By Adam Fraser
Snapchat has become the poster child for the “millennial social network”. Launched in mid 2011 as a mobile only platform, it now has at least 100m monthly active users (some speculate the actual number is closer to 200m), 71% of whom are under 25 and highly engaged, sending more than 800m snaps per day.
In stock market parlance, millennials have gone long Snapchat and short Facebook. Quoting again for the recent medium post “A teenagers view of social media“:
“Snapchat is where we can really be ourselves while being attached to our social identity. Without the constant social pressure of a follower count or Facebook friends, I am not constantly having these random people shoved in front of me. Instead, Snapchat is a somewhat intimate network of friends…”
Snapchat is more popular than Facebook with teenagers in many markets.
However, the social network with the ultimate millennial audience may just be growing up in media terms.
It has gone through the tried and trusted model of social networks – attract an audience, allow free reign for “organic” content, then once a scalable loyal base has been established, find a native way to monetise this via advertising and sponsorship. As Gary Vayernchuk says “marketers ruin everything” and in Snapchat’s case with 100m+monthly users in the very attractive “youth market”, the marketers are certainly coming.
Snapchat has evolved a great deal since it commenced as the quirky mobile app which allowed users to send video or photos which disappeared after 10 seconds.
In October 2013 it launched stories, allowing users to create connected narratives which lasted 24 hours. A rolling storyboard of your daily life. Increased engagement. Increased attention.
In May 2014 it moved into the straight ‘traditional’ text messaging space dominated by WhatsApp by adding text chat and video calls.
In early 2015 it launched its new Discovery platform which in one fell swoop effectively moved Snapchat into the world of online publishing, backed by sponsored ads. In a complete pivot from its trademark disappearing messages, 11 media partners including CNN, MTV, Daily Mail and CNN offered short form video content in a separate area of the platform. Snapchat’s own announcement on this included a telling remark:
“This is not social media. Social media companies tell us what to read based on what’s most recent or most popular. We see it differently. We count on editors and artists, not clicks and shares, to determine what’s important.”
Interesting move. Snapchat is self-proclaiming itself “not social media”. No algorithms to determine what is found within Discovery. No self-curation of content. For now this is controlled by Snapchat. Straight media within the broader messaging platform. The content refreshes every 24 hours encouraging regular engagement amongst its users. The advertising options within this are more open, including a possible “click to buy” button.
Shortly after the launch of Discovery, Madonna released her new video on Snapchat. Now I know its not 1985 and Madonna is no longer at the peak of her powers but that’s still an impressive marker for such a new media platform. Not itunes. Not Facebook. Not Instagram. Madonna chose new kid on the block Snapchat. Rumours had previously emerged of Snapchat’s interest in the music industry based on its audience demographic.
It’s still early days, but of all the networks Snapchat seems to be managing the inverse relationship between revenue generation and user experience the most effectively. Driven by the powerful psychology of ‘view it now or it disappears forever’, the sponsored content to date has been received reasonably well.
800m snaps and 1bn stories viewed daily. Thats a lot of attention – the scarcest commodity around. Whilst not yet profitable, investors like what they see. A current fundraising is rumoured to value Snapchat at $19bn.
Novel and unique as Snapchat’s platform is, ultimately they have followed the golden rule of media. Its all about the audience. Build a large, engaged and loyal audience, then the monetisation opportunities will take care of themselves. Snapchat needs to execute on this without overly disrupting the user experience but it seems to be navigating this minefield reasonably well. Whether it is worth $19bn is a question for another day, but the new kid on the block is growing up fast.