by beat on 2/10/14, 8:36 PM
Monetizing a social user base is a great strategy for making millions of dollars. But Snapchat is clearly aiming at
billions, or they wouldn't have turned down the multi-billion dollar offers they've already received. Facebook has little to fear from social apps with millions in revenue... so why were they willing to pay so much for a zero-revenue company? And why are VCs ponying up tens of millions in funding for a zero-revenue product? The potential revenue from these dinky little solutions suggested here won't even break even for the VC.
No, they have something much bigger and better up their sleeves. Leaving a few million on the table now in the interest of potential billions later is a very good trade.
Personally, I think the world is ready for a footprint-free social app - not just photos, but threaded conversation and what not. Like Facebook, only without anything for employers to troll and exes to stalk. I think they could literally beat Facebook. That's worth a lot of waiting and risk.
by minimaxir on 2/10/14, 7:56 PM
"Turning on ads" is not a magic monetization panacea for an established startup because you will lose users in protest. And there are more than enough replacements for Snapchat for those users to go to.
by adventured on 2/10/14, 8:21 PM
This should be titled: How Snapchat is missing out on destroying its "cool" factor by poorly monetizing an app that people can and will easily switch away from if you annoy them.
by sytelus on 2/10/14, 10:40 PM
Silly question: What the hell is SnapChat? I feel like Cave Man living under rocks. I looked up SnapChat's website and there is hardly any info or encouragement why I should use this thing. It totally smells like Instagram which also I never used and know no one who uses it to date. I guess I'm just not cool.
by johnrob on 2/10/14, 8:07 PM
Are we sure the fill rate would be 100%? There isn't an infinite supply of ads waiting to be displayed.
by kosei on 2/10/14, 8:47 PM
From experience, I'm always wary of ad sales folks giving "conservative estimates". This assumes a standard CTR that may not apply based on the medium based on user base, actual interaction rates (assuming that Snapchat users are more tech-savvy and less likely to interact with ads), etc. Interesting, but I'd guess fairly misleading from an actual numbers standpoint, considering it's in Namo's best interests to inflate the numbers for PR purposes.
by jevinskie on 2/10/14, 8:28 PM
I, personally, won't sit through a 30 second TV ad to see a 10 second (at most!) video from a friend.
by Newky on 2/10/14, 9:29 PM
What is wrong with the sort of thing that whatsapp do? a small fee (~€1) a year.
If they could make it payable via some easy method (SMS?) then people would willingly pay a small fee for the use of snapchat. Sure people would go "Bah Humbug! Snapchat want me to pay a €1" but they have a very strong userbase, one that is extremely active. In the long run, I think their user base would prefer a one off payment than being inundated with advertising.
by uptown on 2/10/14, 10:35 PM
I've always thought the best way for Snapchat to monetize would be to offer you one more glance at a photo if you watch an ad first. They could even make it opt-in on the photo-sharer's side. Give them a small percentage of the revenue generated by that advertisement to encourage opting-in, and also spur continued use of the service.
by msprague on 2/10/14, 11:44 PM
Even if this is true, this assumes that the snapchat user base will remain stable. I've yet to see a substantial argument of why snapchat isn't just another fad. Does anyone else have this concern or am I just being pessimistic?
by matznerd on 2/10/14, 9:06 PM
I have ads in snapchat right now and it isn't very intrusive.
by zimbatm on 2/10/14, 10:47 PM
Better idea: allow users to pay to "keep" the snaps for a bit more longer.
by michaelochurch on 2/10/14, 8:17 PM
For Snapchat, monetizing with 320x50 banners or full-screen interstitials would degrade their user experience and deliver a serious hit to their brand.Not really. They already have Evan Spiegel (Valleywag him) as their CEO. People who care about quality are not going to use it. "A serious hit to [the] brand" is a non-threat. What brand?
by shocks on 2/10/14, 8:10 PM
Why is everything bold?