Why The New Snapchat Update Is Secretly Awesome For Investors
It’s not just about investors either; this update is a big win for everybody.
We’ve all seen the new Snapchat update. We didn’t really have a choice in the matter. I can’t count how many snaps I‘ve seen of people spitting up rainbows and, as cool as that is, I want to take a look at some of the reasons why Snapchat would introduce this sort of feature.
First, and most importantly, it enhances the user experience of being on Snapchat. They might be a little annoying when every single person uses them, but, overall, facial recognition skins are cool and fun to use. A feature that enhances the user experience is a good feature for Snapchat. For them to have the monumental success that they are chasing, the number one thing they have to do is give people a good experience.
Aside from that, these new facial recognition skins are also an incredibly shrewd business move. If I was an investor in Snapchat, I would love this update and here is why:
This feature can be monetized!
“How can facial recognition be monetized?” Well, easy. Two words, sponsored advertisements. Just take a look at what Snapchat did with their original skins. At first they had default skins, and then slowly, they introduced “sponsored filters” that would only be available for a day or two.
This facial recognition feature sure seems like a prime candidate to get the same sponsored treatment. Hell, when I tried the robot one I was certain that it was already sponsored. It had that “Mission Impossible” feel written all over it.
These skins are going to be a really interesting revenue stream for Snapchat.
On the topic of revenue streams, the $1 replay feature is a new revenue stream in plain eyesight. Snapchat probably has data supporting people being interested in more replays, so they rolled out a way to give people what they want. Who knows how big this revenue stream will be, but it seems like simple implementation and if it doesn’t take off, then no biggie. No harm, no foul.
Another easy win for Snapchat.
The last feature from this update that I want to talk about is probably the one that got overlooked the most. Snapchat did a really clever job of rolling out this update at the same time as the facial recognition update, which almost hides the coverage in the media. The sneaky update I am referring to is the new timer graphic (pictured below).
See the difference? The timer on the left doesn’t count seconds for the story. This is a massive deal.
If you use Snapchat daily, then you understand the phenomena of too long; didn’t read (tl;dr), which just means that when something is too long, you exit out of it and avoid it all together.
On Snapchat this happens when somebody opens up a 200 second story. We’ve all done it. Clicked on a story, seen it lasts 236 seconds and said to ourselves “ehhhh, nevermind” and then exited out.
Snapchat’s CEO, Evan Spiegel, is too smart not to know this. You don’t grow an app to 4 billion daily video views without knowing what the hell you are doing.
The new timer graphic is his solution to the tl;dr phenomena. It shows you how long it is, but doesn’t scare you off by saying “200 seconds” at the top of the screen. This is a clever little growth hack to keep people’s attention.
“That is nice and all, but why would Evan Spiegel care if people skip stories that are too long?” Again, easy answer, he cares because Snapchat puts out daily content under the “Live” section. These “Live” stories are either look-ins to see what another part of the world is like, or it is a cool event going on. In both situations, these “Live” stories are always longer than the average story. Storytelling at New York Fashion week can’t really be done in a 15 second story, it sort of needs to be 200 seconds. There is no way of getting around that.
Snapchat is incredibly smart and they know this. I am sure Snapchat tracks their own data and has noticed that a ton of people click to see what’s going on in that story, noticed it was 200 seconds, and backed out.
The real reason Snapchat cares about this is because they runs sponsored ads during those “Live” stories and when users don’t finish the whole story because of the tl;dr phenomena, they lose money because of it. This new timer graphic was a subtle, but brilliant, little way to optimize Snapchat’s sponsored ad platform.
Increased Retention = Increased Success Of Sponsored Ads
Isn’t it crazy how such a tiny update can have such dramatic affects on how user’s experience a platform?
Recap
If I was lucky enough to be an investor in Snapchat I would be over the moon over with this update. Not only did Evan Spiegel find a way to enhance the user experience, but he also built-in new revenue streams, and optimized one of his current revenue streams.
It’s not just the investors who should be excited about this update. Influencers and content creators should look at the facial recognition skins as a great new storytelling tool. I’ve done a fair amount of playing with them (on my own Snap account, @thatarsenaldude) and to me they feel like modern versions of emojis, except with the added benefit of being animated. I have an elderly-face for bored, a crying-face for sad, and a spitting-out-rainbows-face for when I can’t contain my excitement over something.
Thanks for taking the time to read this. I write these stories, because I am incredibly interested in the business side of Snapchat. If you know somebody who is also interested in the business side of social media, you should share this with them :)
This story was originally published on my blog: http://www.thatdudeyouknow.com
