Snapchat in a World of Paid Ads

Sowell Train Awards

The Sowell Train Awards aim to provide a little insight into the latest developments in the digital marketing world. From Google algorithm updates to the newest social media features, I take a look at the biggest trends and changes in the field, give a little analysis, and apply a rating system based on the value that each development provides to marketers. Highly valuable developments are awarded a whopping 5 choo choos, and not-so-promising changes get only 1.

Snapchat’s recent rejection of Facebook raised some eyebrows and got the world wondering whether a company that relies solely on donations for revenue is potentially worth more than $3 billion. What many would call a risky move implies that Snapchat CEO Evan Spiegel has his own plans for the app’s growth and development. Presumably, generating a consistent flow of revenue will be a major goal.

Snapchat has ventured into advertising by providing limited advertising capabilities, and some companies, such as Taco Bell, have started to dip their toes in. By creating an account, adding “friends,” and sending Snapchats to their “friends,” these companies have been able to market their products to users who accept their “friend requests.” However, there are a number of serious limitations associated with advertising on Snapchat.

All of this leaves us wondering – what should marketers expect in terms of paid advertisements on Snapchat?

Facebook’s offer to buy Snapchat isn’t the first time that the social media giant has made moves to purchase a successful picture and video sharing mobile app. In 2012, Facebook purchased Instagram for approximately $1 billion. More recently, Instagram announced that it would start to feature advertisements.

Perhaps a clue to the answer lies in the development of ads on Instagram. The most blatant similarity between Snapchat and Instagram is that both focus on drawing the user into a visual experience. It makes sense that both of their ad formats will not only rely heavily on pictures rather than text to convey messages but will also cater to the individual characteristics of each service.

Still in its infant stages of development, Instagram features ads from select brands such as Burberry, Ben and Jerry’s, and General Electric. The success of these ads will probably lie in their ability to convey an idea with little to no text – a picture that is worth a thousand words, if you will. Because these ads will have to be visually appealing, this presents both a challenge and an opportunity to marketers. Products like clothing, cars, and delicious ice cream, the value of which already lies partially in the ability to be visually appealing, will probably have an advantage in the Instagram ad world. Consequently, marketers will have to be smart about deciding whether to market a given product on Instagram.

This leaves us to surmise the future of advertising on Snapchat. Like other social channels, Snapchat will have to adapt ads to a format that fits the characteristics of the app without being excessively annoying to users. Thus, while keeping in mind the (albeit limited) success of their current advertising ventures, it is important to consider how – and if – Snapchat will provide value to marketers as time goes on.

Limited insight into user data is a major challenge for Snapchat. With Instagram’s access to at least some of Facebook’s massive conglomeration of user data, they are set up nicely for ad targeting. Snapchat? Not so much. While companies can add users on Snapchat, and one could argue that users who accept a company’s “friend request” are a decent market because they have already expressed interest, adding random users is by no means sufficient for ad targeting moving forward. Since user data is crucial to a successful ad campaign, Snapchat will almost certainly have to figure out a way to obtain this information. The current model of Snapchat is simply not conducive to gathering data. Whereas Facebook users express their personal preferences through page “likes,” personal profile data, and more, Snapchat users simply send pictures and videos that disappear and don’t provide much information in their user profiles beyond their phone numbers, email addresses, and ages.

The most distinguishing feature of Snapchat is its use as a medium for content that isn’t intended to be lasting. This presents another challenge for marketers, who will presumably have to create ads that somehow match that characteristic. Unlike Instagram, where users can publically express their approval of an ad by favoriting or commenting, Snapchat cannot offer a similar service without changing the very nature of the app because everything disappears so quickly.

Although the advertising future for Snapchat certainly looks less promising than for Instagram, I don’t think that hope is lost.

The new “My Story” feature could be a lifeline for the future of Snapchat advertisements. With the new “My Story” feature on Snapchat, users can choose to allow pictures and videos to last for 24 hours before deletion – much longer than the previous maximum of a few seconds – and users can view a “My Story” multiple times within the 24 hours of its creation. “Friends” of any user who has shared a Snapchat on “My Story” will get a notification of the “My Story” and will have the option of whether or not to view it.

While the option of viewing an ad multiple times might not improve the effectiveness of most ads, users presumably will want to watch a few highly interesting or humorous ads more than once – you only have to look to the hype of Super Bowl ads to see the evidence. And although many users might not choose to open the “My Story,” human curiosity will probably get the better of many of us.

Additionally, the “My Story” feature allows users to string Snapchats together in a particular sequence, and the sequence can be longer than Snapchat maximum length of 10 seconds. Although successful ads certainly can be 10 seconds or less, the ability to create a longer ad increases the versatility of Snapchat advertising.

Even more than with Instagram ads, Snapchat ads will have to be able to grab a user’s attention and convey a message immediately – and be at least mildly entertaining at the same time. The challenge to marketers utilizing Snapchat? Your ad must make an impression that is not only immediate but has enough of a lasting impression that your message lives in the mind of the viewer long after the advertisement has disappeared from the screen.

While I am skeptical of Snapchat’s ability to grab a large audience in a reasonable way, I think that the widespread adoption by so many young people means that it could be viable option.

Therefore, I give Snapchat advertising three choo choos for future digital marketers.

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