With news today that Snapchat takes up a healthy 75 percent of all chat traffic (besting Facebook and Google) in the U.K., as well as the app's recent announcement to start doing more with music videos, all eyes seem to be on the young start-up as it clears a path for its future. Given the app's popularity among teens and tweens, it's tempting to see Snapchat's maneuvers as a harbinger of the new new way of doing social. While boomers insist that disposable is exactly that -- disposable -- Snapchat thinks it knows what the younger set wants. However, its growth as a company largely depends on its relationships with advertisers, and given the ephemeral nature of the technology, some brands have questions about how to use the app for their benefit.
Where is Snapchat Going?
In an interview with Bloomberg Business, CEO of Snapchat Evan Seigel, 24, who founded the app from his dorm room three years ago, was cagey on the topic of the plans for the future, but there are hints that if Spiegel is able to entice big advertisers, the app may be able to move into big media, with users able to buy content, in partnerships with the likes of Sony and Spotify, that they want to see on their phones. Spiegel insists that the younger set is growing weary with the established social media sites like Facebook and Twitter, which no longer have the addictive intimacy of Snapchat, and have, in effect, "gone to the olds." Plus, Spiegel believes teens only want to be on mobile and no longer tolerate the clunky interfaces of the social media sites of yore.
Last year, Snapchat started running select video ads, starting with a trailer for Ouija, a horror film from Universal Pictures that catered to younger audiences, and later being embraced by brands like Coca Cola and Samsung. Now Spiegel is traveling to agencies in London, Los Angeles, and New York to pitch new deals with bigger advertisers - in person. But is Snapchat going to be an undeniable force in the future of social, or just too big for its britches?
Too Much Effort. One complaint of advertisers is the need to create original content to appear on Snapchat. Due to the app's vertical video structure (when videos appear, they take up the whole screen and do not require the user to rotate their phone to be able to see what's playing), brands must create Snapchat-tailored videos and thus are unable to easily recycle advertisements that appear on other sites. This can be costly.
Too Expensive. Snapchat's advertising rate is somewhat...bold. The starting rate was set at about $100 per 1,000 views, which racks up to $750,000 for a day-long campaign. That's more than major players Hulu and YouTube charge. Yet, in response to this pressure, the company recently announced that it would start charging $20 per 1,000 views, and perhaps new advertisers will bite on a less risky rate.
No data. Due to the ephemeral nature of the videos, the app hasn't yet developed satisfying metrics for advertisers to measure response to the ads. Since the videos disappear, there's no traditional way to comment or share, and the app still needs to build measurement tools that can tell advertisers more about viewers of their ads.
Too young. Spiegel himself is known for being sort of an enfant terrible of the start-up world. He's short with interviewers, and callous about data breaches. And to anyone older than a millennial, his technology is befuddling. Snapchat's interface isn't text-heavy at all and so it relies on native intuition for users to know what the icons mean and how to swipe. For advertisers this signals a tacit agreement to shut out a large part of their audience.
Either way, it seems that Snapchat is making moves behind the scenes, and we should expect interesting news to come from the app in the months to come as they settle on their future identity and either lead the way or burn up doing so.
Image credit | Wikimedia Commons