Can Snapchat become a billion dollar company? Nah.
If you pay attention to certain people online, you’ll believe that the world is getting taken over by Snapchat. The mere fact that I’m even writing this, with only a few months of playing around with it, suggest even to myself, that something is happening.
My usage of it is limited to observing at this point as I don’t feel compelled to create content for it yet or jump ship from my other outlets at this point. Certainly from an attention point of view, it is something that has got huge potential and will continue to be something that I monitor. Why is it so great for attention and engagement? If you’ve not played with it, then there are a few key things;
Full screen
All snaps and stories take are full screen. When you are watching a story or image, you’re stuck there and can’t go anywhere else. It takes over your attention for a good few minutes or more.
Watch or die
If you start to watch a story and come out of it, I’ve found that I’ve then lost it. Additionally if you don’t get around to watching it for that day, then it’s gone forever. (At least for me) That timeliness is so power as it brings people back every day.
Up close and personal
I only follow a handful of people at the moment (because the search features are truly terrible in my experience) but the things that are shared are all about them and their lives. No bumf. No sales. Just people and the things happening in their lives. At the moment this isn’t hugely inspiring or interesting to me as I don’t get much value from it, but perhaps this will change. This is why I see Snapchat more of a threat to Facebook than anything else.
The reason for writing this blog isn’t to give a 101 on Snapchat, I’ll defer to my dear friend Gary Vee for that. My analysis is more from an agency owner POV and observererer of trends..
Snapchat is very light in terms of data about me as a person or the things I like. The lower barrier to entry undoubtedly helped it get started in a world when time is the real commodity. Any new platform launching needs to keep things simple when getting going. But in doing so, when it comes to context and comprehensiveness, it lacks.
Snapchat only has my email, birthday and mobile. That’s it.
Facebook has a whole wealth of information on me, Google know pretty much everything I've ever done or looked at and Twitter has the context of your connections, words and hashtags that you use to tweet. Snapchat can only rely on the brands & friends that you follow and perhaps the words that you overlay on your snaps which are usually minimal and informal at best.
Snapchat > Twitter?
User numbers are on the up and up and if the news is to be believed, Snapchat now has more active users that Twitter. I question the value of that news.
Firstly there is no evidence to back this up other than ‘people who are familiar the matter’. What the hell does that even mean? People from within Snapcaht? A random 16 year old who uses both platforms? It could mean anything. It does annoy me when people see a headline and shout about it loads without questioning the source. I’ve yet to see any evidence from a reputable source to back this up so remain sceptical although I'd guess they aren't far off.
Secondly, everyone knows that Snapchat is a platform primarily for the younger audience. The stats that are available show that the vast majority of users are under 24.
For me as a business owner with a lot of clients working in B2B or B2C with a more mature audience (read adults with responsibilities) this means that most of the people on the platform are not relevant for me or my clients - yet.
Therefore while there may be a lot of activity going on, I’m no better off paying attention to this than say, a forum for retirees.
Twitter in terms of reach, connections and advertising options, is still way ahead and will be for sometime.
The Snapchat problem
Recent reports have outlined that Snapchat wants to be a billion dollar company (don’t we all) and aims to get their via its new ad offerings. They might certainly have the attention of large brands who want to get in front of this audience and have successfully done so in the recent past but how can they scale this up?
I see a few challenges ahead.
Attention interruption
The current state of play on the app is that when I consume snaps or stories, they are personal and at my leisure. The move to put sponsored stories in the middle of a play of stories as reported this week is dangerous. People of all ages want to avoid ads where possible so putting directly in line of things that I’m giving my attention to is no more likely to succeed than the dreaded YouTube pre-roll or website pop up.
Selling the uniqueness
Snapchat has a lack of advertising marketing channel and what is there is largely unobtrusive which makes for a great user experience. The lack of obvious advertising on the app or elsewhere online makes it pretty unique in an age of in feed ads or remarketing banners that follow you around. There is a very fine line between monetisation and pissing off your users that they will have to tread more carefully than those before them given the working of the current app.
Connecting brands with the right people
When I’m connected only to my friends and a handful of brands at best, how the hell can you target the people you want? This is the thing that I still scratch my head about with TV. I'm not in the market for a new car, job, pet food, car insurance or perfume yet I get ads for them every day due to the lack of sophistication in the medium. It's broadcast or bust in the main.
There is a real lack of context to most activity and depth to user profiles on Snapchat which will make targeting the right people in the right way as you can on other platforms incredibly hard as things currently stand.
How will I get my cool surf brand in front of the right people who I want to target in Dorset or Cornwall? What about those who like playing golf or baking or something else?
What next?
From where I’m sat, I can’t see how Snapchat really monetises the attention that it currently has. While stuffing paid snaps on a large scale from global brands might be working to some extent and is driving them decent revenue ($100 million in 2015 apparently) I don’t see enough potential from a self-management of targeting like you have in say AdWords, or depth in terms of user information in say Facebook, to get near that a billion dollars of value.
I’m not saying that they can’t but from where I’m sat there is there is a massive amount of work to be done and I'll have to say nah to the billion number.