Image Courtesy: Business Insider
Snapchat's all the rage. Since raising a hefty $60M round from IVP valuing the company at a whopping $800M, the industry has been buzzing. Is this the next Facebook, or MySpace? Now that they're inches from joining the coveted $1B start-up club, one of the big questions that remain is 'how will they make money?' Twitter's Adam Bain has done a great job creating a native advertising program that has balanced advertiser goals with user experience. Can Snapchat follow suit?
CEO Evan Spiegel recently discussed the chat app's plans to integrate monetization opportunities. Initially it seems that they're prioritizing in-app purchases. Other messaging applications such as IMVU, Tencent and Path have had success with these strategies - offering stickers and other messaging-enhancing virtual products, etc. This would not only be great for designers trying to make a buck, but could also present an interesting opt-in opportunity for big brands like Coke, Nike and more. That got me thinking ... what other native opportunities are there that are endemic and authentic to the platform?
For those of you that use Snapchat, you know that - no matter what - you will open a message. It's just too damn fun not to. And given the short nature of that message, you will pay attention. In email marketing land, this is pure gold - 100% open rates + 100% engagement. Given this direction, the question is, can Snapchat create a product, or set of products that enable brands to leverage this amazing opportunity. Enter the 'promoted snap.' This product targeted to brands would be quick 3-10 second video/photo that would enable brands to connect with the Snapchat crowd. How psyched would a studio be to get a 100% engagement on an ad? And I mean real engagement, not the crummy cost-per-view for incentivized ads, or even worse, below the fold run-of-junk? Methinks many. If they add on a 'Save' feature where - if they move quickly - a user can save an limited time offer you might have a unique offer to their platform. Snap and Save Ads? Snap and Share?
I digress. These guys have a lot on their plate. They need to keep an eye on growth, figure out how to move from killer app to platform to play with the big boys (read: twitter/facebook/google), and - oh by the way - make LOTS and LOTS of cash. To put it in context, Facebook makes 2X Snapchat’s valuation per quarter and is worth $70B. That said, CEO Evan Spiegel seems smart and ready to rock. I'm excited to see what's next.