Opinion / The evolution of Snapchat into a media juggernaut
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:
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.