Company / division: Snap

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    Snapchat is Struggling to Grow Partly Because Evan Spiegel Trusts Gut Over Data (May 24, 2017)

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    Snapchat Introduces More Flexible Stories Feature (May 23, 2017)

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    Instagram Launches Selfie Filters (May 16, 2017)

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    Snapchat Debuts Sponsored Filters For the Rear-Facing Camera (May 15, 2017)

    When Facebook announced its AR strategy at F8 a few weeks back, a key component was filters for the rear-facing camera. At least in demos, those filters looked more impressive than what Snapchat had until then offered for the back camera on a phone, interacting in sophisticated ways with real-world elements in much the way Snapchat’s selfie filters do with faces. But the other big difference between Facebook and Snapchat’s approaches to filters is that for now at least Facebook treats them as an open developer platform, while at Snapchat they’re first-party only other than for advertisers. And today Snapchat announced that it will be debuting its first sponsored rear-facing filters, starting with a promotion for a teen romance movie. That’s clearly a new place for Snapchat to put ads within its interface, which will be handy as its user growth continues to be slow. But it also means that Snapchat’s rear-facing filters will continue to be a very narrow, curated experience with the occasional ad, while Facebook’s equivalent may in time offer a much richer, broader set of filters for the rear-facing camera. I would guess that Facebook will in time offer monetization options for developers too (and therefore take a cut) but for now the business models remain quite different, which means that even though from a feature perspective the two will compete, Facebook won’t be offering brands equivalent ad products to the ones Snapchat offers.

    via Bloomberg

    Weekly Narrative Video – AR vs VR (May 12, 2017)

    This week’s Narrative Video covers the “AR vs VR” narrative, and is available now to subscribers on the AR vs VR narrative page. In this video, I discuss the debate about terminology between AR, VR, and Microsoft’s preferred “Mixed Reality”. But I also talk about the current state of both VR and AR and how I see both playing out over the rest of the year. The narrative has been in the news this week, with Microsoft making announcements about mixed reality at Build, and Magic Leap both reaching out to developers and creatives and allegedly readying another round of funding. If you’re not yet a subscriber, you can sign up for a free 30-day trial to see this and other Weekly Narrative Videos, all this week’s posts and the narrative essays, which are exclusive to subscribers.

    ★ Snap Inc Reports More Slow User Growth, Growing Losses, Minimal Spectacles Sales (May 10, 2017)

    Snap, owner of the Snapchat app, today reported its first earnings as a public company, and it was a somewhat unique experience. Its press release, linked below, is entirely devoid of commentary, and although its call had a little more of that in prepared remarks, it was mostly focused on its evolving ad products. The results themselves are more of the same from the S-1 filing, which I suggested at the time was lousy preparation for an IPO because it featured significantly slowing user growth and a lack of clarity about the future. This first quarter of public earnings reinforces that perception, with more slower growth than last year. Massive stock-based compensation related to the IPO dramatically distorts the margin picture, but even stripping out SBC leaves a worsening margin picture as costs in several categories rose faster than revenue. Evan Spiegel and the other executives on the call seemed keener to talk trash about competitors, notably Facebook, than in really answering investors’ pressing questions about user growth, and that’s reflected in the stock price, which has dived since the release. The bombastic tone would have been justifiable if the company’s growth hadn’t slowed significantly since the introduction of Instagram Stories with no signs of recovery, but in the current context it feels like naivety or denial instead. Snap’s management argues that measures of engagement and “creation” are more important than user growth metrics. However, it provides very few of those, and then not consistently or with enough granularity to measure them over time. The conclusion from all of this is that Snap’s future is that of a niche company dominating narrow segments of the population rather than a company with broad mass market appeal, and that has significant implications for its valuation. Two other points worth making: the company provided enough data in today’s call to suggest it sold fewer than 100k Spectacles units since launch, confirming the perception that it’s been seen as an experiment than a meaningful new part of its business. Secondly, it continues to suggest that its sub-par Android app has hurt growth, and that recent improvements have moved the needle, though the numbers in question have moved so little that this isn’t going to turn around the growth trend.

    via Snap Inc.

    Snapchat Adds Several New Features the Day Before its First Earnings Call (May 9, 2017)

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    Snapchat Opens Self-Service Ad Buying Tool for Smaller Businesses (May 4, 2017)

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    Snapchat Claims Unique Audiences Despite Facebook Growth (May 3, 2017)

    Snapchat claims that it is still able to reach unique audiences despite Facebook’s rapid growth. That’s quite a claim since Facebook’s monthly active users now equate to two thirds of the entire US population and it reaches 52% of the US population daily. But app analytics firm App Annie has some numbers which suggest that Snapchat’s audience does include a chunk of users who aren’t active on Facebook or Instagram the same day. So Snapchat’s argument is really one about reaching a narrow base of users that can’t be reached another way, which is really an argument for Snapchat as a complementary ad platform rather than a core platform, given that the reach of both Facebook and Google is far wider. Snapchat’s reach at the end of last year was about one third of Facebook’s in the US, and far lower than that in most markets around the world, so it remains very much a niche play despite its success in a demographic that matters to advertisers.

    via Bloomberg

    Snapchat Introduces 3D Augmented Reality Overlays For Rear-Facing Camera (Apr 18, 2017)

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    Snapchat Now Offers Online-to-Offline Tracking for Ads (Apr 12, 2017)

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    Snapchat adds goal-based bidding for app install ads to rival Facebook – Business Insider (Apr 6, 2017)

    App-install ads can be a pretty lucrative source of revenue for online advertising platforms, because at least some ads pay out at a high rate for a successful ad-driven installation. Given Snapchat’s lock on a particular demographic, app-install ads could provide useful new revenue and boost its relatively low ARPU. There was a time when app-install ads were thought to account for a pretty significant chunk of Facebook’s overall revenue, though that’s long since passed (and was likely exaggerated even at the time). App-install ads remain a small minority of overall online advertising, so we shouldn’t expect Snapchat’s ad revenue trajectory to change dramatically off the back of this, but it should be useful new revenue nonetheless.

    via Business Insider

    Snapchat Makes Stories Searchable – Mashable (Mar 31, 2017)

    We’re seeing a shift among the social networks from making accessible only content shared by friends to opening up a much wider range of content from others, whether that content is exposed through recommendations, curation, or, as in this case, search. Given how much social networks have become essentially content hubs, the amount of time people spend on them today is much less about spending time with friends as spending time with content, and so the more content can be surfaced, the longer they’re likely to spend there. Snapchat is now adding search as a way for people to find Stories not shared by their own friends but which might relate to their interests, whether those are sports teams, venues, cities, or other interests (like “puppies”). That should help users both find more content but also potentially discover new accounts to follow on an ongoing basis, all of which should deepen and lengthen engagement. In some ways, this is analogous to the recent work Facebook has done with recommending videos in both its mobile and TV apps – both companies are looking beyond the social graph for ways to surface interesting content for their users. Snapchat, of course, already has its Discover tab for content created by brands and professional outlets.

    via Mashable

    Facebook launches stories to complete its all-out assault on Snapchat – The Verge (Mar 28, 2017)

    We’ve known this was coming for a while, but there are a couple of extra wrinkles here. First up, let’s get the obvious out of the way – yes, this is another example of Facebook copying Snapchat, although at this point it’s also copying itself, specifically with regard to the presentation of Stories within the Facebook app, which is very similar to what it already does on Instagram. The good news is that it’s avoided the heavy-handedness that characterized its launch of the Stories equivalent My Day in Messenger and to a lesser extent the equivalent Status feature in WhatsApp – this feature is more subtle and slots in at the top of the app a la Instagram, which should lead to less of a backlash from users. One of the weirdest new features here, though, is a new direct message feature, which is an odd Google-like doubling up on messaging given the existence of the Messenger app. There are some other unique features, but several of them feel different for difference’s sake rather than being valuable or more appropriate for the Facebook setting than Instagram, and I’d expect at least some of them to make it into Instagram Stories in time. To take a step back, though, this is an entirely logical next step given the success of Instagram Stories: the latter has over 150 million users out of a monthly active user base of 600 million, while Facebook has a total user base three times that size, meaning it could bring the feature to many more people. And of course, in the process it’s likely to further dent Snapchat’s growth, which continues to be one of the biggest question marks over its long-term trajectory.

    via The Verge

    Social Media is Absorbing Other Media Consumption on Phones – Axios (Mar 22, 2017)

    I’ve changed the headline here to get at what I see as the key takeaway from this data, which is that social media is absorbing other forms of media consumption on phones. As standalone categories, multimedia, news, IM, and so on show up further down the list, but of course social media – by which I suspect we mostly mean Facebook and to a lesser extent Snapchat, Instagram and so on – increasingly includes those things. That’s where that consumption now increasingly happens, rather than in dedicated apps for consuming news, video, and so on. I’ve argued for a while now that Facebook is these days as much a content hub that happens to rely heavily on friends for the content rather than merely a social network, and to me this data confirms that.

    via Axios

    ANA Tells Instagram, Snapchat, Twitter, Pinterest to Open Up – AdAge (Mar 17, 2017)

    The ANA represents 1000 large advertisers including many of the largest companies in the US, so what it says definitely counts for something when it comes to advertising policy. And in this case it’s saying that it wants other big tech companies to submit to outside audits alongside Facebook and Google, who have already committed to do so. Strangely, Instagram is on the list anyway, alongside other independent names like Twitter and Snapchat. There really seems to be increasing pressure from advertisers for transparency and consistency, and this was one of the themes of P&G exec Marc Pritchard’s talk a few weeks back in which he called on the ad industry to do better on several fronts.

    via AdAge

    Snapchat Discover publishers face tough challenge as platform chases TV – Digiday (Mar 15, 2017)

    The Snapchat as TV thing is getting a little hackneyed, but it works because it’s increasingly true – it appears Snapchat is increasingly prioritizing video over other content in its Discover tab, and perhaps especially original video created for the platform. That could push other content (and its publishers) further down the listing of Stories within Discover, or could potentially demote all non-video content into a different area entirely. That’s not terrible news for those content partners who major in video, but would obviously be much worse for those who focus on articles and the like. My guess is that those already get much less viewership than the video stories given the setting and the audience, but it is going to push Snapchat to become much more video-oriented overall.

    via Digiday

    Snap’s revenue growth looks like it will come from more ads, not more users – Recode (Mar 13, 2017)

    In a sense, there’s really nothing new here – the key quote comes from the S-1/A filing from a month ago. The article, though, argues that Snap will make money from higher ARPU over time rather than from user growth. While it clearly won’t be going for user growth in emerging markets for the reasons stated in its S-1/A, I don’t read that as not being focused on user growth – it clearly will be but that focus will be on mature markets, where it still has tons of headroom, at least in theory. It’s worth noting some other things here: Kurt talks about Facebook as the comparator, and it’s clearly the obvious one, but Twitter is another. And whereas Facebook has now reached a nearly $20 ARPU in the US quarterly, Twitter has stagnated at around $6-7 over the past year. Just because Facebook was able to keep growing ARPU seemingly indefinitely, that doesn’t mean Snapchat will be able to. And I’d argue that with such a simple, non-stream-based interface, Snap probably has far fewer places to put ads, meaning its ceiling is likely quite a bit lower than Facebook’s. It’s also worth remembering that Facebook’s ARPU numbers are at least a little misleading – the user number is only for the core Facebook app, whereas the revenue number includes Instagram, WhatsApp, and Messenger too. Lastly, part of rising ARPU at Facebook is price per ad, not just more ads shown, which is a reflection of new demand outstripping new supply, something else that’s not guaranteed with Snapchat. Overall, I’d be very wary of drawing too many conclusions about Snapchat’s potential from Facebook.

    via Recode

    Messenger just became the latest Facebook app to launch a Stories feature – Recode (Mar 9, 2017)

    This feature has been in testing since September, but is now rolling out globally. As I’ve said previously, Facebook has done much better in cloning Snapchat successfully since it stopped trying to recreate the entire app and focused instead on features, with Instagram Stories being the standout example. It’s now rolling out Stories in various ways in its separate apps, with Messenger second to go global, and the core Facebook app likely coming next. And why not? Though I think it’s a little distasteful to see Facebook copying Snapchat so blatantly, it certainly appears to be working, and taking a feature used by a competitor with 160 million users and making it available to ten times that many seems entirely logical.

    via Recode

    Instagram Stories launches geostickers as its Snap attack continues – TechCrunch (Mar 7, 2017)

    Just a quick one here to document yet another “borrowed” feature from Snapchat in Instagram: this time, geostickers. No sponsored stickers yet, but given how hard Facebook is currently pushing to find new ways and places to serve up ads in its various properties, those can’t be far behind. The geostickers are pretty limited for now, but no doubt they’ll also spread in time. This doesn’t feel like one of the most important missing pieces in Instagram’s feature set, but no doubt it’ll help Snapchat converts feel a little more at home once it rolls out more fully.

    via TechCrunch