Snapchat Continues to Refine Focus Ahead of IPO
Snapchat – or more operatively, parent company Snap Inc. – is moving at pace to refine itself ahead of an IPO, which is believed to be coming early in the new year. And while each of Snapchat’s tweaks and changes seem relatively small, they all form part of a wider shift in focus for the app, which could have significant impacts on how brands use it for marketing purposes.
Here’s a summary of some of the latest changes and stories around Snapchat, and what they might mean for the app’s future.
Bloomberg has reported that Snap Inc is working on international expansion, posting nearly 20 job openings in London, mostly focused on advertising. These are among the more than 150 vacancies on the Snap Inc website, with several positions also available in Paris, again mostly related to ad development.
International expansion is a logical progression for the company. As we reported recently, Facebook’s looking to restrict Snapchat’s growth in international markets by releasing new, Snapchat-like features in regions where Snapchat has yet to gain traction – Instagram Stories, for example, is performing well in Russia where Snapchat adoption is low. In doing so, Facebook could essentially freeze Snapchat out of these markets – even though they’re copying Snapchat’s functions, they’re releasing them in regions where people aren’t familiar with such tools, which may give them first-mover advantage, and give users fewer reasons to try out Snapchat when the company tries to expand.
(And worth noting, reports this week have indicated that Facebook’s experimenting with yet another Snapchat-style addition, this time looking to duplicate Snapchat’s Discover publisher platform within the Facebook News Feed)
In order to fully capitalize on their popularity, Snapchat needs to move now in order to limit the impacts of Facebook’s strategy, while international expansion will also enable them to improve their market position ahead of an IPO.
But while but more localized focus will have obvious benefits for Snapchat’s revenue, there are also some concerns with their current ad offerings, which have been exacerbated by a couple of recent changes.
Digiday has reported that some Snapchat Discover publishers have seen their viewership rates drop by up to a third since Snapchat’s recent change to the home screen layout which saw Discover content moved to the bottom of screen, giving more prominence to Stories from people you follow.
This change was bound to have an impact – the majority of Discover clicks reportedly come from the Stories screen, as opposed to from within the Discover tab itself, and with some 43% of Snapchat’s revenue currently coming via Discover content, the move seemed somewhat risky. These latest reports underline that concern – though in counter to this, Snapchat has said that since changing the positioning of the featured content on the stories page, the number of daily active Snapchatters on Discover has continued to grow.
It’s difficult to draw any informed conclusions from such reports without definitive stats from Snapchat on overall use, but it does underline the somewhat volatile relationship Snapchat has had with advertisers and publishing partners.
And what’s more, some Snapchat influencers have also raised concerns about their dealings with the company.
Recently, prominent Snapchat users Michael Platco and Shaun McBride – who have more than a million Snapchat followers between them – both had their accounts suspended for violating Snapchat’s rules on sponsored content.
Snapchat images by Michael Platco
And while Snapchat has strict regulations around such use, both creators were frustrated by the process, saying Snapchat wouldn’t engage with them or give them information on why, exactly, the suspensions had occurred.
They’ve since, reportedly, worked out their differences, but it’s another potential concern for the app moving forward, especially amidst increased competition from Facebook. There are other platforms influencers can use (many of which are far more welcoming), there are other ways they can make money from their content.
Snapchat’s tight control over their platform and how it’s used is well-known, and commendable in many respects. But alienating their key influencers could have flow-on effects if not handled correctly, and will be something they need to improve in future.
Live Stories No More
And a final Snapchat update which will likely have limited impact – though relevant to note nonetheless – the app earlier this week announced that they’re removing their Story Explorer feature.
Released exactly a year ago, Story Explorer was designed to provide more context on certain stories by enabling users to access different perspectives from other Snapchat users.[embedded content]
But Snapchat’s found that the addition has been problematic and had failed to deliver on what they would have hoped, and as such, it’s been dropped.
Part of this is likely because of Snapchat’s increased editorial approach to Live Stories – in Farhad Manjoo’s recent piece in The New York Times where he examined how Snapchat has, in his view, transformed the social media landscape, he made specific note of their efforts on editorial curation of this type during major events.
“For instance, this summer, while the rest of the media were engulfed by Hurricane Trump, Snapchat’s news team spent days following the devastating floods in Louisiana. That in itself was unusual, but Snap’s presentation was also groundbreaking: Rather than showing the overhead shots or anchor stand-ups that are conventional on TV news, Snapchat offered video from inside people’s houses, from shelters, from schools. It mixed the macrostory of an impending natural disaster and the government’s response to it with the microtragedies of personal loss, and even the lighter moments of humor and boredom in between.”
This is likely where Snapchat sees more benefit, and where the algorithm selected additions made by Story Explorer fell flat. While computers can provide context by showing related content, it requires a human touch to ensure that context adds depth, which is where Snapchat seems to be headed.
This change itself encapsulates the conundrum of Snapchat – their approach is different to other platforms, they’re intent on providing an enhanced user experience at all costs, even if it seems more difficult to scale, even if it means potentially cutting revenue potential. It’s an admirable approach, to be sure, but there must also be some concerns as to how being a publicly listed entity could reduce this and impact future changes in this regard.
But then again, perhaps Snapchat knows this – perhaps they’re refining the product now to shape it for future growth on their own terms before they cede some of that control to board members and shareholders. It’s hard to know, it’s hard to say where Snapchat will be and what it’ll become, but the market’s still running hot on the camera app, and the buzz around Spectacles will no doubt continue to push that higher for the immediate future.
In some ways, it seems a risk, but Evan Spiegel and Co they have shown time and time again that they know their audience, they understand their market and how to reach them. Given this, maybe all these little shifts are part of a larger plan to come out with something even bigger in the new year, ahead of the IPO.
Based on the available evidence and history, I wouldn’t be willing to bet against them. There’s likely much more to come from Snap Inc.
Watch this space.
This post was originally published on Social Media Today