It’s a bit of a three-way Catch-22: SnapChat needs to monetize, advertisers need to see solid engagement metrics and ROI and SnapChat users need to feel like they’re not being blasted by irrelevant advertising.
Therein lies the rub for several of the agencies AdExchanger spoke with following The Wall Street Journal’s report on a new feature dubbed SnapChat Discovery that aims to enable brands and publishers to share ads and other media content with SnapChat users. Discovery will reportedly be available in November.
There’s not too much information about how exactly Discovery will work – SnapChat declined to comment – but it appears like it’ll function similarly to how users currently engage with the platform. Discovery will ostensibly enable users to watch videos, read articles and view advertisements by holding a finger down on the screen. Noah Mallin, social media practice lead at MEC, theorized that content might ostensibly be quarantined into a separate stream along the lines of what Twitter does with its Discover feature.
And that’s all well and good – but what about the metrics?
SnapChat has an enviable user base of about 27 million mostly teen users, according to comScore, and claims that “stories” are viewed more than 1 billion (billion with a “B”) times a day. Although snaps traditionally disappear after a few seconds, stories – a series of snaps strung together into a sort of narrative flip book – stick around for 24 hours.
It’s quite easy to envision a brand taking advantage of stories, and a number already have, including red carpet snaps from the season three premiere of HBO’s "Girls" and a snap sequence from GrubHub that ultimately led users to a promo code.
But those activations were free. Discovery would mean paid media – and with great paid media comes great responsibility.
“To get advertisers to spend on their platform, SnapChat needs to surface more data than they are right now,” Mallin said. “The tricky thing with SnapChat is that they’re not that great at exposing data. For example, we don’t know what times of day people are using SnapChat or what their gender is. Even basic advertising initiatives require basic reporting.”
That hasn’t stopped SnapChat from courting brands over the last several weeks. In fact, a SnapChat pitch deck has been making the rounds since it was leaked to Digiday at the beginning of August – but there’s no mention in it of paid media. That’s what it appears Discovery will be for.
When it comes to data, SnapChat’s stated philosophy is “delete is our default,” which, while part of its USP for users, is less than helpful to advertisers looking to target specific user segments. But while SnapChat may not currently collect or share demographic data, it’s most definitely tapping into the power of location with its so-called geofilters feature, which allows users to add location stickers to their snaps. Geofilters are only available in New York and Los Angeles at the moment, but the potential is certainly there to extend the feature to other states and countries.
“By SnapChat’s own word, via their marketing deck, there is definitely strong potential for targeting, certainly at a geographic level, with geofilters already showcasing this capability, which would be great for news outlets at a local level,” said Andrew Cunningham, community lead at Huge. “Age is the other confirmed piece of data they collect, although past that it’s difficult to say for sure how granular they will get based on the current version of the app and their commitment to deletion.”
But for Craig Elimeliah, SVP and director of creative technology at RAPP, that commitment to deletion isn’t all that convincing from an ROI standpoint.
“It’s a challenge for new channels and new mediums to create new metrics to justify spending money against them,” Elimeliah said. “If the buy is minimal and it’s just about running a little campaign just for the credibility to be able to say, ‘We did something on SnapChat,’ I can see a certain amount of budget being set aside for that. But SnapChat doesn’t seem to have the ability to close the loop and drive revenue and get people into the store.”
Elimeliah summed it up like this: “No matter how charming your creative director is or how well he or she is able to convince a client to spend money on an experimental platform, you ultimately need the numbers.”
It’s also unclear how SnapChat will successfully serve advertising content in context. On Facebook, content is targeted based on interest, behavior and a wealth of self-supplied personal information. Twitter, a platform where users have no expectation of privacy, is experimenting with serving ads based on the content of tweets. But neither tactic is all that viable of an option for SnapChat, which a) doesn’t have Facebook’s access to data, and b) has a user base that would probably balk at ad content targeted to the content in their snaps.
Context could therefore be a challenge for SnapChat – which is not great, considering that, in the words of Mat Szwajkos, director of content production at POSSIBLE, “context is everything.”
“What makes SnapChat unique in the social media ecosystem is that the audience is attentive and expects to act quickly,” said Szwajkos. “So, delivering content in the right context is essential for agencies and brands to be successful using the platform.”
While the industry can only speculate about exactly how much advertising budget SnapChat will ultimately snap up, it’s arguable that monetization wouldn’t be something it would have had to worry about if SnapChat CEO and founder Evan Spiegel had accepted Facebook’s $3 billion acquisition offer last year. Spiegel told Forbes that he spurned the offer because trading the business “for some short-term gain isn’t very interesting.”
Interesting or not, RAPP’s Elimeliah said SnapChat might be an easier sell to advertisers if it was one of the many elements that “makes up the social media Voltron that is Facebook.”
“I think SnapChat would be a lot better positioned as a component of a network that marketers could use to tell stories across channels,” Elimeliah said. “Facebook and Twitter worked really hard to get that credibility for themselves. It was a steep hill building trust with brands and now they’re talking the same language and they understand the types of products marketers are looking for. SnapChat, to me, doesn’t seem to have that, at least not yet.”
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