Snap’s Challenge: How to Grow Without Getting Awkward

This article in the WSJ details the challenges that Snapchat will face in generating advertising revenue.

According to Barclays, the best ad lever that Snapchat has is it's stories feature, which stitches many different snaps together, and makes them available for 24 hours. Ads using the stories feature currently generates about 25% of the company's ad revenue, with the rest coming from sponsorships and other publisher content.

Outside of Stories, Snapchat doesn't have any algorithms to allow for seeing ads in the user experience, unlike Facebook. Facebook has a news feed where ads are placed between posting to posting.

The problem is, using Stories to create ads is costly, and since there's no share feature, it doesn't have the ability to go viral. The valuation of Snapchat is quite impressive, but it sounds like the business model still needs to be determined, and there's risk that it never is. Given this, I'd probably short the stock.


https://www.wsj.com/articles/snaps-challenge-how-to-grow-without-getting-awkward-1497528001

How Sprite’s Social Media Campaign Got 2 Million Views in 2 Days

How Sprite’s Social Media Campaign Got 2 Million Views in 2 Days

Sprite’s recent Snapchat campaign in Brazil is making waves worldwide for successfully generating over two million views in days. Called “RFRSH Na Lata,” or “refresh on the can,” the campaign runs through November 27 and offers Snapchat users a chance to appear on the company’s soda cans in Brazil.

What does this successful campaign exemplify?

First, one could say that something as “classical” as appearing in packaging still motivates the audience. However, what is exciting and new is how Sprite fused technology, social media, and product placement to captivate the attention of this audience.

Second, targeting the right audience will bring an adequate response. Hosting this type of contest on a Sprite can wouldn’t work if it didn’t appeal to customers who want to discover great content or star in the campaign.

Finally, using the leverage of mutual benefit can be extremely useful.  By making the partnership mutually beneficial, Sprite is not just asking for the reach and influence of Snapchat stars—it’s also offering a compelling value proposition. To raise awareness for the campaign, Sprite partnered with 15 influential Brazilian Snapchat stars to print their Snapcodes on cans. According to the agency behind this campaign, CUBOCC, many of the Snapchat stars featured have tripled their fanbase in a two-week period as a result of the campaign.

Source:

http://www.convinceandconvert.com/social-media-case-studies/social-media-campaign-views/

Brands & Publishers’ Snapchat Initiatives

With its branded geofilters and video advertisements, Snapchat has emerged as one of the hottest marketing channels for brands. Retailers are customizing their campaigns for this medium to capture more Millenial audiences, which compose of 71% of total Snapchat users. Below are several tactics that have been proven to be useful to brands.

As Snapchat’s name suggested, it is much more effective to feature short and snappy contents, since the app’s millennial audience could be quick to hit skip. According to stats from sponsors, since 70% of audiences stop watching Snapchat videos after 3 seconds, brands should get their message out in two seconds, or else most won’t see it. In addition, brands choose to feature ads that are native and organic to the platform, which normally leads to higher completion rates. Brands that featured creative and customized Snapchat campaigns have witnessed substantial rate of favorability lift, such as the Snapchat Live Story for the MTV video music award, which saw a 28 percent completion rate, leading to a 50% increase of impressions and click-through of webpages related to MTV. According to the representatives from Viacom, since “Snapchat is where ads are pure, 100 percent in view of the screen, not hidden anywhere”, brands should narrate more creative and unique story-based contents.

Snapchat’s Discover channel, an original media feature that was unveiled this January, also opened multiple possibilities. Compared with other channels, Discover ads are less expensive in that Snapchat has agreed to let the publishers strike their own advertising deals with brands making the Discover ads cost approximately $0.15 per view. In addition, rather than leveraging algorithms to target audiences, Snapchat counts on editors and artists to determine what is important.

Brands often feature fresh contents on Discover so as to cross-promote. Sony Pictures has also purchased its own Discover channel to promote the newly released Bond installment “Spectre”, which will be labeled as “Sponsored” on the Discover tab. and will be loaded with cast interviews made specially for Snapchat, behind-the-scenes videos from the movie’s exotic shooting locals, as well as even sendable filters. Universal Studio has also purchased a sponsored snap story for its low-budget horror movie “Oujia” last year, which was simply composed of a trailer for it displayed on user’s Recent Updates list but wasn’t interactive or shareable like the channel for “Spectre” is. 

In addition, Snapchat has developed its first call-to-action style ad last week. The ad for the Activision game, “Call of Duty: Black Ops 3” ran on the Daily Mail’s channel in the Discover section. It requires users to swipe up to view a full trailer, a mechanism that served to create a lean-in experience— a video view that requires an action. Similar to the results from interactive Snapchat Ads, showing that whenever the users actually click on the ads they are more likely to complete it, the two-minute call-to-action type ad has generated almost 30% completion rate, radically higher than that of Autoplay videos on Facebook, which amounts to a mere 10%.

Snapchat has also announced last week of its confirmed 6 billion daily view count, just days after Facebook reached 8 billion video views per day. Even though most videos are personal messages that friends send to each other and therefore not tied to advertising, Snapchat’s video-oriented approach has allowed it to usurp the crown as the focal point of youthful Internet usage largely due to the storyline nature of its contents. Retailers have been utilizing the Live Story framework to post video montages from special events like fashion runway shows or sports stadium. Sprite also ran a campaign last month, which started with 15 different Snapchat codes printed on cans that lead users to videos of fifteen celebrities sharing Sprite-related stories. Sprite is said to ship additional cans slapped with Snapchat logos that lead consumers to other users’ accounts on the messaging app. Sprite has also set up a pop-up retail location in New York this summer to offer people nearby special filters to put on their Snapchat photos.

With more hypes generated through custom filter overlays and additional sticks, Snapchat is said to attract more teenagers and twenty-somethings that are often disillusioned by traditional advertising. Through producing original and customized contents, as well as by generating interactions among fans via brand stories, retailers could talk directly to younger customers to promote the brand and the products.

Related Websites:

•       http://digiday.com/platforms/snapchats-new-ad-invites-people-click-view-brands/
•       http://digiday.com/platforms/snapchat-went-20-million-photos-day-6-billion-video-views/
•       http://digiday.com/platforms/mtv-drew-12-million-views-snapchat-vmas/

Snapchat Lenses Feature

Snapchat Lenses Feature

If you are a Snapchat fan, you probably saw that all your friends were doing a Snapchat with special effects on their faces. Examples are: converting your tongue into a rainbow, your eyes into hearts, your face into a monster… Starting this Halloween, Snapchat will offer "sponsored lenses" for companies to buy, likely to promote new movies in a bid to generate more revenue.

For advertisers the cost is going to be $750,000 on peak days (holiday such as Black Friday or Thanksgiving) and $450,000 on an off peak day. Even though you think it is a huge investment, Snapchat has 100 million users a day, which means less than one penny per customer.

My recommendation after seeing all Snapchat’s innovations, download the app now and always have the latest version of Snapchat app.

Source: Tech Times

British Vogue Research: Ad-blocking has limited impact on visually-oriented publishings

  

Fears have been mongering around since Apple unveiled its most recent iOS system allowing ad blocking. Nevertheless, this trepidation, according to Vogue UK’s research, is overblown, and that there could be a silver lining for publishers and brands should they start to shift onto digital platforms.

 The 2015 British Vogue Business Report surveyed 2787 upper-middle-class women to look at the evolving reader relationship with magazines in print and online, and concluded that people’s overall attention to advertisement across all platforms has never been higher, with significant increases for websites and digital editions.

            In addition, over 75% of under-35s said they trusted advertising and other paid-for communications, and a whopping 94% of magazine readers said they paid attention to website advertisements. The premium ads featured on Vogue’s website were described as “genuine” and “appealing” by the likes of Vogue.

            Besides British Vogue’s studies, other researches also bolstered the conclusion that the panic was wildly exaggerated. According to JPMorgan, people were half as likely to block ads on mobile, since ad blocker applications only affect ads on mobile browsers rather than those within apps. In addition, ad blockers of iOS 9 are only able to block pop-ups in Safari, a browser that occupies 23% of total share on tablet and mobile, and an even scantier 4% on desktop.

Moreover, in the context of readers and users of glossy magazine brands in print and online, advertising perusing becomes part of the experience. Half of Vogue’s pages are composed of high quality and engrossing advertisements on which viewers enjoy spending time viewing. Oftentimes the key issues for visual-oriented magazines are to create visually appealing ads so as to captivate readers’ attention rather than to eliminate them altogether. As a result, to generate greater revenue, future publishers should create less but more effective ads.

One short-term solution is to create native, video and branded contents. Publishers could feature product placements within their editorial photo shoots, and create tutorial videos featuring Shoppable Ads integrated within the contents. For high-end brands, followers expected to see more video contents and more exclusives on parties and runway shows. Burberry recently presented the premiere on its exclusive “Functionregalia” collection on Snapchat including a never-before-seen glimpse into its design studios, bringing about the largest audience to date among all other Burberry’s social media platforms have realized. Burberry is said to host a live make-up tutorial on cosmetics in due course that would be streamed exclusively on Sephora’s YouTube channel.

Links

http://digiday.com/publishers/british-vogue-attention-ads/

http://www.businessinsider.com/jp-morgan-note-on-impact-of-ad-blocking-2015-9

http://www.prnewswire.com/news-releases/burberry-presents-the-functionregalia-collection-in-london-accompanied-by-a-live-performance-by-alison-moyet-following-its-premiere-on-snapchat-300146846.html

Snapchat Starts Charging $0.99 For 3 Replays, Adds Face Effect “Lenses”

Snapchat is debuting it's first ever in-app purchase, adding a second source of revenue.  Until now, the app's only revenue has come from advertisements.  Users can now purchase extra replays of snaps ($0.99 for 3 replays).  While this is an excellent way to further monetize the popular app, it also sacrifices some of the ephemerality of the app, which could discourage people from using it as often.

Snapchat is also adding a new free feature in an effort to keep the app fresh.  The "lense" feature will detect faces when taking a snap in selfie mode and enable the user to add graphic overlays.  For example, if you lift your eyebrows, the app will automatically turn your eyes into hearts.

http://techcrunch.com/2015/09/15/snapchat-starts-charging-0-99-for-3-replays-adds-face-effect-lenses/

Millennial Marketing Tips from 4 of the World's Biggest Digital Platforms

Executives from Facebok, Snapchat, Twitter and Pandora gathered at ZenithOptimedia Group's Mobile Day event to give advertisers tips on how to more effectively reach millennials - adults ages 18-34 who don't respond to traditional advertising and are increasing "cutting the cord" (consumers who ditch TV sets to watch videos on smartphones and tablets). Four interesting insights for the digital players are:

1. Get Local

Steve Hwang, director of operations and strategy at Snapchat, said brands should be involved on a more local level in the real world. Snapchat's core group of 18- to 24-year-olds hate feeling like they are being marketed to. Instead they want to watch videos and look at photos their friends are sharing. Snapchat has a "Live Story feature" that curates streams about nearby events that brands can buy full-page placements in. 

2. Less is more with video

Although it seems like autoplay video has taken over Facebook, brands are still struggling with building the right content for the platform. Facebook advises brands to make four, eight- and 10-second videos that grab people's attention in a news feed. Once people tap on a video, the sound automatically kicks in, which helps hook them to watch longer clips. 

3. Find social's new celebrities

According to Twitter, vine stars are hotter than Hollywood A-listers for millennials. Some influencers have followers and a social graph that is far bigger than any celebrity, and brands should try to emulate or work with these people when posting videos, photos and GIFs to Twitter.

4. Data-backed creative

Pandora revealed that women age 18 to 34 like to listen to YouTube violinist Lindsey Stirling on the Pandora, and they overwhelmingly listen to her from the company's app. This is an example of data that can shape a campaign and determine if it should run on mobile or desktop. Brands should tailor creative message to the environment and mindset. 

Source: 

http://www.adweek.com/news/technology/top-millennnial-marketing-tips-4-worlds-biggest-digital-platforms-165888

Snapchat Launches Discover

Snapchat isn't just for silly videos and photos anymore. They have officially launched Discover, a new way for media companies to publish content for Snapchat users. Discover will allow Snapchatters to access special content which will only be available for a limited amount of time, keeping in line with the app's general theme. Currently, content is available from media outlets like ESPN, National Geographic, People, and Cosmopolitan and features interactive articles and photos designed specifically for the app.

Snapchat Discover Media Platform

This is the first time outside media creators have been able to post content to the app, but it is not Snapchat's first attempt at monetizing its service. Already companies have begun to leverage the popularity of Snapchat by posting advertisements as "snaps" to users' apps alongside other user generated content.

It will be some time before we see whether Snapchat's new move is a win, but for the time being, it is one more digital door allowing media companies to deliver content (and thus market to) users.

Snapchat Introduces Payments Feature

Earlier this week, Snapchat unveiled "Snapcash," a new feature in partnership with Square, that will enable users to send and receive money through the app. For all those who are concerned with the recent security breaches on Snapchat, the company has made it clear that all banking information will be stored on the Square service, and not on their own platform.

To send money, a Snapchat user simply enters text with a dollar amount, such as "here's $10 for the movie ticket." The app will recognize the "$10" text and a payments button will appear allowing you to instantly transfer the money, provided you are signed up for the Snapcash service.

At the current time, Snapcash is only available to those 18 and older, and those using Visa and MasterCard debit cards. Pending its initial success, Snapcash will likely be rolled out on a broader scale. While this has the potential to challenge current industry leaders, including Venmo and Paypal, representatives for Snapchat claim that this is not intended to enter into a new business model, but rather to simply expand upon the offerings of their app in a way that best fits the needs of its users.

This partnership is incredibly beneficial to both parties. For Snapchat, this is the first time they are opening their app to other partners (with the exception of Snapchat Stories). In addition, Square has not partnered with other apps to date, and this launch is the perfect test to understand the potential of Square Cash in the future.

Snapcash is available as part of the Android update that was rolled out on Monday, November 17, with an iOS version to come. Read more about the Snapchat and Square partnership in the full article here, and watch the YouTube video that was created to announce the launch below:

Brands Create Authenticity with New Content Partners

AdAge is reporting that brands have stepped up their efforts to create engaging content with two specific strategic partners; publishers and independent content creators.

For example, Victorinox is partnering with both Wired Magazine and the Instagram-celebrity couple @withhearts and @bethanymarieco to outfit the duo with Victorinox products while they trek among various mountain destinations throughout the world. While providing comp'd swag to influencers is nothing new for brands, Victorinox and Wired Magazine plan to repurpose the content from the pair's own social media channels to the publisher's various content platforms as well as the brand's.

This approach is somewhat novel given that brands are building up their own media properties by supplying them with premium content while relying on publishers, who continue to expand their footprint, to push branded content as well. However, both the brands and publishers realize they lack the all-important "authenticity" factor which makes partnerships with digital influencers so important in this new media equation. All of these efforts ladder back to the growing reality that consumers' eyeballs are increasingly fragmented and brands can't rely on just one channel to break through the clutter.

Publishers such as InStyle are also experimenting with emerging social media channels such as Snapchat to break through to consumers. InStyle has been building up its Snapchat following all year but releasing exclusive content in expectation of marketing a Holiday gift guide through the channel for 20 different advertisers. This tactic will probably prove successful since Snapchat is still a relatively innovative platform for brands and consumers are more open to following brands/publishers and consuming their content.

All of these tactics all boil down to the same marketing truth: Consumers are increasingly expecting the unexpected when it comes to advertising - innovative content and context is not only successful, it is becoming mandatory.