Ghost to Juggernaut: Snapchat’s Evolution
Contagious Insider’s Chris Barth goes all-in on the disappearing app
I was wrong about Snapchat. Well, I was at least somewhat wrong; I still posit that anyone is a fool for walking away from a pot of $3bn divided among a small group of people. But it turns out that at least from a business valuation perspective, Evan Spiegel and his team at Snapchat were right to turn down acquisition overtures from Facebook and other tech giants in 2013. (Sidenote: was that really all the way back in 2013?!)
At last look, or more specifically last fundraising round, Snapchat was valued at more than five times the sum offered by the big Like button in the sky, at somewhere between $15bn and $20bn, depending on whose numbers you trust (answer: nobody’s!). Things are going well for the ghost, which seems to have shaken off its teen sexting reputation, at least among sentient individuals under the age of 60. In fact, a study conducted in 2014 by researchers at the University of Washington and Seattle Pacific University found that only 1.6% of users sent sexts via Snapchat, compared to 59.8% who sent ‘stupid faces’. Yes, that’s an actual quote from the study.
Snapchat, to my mind, has succeeded by building on top of four distinct evolutions:
The evolution of attention. Ubiquitous mobile phones have led us to develop insect-like attention spans. Simultaneously, Snapchat’s finger-on-the-screen mechanic forced users to dedicate full attention to their smartphone screen for up to ten seconds. Although that mechanic has gone the way of the Dodo in recent updates, the app still finds ways to grab and hold attention through one-time-only views and countdown timers.
The evolution of content. That same evaporation of attention spans has created mobile phone users who are allergic to boredom. This has provided an opportunity for small, throwaway pieces of content to assume more importance. Similarly, content creators are beginning to recognize the value of quick-to-consume, light-hearted content that tells a full story in just a few seconds (see: Twitter, Vine, Beme, Snapchat).
The evolution of messengers. We’ve chronicled the rise of messaging apps for quite some time here at Contagious, noting their precious place on the homescreen (and notification screen) of mobile phones. Their penetration is high, their atrophy rates are low, and they occupy an increasing amount of smartphone hours.
The evolution of publishing. As messengers have grown in importance, and as consumers have shown reticence to leave the ecosystem in which they’re playing, publishers have begun to adopt new strategies. Perhaps most importantly, they’re embracing distributed publishing on platforms like Facebook, Tumblr and Snapchat, placing less value on whether people click through to the site, and more value on simple content views. Key to the future of this type of publishing is partnership, with platforms benefiting from having publishers create native content and publishers benefiting from ad revenues even in an ‘away game’.
Let’s focus on that last point. Gawker managed to get its hands on some of Snapchat’s internal financial documents, and breathlessly reported that the app lost a whopping $125m in 2014, which, okay, sure, it’s a startup focused on user acquisition or whatever VC phrase you want to toss out there. But more importantly, those numbers came out before Snapchat launched Discover, its forward-thinking media property, embedded within the app right next door to its picture-sending function. Discover, as you will soon, erm, find out, is a game changer.
Buzzfeed, the ever-expanding, ever-changing focal point of so many minds in media, reported last week that a full 21% of views of Buzzfeed content occurred within Snapchat’s Discover feature. The only larger sources of eyeballs? Facebook native video, which clocked in at 27% of views, and direct visits to Buzzfeed’s own app and website, which combined (combined!) to account for 23% of views. Facebook traffic to the site and native images accounted for another 10%, YouTube views for 14%, Google search for 2%, and the ubiquitous ‘other distributed platforms’ for 3%. Kudos to you, Twitter users, for not clicking those Buzzfeed links.Though it’s not a ‘traffic’ powerhouse in the traditional sense — Snapchat isn’t sending clickthroughs out of the app and into Buzzfeed-owned properties — it is a redefined media centerpiece for modern, distributed publishers.
Although it’s tough to pin down actual numbers and details about its structure, Snapchat’s revenue model would seem to dovetail quite nicely with this new publishing strategy. Publisher channels on Snapchat Discover are a mix of short, punchy videos, easily shareable images, and — you guessed it — advertisements. A report by AdAge in August found that the Discover platform was running an average of one ad per 44 stories, representing 18 brands. Although that number may seem low, the platform also reportedly charges insanely high rates for Discover placement; early reports said Snapchat was asking for $750,000 per day from advertisers. As one agency exec told AdWeek, ‘From a monetization perspective, they are looking for fewer, bigger, better.’ Anecdotally, the ads have seemingly ramped up as advertisers warm to the platform and begin to ramp up marketing heading into the holiday season.
This model isn’t just working for Buzzfeed, although the publication is without a doubt one of the platform’s most prolific posters — and natural fits. I spoke with a Viacom employee who told me that over the course of a few months, Snapchat has gone from the domain of Comedy Central’s interns to a core part of the humor channel’s social strategy. Even slightly more dyed-in-the-wool orgs like National Geographic have extolled the platform’s merits.
Last night, Burberry premiered its new collection at London Fashion Week — and on Snapchat. The runway show was captured and shared in Snapchat’s Live Stories feature, a cousin to Discover for brands and events that might not produce content on a regular basis. It was yet another technology-forward moment for a forward-thinking brand, and an acknowledgment that Snapchat is being embraced by big brands. The platform seems to be ready for the big time, and if it can keep innovating intelligently, it should continue to prove me wrong in the months to come.
Originally published at www.contagious.com. Next Practice is Contagious’ home for thinking on the future of creativity in marketing. It features original essays from the advertising industry and beyond, and the editors and strategists of Contagious. Read more about Next Practice and how to submit your own op-ed here.
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