their usage through tactics like sending push notification alerts to users.
• But it seems to have had a change of heart.
• Snapchat has been increasingly sending push notification alerts as well as in-app alerts to users, according to a new note by BTIG analyst Rich Greenfield.
• This signals just how dire things are for the company, and is a sign that "engagement is falling," Greenfield wrote.

Snapchat has been employing tactics it used to scoff at competitors for, and it's bad news for investors.

The ephemeral messaging app has been staunchly against "growth hacking" in the past, with founder and CEO Evan Spiegel even calling out competitors for boosting their user trends through tactics like sending push notification alerts.

But as the company sees user trends tumble, with daily average users and time spent on the decline, it seems to have no option but to warm up to growth hacking.

Snapchat has been increasingly sending push notification alerts, as well as in-app alerts to users, according to a new note by BTIG analyst Rich Greenfield. These include push alerts urging users to open the app and watch their own memories, and stories posted by their friends, as well as in-app alerts that inform users that their friends have recently posted stories.

"Given Spiegel's distaste for growth hacking (and his answering questions on the topic), we have to view the dramatic increase we have observed in Snapchat's growth hacking as a sign that usage/engagement is falling," Greenfield wrote.

This is a far cry from just over a year ago, when Spiegel said that Snapchat's daily active users (DAUs) were low because it refrained from growth hacking.

"There's a lot of this thing in our industry called 'growth hacking' where you send a lot of push notifications to users or you try to get them to do things that might be unnatural, or something like that," Spiegel said at the time. "The way we talk about DAU growth at our company is as it pertains to creativity."

The fact that Snapchat seems to have altered its stance so considerably signals just how dire things are for the company. Snap has been struggling to grow its user base as it faces increasing competition from Instagram Stories, has been reeling from a failed redesign attempt, and just this week lost its strategy chief Imran Khan.

"To me this tells you that they are willing to do anything possible to bring you back into the app," Greenfield told Business Insider. "It's a cycle, as there seem to be less people creating stories, and hence there less viewership, less time spent in the app, and therefore less opportunities for monetization."

Snap shares have been under pressure since last month, when the company reported quarterly results that beat on the top and bottom lines but acknowledged that its number of daily active users fell 2% to 188 million, missing the Wall Street estimate of 193 million.

That, among other factors, led Greenfield to issue a "sell" rating on Snap and drop his price target to $5.

"We are tired of Snapchat's excuses for missing numbers and are no longer willing to give management 'time' to figure out monetization," he wrote. "With engagement falling and consensus expectations too high, we believe a sell rating is warranted at these levels."

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