Snapchat. I already feel like I’m too old to understand
the profound appeal of this app. Why do
I need yet another channel to communicate with my friends and family? I already
have text, email, FaceTime, Instagram, Twitter…My voice is heard! Or is it?
Snapchat’s user base has
stepped up its game over the last year.
In June the company transacted a whopping 200 million photos/month,
flash-forward to the present and that number has almost doubled at 350 million
photos/month. And the cherry on top is
that Facebook just made a $3B offer for the non-revenue generating company…an
offer that was the founders promptly rejected.
Where is the value? What are we missing? People have said that a
platform that displays something for 3 seconds only to never be seen again will
never generate revenue from an ad-centric business model. But I’d like to challenge that
assumption. What is the value of the ad
is actually increased from the fleeting nature of the interaction? What if
customers become more engaged because they only see a hint of something and
they want to know more? I think there is
something powerful about having the opportunity to experience something
temporarily. Think about how successful
“limited time offers” are, or more generally, how scarcity drives up
price. The key risks are in measurement-
How could advertisers measure the success of a particular campaign? Because content
isn’t shared, does this drive up the production costs of each campaign?
Regardless of these
challenges, it’s clear that the Snapchat phenomenon is something to watch. If this is how to reach the lucrative teenage
demographic, I trust that advertisers will find a way to make it work for
them.
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