Narrative: Snapchat is Maturing
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Snapchat adds goal-based bidding for app install ads to rival Facebook – Business Insider (Apr 6, 2017)
App-install ads can be a pretty lucrative source of revenue for online advertising platforms, because at least some ads pay out at a high rate for a successful ad-driven installation. Given Snapchat’s lock on a particular demographic, app-install ads could provide useful new revenue and boost its relatively low ARPU. There was a time when app-install ads were thought to account for a pretty significant chunk of Facebook’s overall revenue, though that’s long since passed (and was likely exaggerated even at the time). App-install ads remain a small minority of overall online advertising, so we shouldn’t expect Snapchat’s ad revenue trajectory to change dramatically off the back of this, but it should be useful new revenue nonetheless.
via Business Insider
Snapchat Makes Stories Searchable – Mashable (Mar 31, 2017)
We’re seeing a shift among the social networks from making accessible only content shared by friends to opening up a much wider range of content from others, whether that content is exposed through recommendations, curation, or, as in this case, search. Given how much social networks have become essentially content hubs, the amount of time people spend on them today is much less about spending time with friends as spending time with content, and so the more content can be surfaced, the longer they’re likely to spend there. Snapchat is now adding search as a way for people to find Stories not shared by their own friends but which might relate to their interests, whether those are sports teams, venues, cities, or other interests (like “puppies”). That should help users both find more content but also potentially discover new accounts to follow on an ongoing basis, all of which should deepen and lengthen engagement. In some ways, this is analogous to the recent work Facebook has done with recommending videos in both its mobile and TV apps – both companies are looking beyond the social graph for ways to surface interesting content for their users. Snapchat, of course, already has its Discover tab for content created by brands and professional outlets.
via Mashable
Snapchat Discover publishers face tough challenge as platform chases TV – Digiday (Mar 15, 2017)
The Snapchat as TV thing is getting a little hackneyed, but it works because it’s increasingly true – it appears Snapchat is increasingly prioritizing video over other content in its Discover tab, and perhaps especially original video created for the platform. That could push other content (and its publishers) further down the listing of Stories within Discover, or could potentially demote all non-video content into a different area entirely. That’s not terrible news for those content partners who major in video, but would obviously be much worse for those who focus on articles and the like. My guess is that those already get much less viewership than the video stories given the setting and the audience, but it is going to push Snapchat to become much more video-oriented overall.
via Digiday
Snap’s revenue growth looks like it will come from more ads, not more users – Recode (Mar 13, 2017)
In a sense, there’s really nothing new here – the key quote comes from the S-1/A filing from a month ago. The article, though, argues that Snap will make money from higher ARPU over time rather than from user growth. While it clearly won’t be going for user growth in emerging markets for the reasons stated in its S-1/A, I don’t read that as not being focused on user growth – it clearly will be but that focus will be on mature markets, where it still has tons of headroom, at least in theory. It’s worth noting some other things here: Kurt talks about Facebook as the comparator, and it’s clearly the obvious one, but Twitter is another. And whereas Facebook has now reached a nearly $20 ARPU in the US quarterly, Twitter has stagnated at around $6-7 over the past year. Just because Facebook was able to keep growing ARPU seemingly indefinitely, that doesn’t mean Snapchat will be able to. And I’d argue that with such a simple, non-stream-based interface, Snap probably has far fewer places to put ads, meaning its ceiling is likely quite a bit lower than Facebook’s. It’s also worth remembering that Facebook’s ARPU numbers are at least a little misleading – the user number is only for the core Facebook app, whereas the revenue number includes Instagram, WhatsApp, and Messenger too. Lastly, part of rising ARPU at Facebook is price per ad, not just more ads shown, which is a reflection of new demand outstripping new supply, something else that’s not guaranteed with Snapchat. Overall, I’d be very wary of drawing too many conclusions about Snapchat’s potential from Facebook.
via Recode
Frustrated Snap Social Influencers Leaving For Rival Platforms – BuzzFeed (Mar 2, 2017)
The attitude reported in this piece is not new at all – the New York Times reported on this a while back, but it’s been part of Snap’s DNA from the beginning: it simply doesn’t engage with “influencers” or creatives who use the platform to promote themselves in the way other platforms do. What’s new in this BuzzFeed piece is that it claims influencers are leaving the platform for others where they’re treated better. Snap’s official comment in the article couldn’t be more blasé – it basically says it cares more about its customers and official media partners than these “creators” – but it can probably afford to be that way. The reality is that these influencers aren’t likely nearly as important on a platform that has lots of official, professionally produced content from brands and media outlets as it is on a user-generated network. Between content from friends and content from these official partners, Snapchat likely has plenty to keep users interested and engaged without having to kowtow to independent creators.
via Frustrated Snap Social Influencers Leaving For Rival Platforms – BuzzFeed News
Snap’s shares pop after $3.4 billion IPO – Reuters (Mar 2, 2017)
Snap’s IPO was widely expected to come today, and it ended up being a great debut for the stock, which rose 44% by the time the market closed, though it’s lost a little since and seems to be fairly volatile. As I’ve argued, the IPO itself comes at an extremely risky time for Snap and its investors, because there has been slowing growth but not enough time to see whether that growth will rebound, making future growth uncertain. The pop today wasn’t a surprise – the market has been so hungry for a major tech IPO for such a long time, and Snapchat is such a hot property, that retail investors chasing the next big thing were always going to jump in in a big way. At this point, Snapchat’s growth could still recover and it could go on to become one of the big success stories of the 2010s, or it could become another Twitter – there’s really no way to know at this point.
via Reuters
Snap, Which Calls Itself a Camera Company, Has Looked at Building Cameras (Mar 1, 2017)
It’s almost certainly not a coincidence that not one but two rumors about Snap working on additional hardware have sprouted the week of its IPO, both apparently well sourced yet conveniently vague on whether a product will actually ever be launched. This is good hype fodder for an IPO with some serious question marks over it, and yet non-specific enough that the company can afford never to release either of these two products (the Times reports a drone, while TechCrunch discusses a 360 degree camera). None of this is to say that Snap – which now calls itself a camera company and has one piece of camera hardware already in Spectacles – won’t release more camera hardware in future. In fact, I’d say it seems very likely. But when it happens, we’ll see whether that’s actually a bet that ends up moving the needle or just ends up being a novelty as Spectacles seem to have been. I’m still not convinced that Snap will ever be able to make a serious business out of hardware, its marketing genius notwithstanding.
via New York Times and TechCrunch
Parents adopting Snapchat as their kids exit – Axios (Mar 1, 2017)
We’ve seen this happen so many times now with social networks that it’s a cliche at this point – as the parents arrive, the kids start leaving. That’s still an exaggeration with Snapchat at this point, and certainly the arrival of the olds isn’t the cause of the departure (technically, slower growth) among youngsters, but a maturing of the base is natural over time as Snapchat already has massive penetration among younger demographics, at least in its biggest markets. These eMarketer numbers, though, still don’t paint a picture of very rapid growth at Snap, which continues to be the biggest worry ahead of this week’s IPO.
via Axios
Snapchat Parent Snap Inc. Sets Valuation at $19.5 Billion to $22.2 Billion as IPO Approaches – WSJ (Feb 16, 2017)
It’s hard to avoid the sense that this valuation coming in at the low end of the previous target range is a sign of dampening excitement in the Snap IPO following the release of the S-1 and other worrying signs. That’s a sign of a certain amount of humility and realism from the company, which is a good thing. It’s still a massive valuation for a company at Snap’s stage of maturity, and it’s always possible the valuation will come down still further (or go up) following the roadshow, as investors get to kick the tires a little more. I’m more curious than ever what happens when the IPO finally kicks off because – as I wrote the other day – Snap is debuting at a terrible time in its history.
via WSJ
Snapchat is Struggling On Android — The Information (Feb 14, 2017)
I’ve tweaked the headline here to reflect the content of the article: the point here that Snapchat doesn’t work as well on Android as on the iPhone, where it began and where most of its employees and many of its users are. This wasn’t an accident – Snap is open in its S-1 filing about the fact that it has prioritized iPhone until now, and that’s not an unusual strategy for developers pursuing the high end market. However, it works a lot better as a strategy for a news, video, photo filter, or other non-social app than it does for a social app – by definition, social apps need broad reach to create the kinds of network effects that make them successful. It’s not that Snapchat hasn’t had an Android app for a long time – it launched it in October 2012, when it still had a relatively tiny number of users – but that it’s rather neglected the Android app. It explicitly called out some bugs and underperformance as a reason for its lackluster user growth late last year in its IPO filing, but this Information piece argues that it’s not moving fast enough to improve the experience there. And yet it has to be good there if it’s to grow, especially outside the US and major European markets.
via The Information