Snapchat should emulate Facebook’s ad strategy
Personal messaging is Snapchat’s soul. But it’s time the company unified its product priorities with financial ones
What if Snapchat were to copy Facebook for a change? Evan Spiegel, Snap Inc’s co-founder and chief executive, has said that Snapchat is a place for deep interactions with close contacts. And much of the app’s activity is people firing photos and short videos — called “snaps” — back and forth privately to friends as a form of visual conversation.
But advertisements don’t appear in the stream of more than 3 billion snaps that users send daily. Snapchat’s advertising spots pop up in a public part of the app where news organisations, entertainment companies and celebrities post to the world. Snapchat needs to lure people snapping with their buddies to the part of the app where Snap makes money.
The solution to this is one that Snapchat fans may not like: Snap should start selling ads in or between the app’s private communications. Facebook is already experimenting with ways to charge companies for interacting with people in its Messenger chat app. WhatsApp will get a similar treatment soon. Facebook has also relentlessly copied Snapchat, and this is a chance for Snap to turn the tables by borrowing select advertising tactics from Facebook’s messaging apps.
Snapchat has three basic functions. There’s the camera, which people use to take photos or short videos, with doodles or animations. Second, there’s a thread of private communications. And there’s Discover, a section with photo-and-video montages compiled or created by news organisations, entertainment companies and people with a following. Snap makes money from two of those three. Companies like Adidas pay to create animations that let people appear to bounce an animated soccer ball on their selfies. Advertisers buy commercial messages within the Discover montages and between friends’ Stories. But analysts estimate that users spend a small minority of time in the Discover section, which happens to be where the company generates a large share of its ad revenue.
Snap’s chief financial officer said the company was “looking at monetising all aspects of the app” and mentioned the possibility of making money from snap activity. Snapchat is less well suited to commercial interactions than Facebook’s Messenger and WhatsApp, but the older company’s blueprint is still a good place for Snap to start.
No one has cracked the code yet on effective advertising in personal communications. And there are downsides to mixing ads into Snapchat messaging. Snapchat fans might hate it. Plus, the prices for Snapchat’s ads are becoming cheaper as the company embraces computerised auctioning to place them. Adding more slots for commercials that Snap can’t sell or is forced to sell at cut-rate prices or to low-quality advertisers, is the opposite of what the company needs right now.
That’s a worry. But I can’t escape the idea that messaging is the soul of Snapchat. It’s time for the company to unify its product priorities with its financial ones.