Maybe I’m old (not in Snapchat’s core demographic), maybe I’m slow (didn’t have much use for Twitter originally either), and maybe I just feel excluded because of my unshakeable Windows Phone addiction. But I’ve always been skeptical of Snapchat’s long term prospects, and here’s why:
I won’t try to convince you that your naughty pix aren’t as secure as you think, or that the founder is a terrible human being, or that sending disappearing messages is as gimmicky as collecting Beanie Babies. There’s clearly something there; millions and millions of users can’t be completely wrong. Snapchat has tapped into some need for ephemeral self-expression, some way of escaping the prying eyes of parents that hits a chord with adults too. Personally, I don’t get it — I don’t want to waste my creative efforts, no matter how trivial, on something that’ll disappear. I like that we can relive our memories through social media. And it forces me to ask today’s version of the reputational gut-check question: “how would I feel if this were tomorrow’s New York Times front page?”
But Snapchat’s big problem isn’t that users are going to get bored with it. It’s that the network’s novelty is also its Achilles heel — it has virtually no data to sell.
Snapchat accounts aren’t connected with any other social media profiles and they don’t ask users for any additional info when they sign up. I’m guessing with the $3b Zuckerberg snub that Facebook profile data won’t be coming to Snapchat anytime soon. But not only are advertisers unable to target users based on their profiles, the Snaps themselves are devoid of any searchable data on the contents of the message. So the only thing advertisers can do is blanket the entire Snapchat network with the same message. That’s halfway useful if you’re going after the demographic that Snapchat primarily serves (which, on average, isn’t a particularly valuable one from a purchasing power perspective). But it completely misses out on all the benefits of the digital marketing revolution that allows marketers to target specific users with specific messages based on interest and intent.
Furthermore, they’re going to struggle with integrating Snap Ads into the app in a compelling way. The first ad just showed up as an incoming message, which users were free to ignore. Millions clicked on it anyway, but the success of that approach will be short-lived; when the novelty wears off then Snapchat will need to find a way to make users watch ads in between Snaps. Think about the difference between viewing a Snap and viewing content on Facebook, Twitter, Pinterest, Instagram or even Vine — there’s no newsfeed of Snaps you can scroll through, no natural way to embed marketing messages into your normal media consumption. Snapchat has commercialized the area next to the content you care about, and is hoping you click on it.
Snapchat may have built a compelling user experience, but they’ve failed to build a data-driven economic platform. And that’s what really drives the success of the Amazons, Ubers, Googles and Facebooks of the world.
Over dinner recently, I had one Snapchat fan in his early 20s describe why Snapchat is different, why it was destined for longevity in the way other fads like Farmville and Foursquare were not. “It’s mobile,” he said. “It’s always with you; it’s transformed the way people communicate. I use it a hundred times a day.”
I know the feeling he’s talking about. There was a company that was pretty transformative in the mobile technology space back when I was in my early 20s too. A technology, or at least a brand, that put millions of people in constant contact. Never again would you miss an email. Never again would you be stumped on an archaic piece of trivia. The company had tens of thousands of employees, a $150b market cap, and for a period of time it was synonymous with the smartphone — I’m, of course, talking about BlackBerry. That company is worth $5b today, having lost 97% of its value. Before Snapchat gets too cocky, they should take note that picture messages aren’t the only thing that fast-moving technology can make disappear.