Snapchat is a messaging and content sharing platform that has seen a rapid rise of adoption in the highly coveted 13-34 yr old demographic. The company’s ability to empathize with this demographic and deliver a value proposition based on key insights has threatened to snap up coveted advertising dollars from entrenched social media and content providers such as Facebook and Google.
Value Proposition to Users:
With the proliferation of camera connected mobile devices, pictures are no longer just a way of capturing and storing life moments, but have become a medium of communication. Snapchat allows users to capture their life in real time and quickly disburse content to a catered list without worry for quality. Also after witnessing the repercussions that can occur from stored content, social media and messaging users have come to place high value on privacy. Snapchat’s offering of a curated viewership, and unlike Google or Facebook, the assurance that all content is only temporary, has given it an edge over the competition in privacy.
Snapchat has also created a discover product where users can view curated channels from professional content providers such as ESPN. With the advent of ubiquitous content creation, users have placed value on high quality content, and Snapchat has delivered this in a quick and seamless manner. This allows users to immediately consume desired content without having to sift through low quality stuff, a feature that has plagued Google’s Youtube.
Finally, with the proliferation of targeted ad content and user data tracking, users have become weary of the intrusiveness ads have to their experience and the “creepiness” that users can feel from targeted ads. Due to this, Snapchat has implemented a different strategy from Facebook and Google for ad disbursement. With no user tracking or targeted ads, Snapchat continues to place privacy first and instead use less intrusive means of advertising that give the user more control over what ads to view.
This product philosophy has led to a level of user growth and engagement that is highly sought after by advertisers. According to Snapchat, 60% of 13-34 yr old smartphone users use the app, with 100 million daily active users and 3 billion daily video views.
Value Proposition to Advertisers:
Although still preliminary, Snapchat’s ad products have enticed customers to advertise on their platform due to several key features.
SnapChat allows its users to skip ads. This creates a lot of value for the advertiser and the user because it allows users to skip ads that do not interest them, and the advertiser only pays for users that interact with the ad for a determined period of time. This reassures the customer that they are paying for actual views from users that have interest in the product.
Since Snapchat is solely mobile and revolves around full screen photo and video consumption, it offers advertisers the ability to show full screen advertisements. As opposed to competitor Facebook that generally shows horizontal video as part of a newsfeed, Snapchat pushes vertical video formats to its customers, quoting that such content is completed by Snapchat users at nine times the rate of horizontally produced videos.
The value that Snapchat offers its users has given it a leg up over Facebook and Google in the highly sought after youth demographic. While constantly assuring its users of privacy, Snapchat’s determination to provide customers with high ROI advertisements has led it to an estimated $50 million in revenue this year after just one year of ads. If Snapchat continues to show a deep understanding of its users, and improves its advertising products to help customers reach their desired audience, Snapchat can continue its rapid growth in its very competitive space and prove its $19 billion valuation.