Snapchat’s
acquisition of the location data company Placed in early June shows the company
is getting serious about attribution. While
Snapchat has robust location data on its 166 million daily active users,
Placed’s ID graph, which collects geodata on a panel of 150 million opted-in
mobile devices, broadens those insights to people who don’t use Snapchat and
age out of its core demographic and because Placed measures channels beyond
mobile, Snapchat will gain insights on how its audience behaves across
platforms.
In April, Snapchat
debuted its attribution capabilities with the roll out of Snap to Store, a tool
that attributes footfall in retail locations to ads on its platform. The
addition and incorporation of Placed’s ability to attribute ad exposure to
purchase data on its panels of users, along with its 270-plus proprietary
relationships with brands and retailers, Snapchat presumably will be able to go
the extra step in attributing those ads back to purchases. The potential to
perform purchase attribution is a “big plus” that could help Snap attract more
direct-response advertisers to its platform
This blogger
finds this corporate pivot to be a bit contradictory to the allure Snapchat to
its core user base – privacy. During the valuation and IPO process this was
always something that I found confusing – how does a service that champions
privacy monetize the user data it collects.
I for one do
not understand Snapchat – I guess it’s generational. I downloaded the app, but
never really used it because I find it very confusing and, quite honestly, I
don’t have anything to “Snap” about. This is my whole gripe with social media –
who really cares what I have to say – I find people that post opinions and
world outlooks annoying. However, those individuals that use Snapchat
religiously, and from my understanding it has become a religion and boosts a
pretty large cult following amongst the youth of America, were initially drawn
to it because of the temporary nature of the messages. The other aspect of its
core user demographic is their “flavor of the month” view of the world.
Imagine if a
company did a volte face on the core aspect that attracted you to use its
platform, how would you feel? I for one would feel betrayed, and would probably
disassociate myself from said company. If I were a competitor, I would take the
opportunity and step in to offer a service that championed this value (i.e.,
privacy) and gobble up market share – read as a great opportunity for WhatsApp,
although they face a similar privacy dilemma.
I guess I’m
just turned off by things that I don’t understand – and I really just don’t get
Snapchat – which is disconcerting from a valuation perspective as the growth
opportunities are predicated on retaining its existing consumer base and
penetrating other age demographics (i.e., ME). This acquisition, which
I believe is a very insightful one from the perspective of enhancing its
offerings and reach to potential advertisers thereby monetizing its user base
and providing returns to its shareholders, seems like a very sharp double edged
sword. I seriously think that they risk alienating their core users – although
let’s be honest, these aren’t the type of people who are reading the Wall
Street Journal, and who honestly reads updates to Privacy
Agreements – I mean you can’t use the product unless you click “Accept”. Check
out the HUMANCENTiPAD
South Park episode to see the consequences of not reading all the Terms and Conditions to see what those consequences could be.
I suppose
only time will tell whether Snapchat’s value proposition to its user base
conflicts with the manner in which it creates value for the shareholders, but
as we have learned throughout the history of Facebook, privacy infringement and
transparency is a slippery-slope.
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