Two weeks ago, Adweek reported that Snapchat was asking major retail brands for $750,000 a day for its new ads. While Snapchat only began to run ads late last year, they have support from major brands, including the likes of McDonald’s, Samsung, Macy’s, and Electronic Arts.
On the surface, three quarters of a million dollars may seem like a lot money for a single day of advertising, but when you’re first-to-market and have a direct line to teenagers, there’s definitely an argument to be made. Snapchat CEO Evan Spiegel certainly believes so, as he’s raising funds at a $10 billion valuation.
Funding aside, it’s fascinating to watch as Snapchat continues to monetize their app, and compete with established social media players for user’s precious screen minutes.
But it doesn’t stop at social media.
Yesterday, Snapchat announced the launch of ‘Discover’ – their first step into the digital media market. As per their blog post:
“Snapchat Discover is a new way to explore Stories from different editorial teams. It’s the result of collaboration with world-class leaders in media to build a storytelling format that puts the narrative first. This is not social media.”
As you can see, ‘Discover’ features content from the likes of CNN, MTV, Cosmopolitan, Daily Mail, Bleacher Report, Food Network, National Geographic, People, Vice, Fusion, and Yahoo! News. Unfortunately, Spiegel was unable to land Spotify or Vevo, despite Snapchat’s leaked aspirations in the digital music industry.
According to Digiday, brands have permission to negotiate advertising deals within their respective media sections. Discover ads are believed to cost approximately $0.15 per view, with media companies retaining 70% of ad revenue for deals they forge themselves.
From a content perspective, it’s interesting to see how these prominent media outlets are designing their content – which is refreshed every 24 hours. Options appear to include animated GIFs, static imagery, video, and text. For the record, MTV is one media outlet that has done an excellent job of catering their content to the younger demo. Lots of great colour, animation, and click-bait content (sorry, but people need to know how Kim Kardashian’s Super Bowl ad for T-Mobile is shaping up!); but I anxiously await reports to see how each outlet performs, respectively.
Upon playing around with the app, my feeling is that ‘Discover’ is equal parts innovative and complementary. The feature is off to the side and does not in any way interfere with the core user experience that users have become accustomed to. Further, there aren’t any calls to action that urge users to share – which, ultimately drive users onto other social networks; clearly dictating that ‘Discover’ is first and foremost an impression play.
To quote Snapchat’s blog post:
“Social media companies tell us what to read based on what’s most recent or most popular. We see it differently. We count on editors and artists, not clicks and shares, to determine what’s important.”
This is clearly a jab at Facebook, which is famous for their News Feed algorithm. But the core reasoning behind these algorithms is ultimately to ensure that their network allows users to be truly “in-the-moment.”
Snapchat made an update recently that allowed users to tune in to Live Events. Facebook altered its News Feed algorithm to favor news-related articles and introduced trending topics to better compete with Twitter. Twitter launched native video capabilities so that its users can provide better first-person coverage of events and compete with YouTube. And LinkedIn brought the Pulse founders into the fold to help foster discussions surrounding currents news and information.
Despite all these enhancements to make relevant news more accessible, it’s fantastic to see a (once) underdog mobile app take potentially groundbreaking measures to alter the digital media landscape.
Don’t get me wrong. I’m not saying ‘Discover’ will be a guaranteed success story. Who knows? The aforementioned media outlets may not continue to develop high-quality native content…
But if it takes off (and can prove to be profitable for media outlets), I firmly believe we’ll be hearing discussion of an evaluation well north of $10 billion.
Have you played around with ‘Discover’ yet? What’s your take?
— Mansfield Inc. (@MansfieldInc) January 29, 2015
As many of you know, Mansfield Inc. will be joining the @get_proof family. We are very excited and look forward to making moves with Proof. To stay in touch, please follow @get_proof, as of January 11 this Twitter account will be deactivated pic.twitter.com/gbyO…