We get asked this question a lot, and we're actually quite different! In fact, we're so different that we don't consider them a competitor at all.
Bitly simply shortens the URL and they spawned out of the need for more characters when Twitter introduced the 140 character standard.
Sniply, on the other hand, is designed to drive traffic back to your own website regardless of where you send your visitors. Our entire focus is on converting social media sharing into traffic for your website, allowing you to drive conversion through content curation.
Here's an example...
With Bitly: You share a WSJ article and shorten the link with Bitly. When someone clicks on the link, they are redirected to the original URL. Their analytics tell you that you generated 500 clicks to the NYTimes article.
With Sniply: You share a WSJ article and shorten the link with Sniply. You embed a link back to your own website into the article itself. Our analytics tell you that you generated 500 clicks on the WSJ article, but also an additional 50 click-throughs to your own website.
The big difference is that Sniply drives traffic back to your site.