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How Snapchat is Missing Out on $1.5M in Revenue Each Day
- minimaxir 13y ago"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.
- gagaga 13y agoWhich apps are Snapchat replacements? Which ones have an existing userbase?
- Nicholas_C 13y agoInstagram. They have direct picture messaging that's very Snapchat like.
- gagaga 13y agoThey only share the same high-level concept. The execution and actual use-case is very different.
- deleted 13y ago[deleted]
- minimaxir 13y agoWhatsApp, Kik, Line, etc.
- johnrob 13y agoAre we sure the fill rate would be 100%? There isn't an infinite supply of ads waiting to be displayed.
- kosei 13y agoExactly. Many ad companies fill less than 10% of ads outside of the US. Possible that's accounted for in their $1.50 CPM, but they also may be estimating quite optimistically, considering Snapchat would add a huge amount of volume to any advertising company, especially a small one.
- shocks 13y agoWhy is everything bold?
- shocks 13y agoThis is a serious question. I find it hard to read. But thanks for the downvotes anyway.
- michaelochurch 13y agoFor 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?
- JacobAldridge 13y agoQuick - name the CEO and ethical position of your preferred gas company, toothpaste supplier, and shoe manufacturer? For the long term, and I don't know anything about Spiegel or Snapchat so I'm just taking your comment at face value, you are right about the negative impact a poor CEO can have. For a short-term hit to the brand, I would suggest most users neither know nor care. The impact of the CEO over time will come from within (loss of good staff, failure to respond to market shifts etc) not external branding - as long as he doesn't go shooting elephants.
- cocoflunchy 13y agoThis is not a very good argument... I don't think a significant portion of their user base knows about the identity of the CEO, nor do I think it has an impact on the quality of the app. There are real issues with the quality of the app though. Maybe I'd use Snapchat if it didn't force restart my phone every time I tried to load a message...
- rebel 13y agoAnd what percentage of Snapchat users do you think have any clue who that is? As an HN reader (so already a tiny minority) I still don't know who he is.
- adventured 13y agoThis 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.
- jevinskie 13y agoI, personally, won't sit through a 30 second TV ad to see a 10 second (at most!) video from a friend.
- beat 13y agoMonetizing 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.
- hullo 13y agoWell, they're not talking about leaving a million on the table, they're talking about leaving a million and a half on the table every single day ("if only they'd use our product!"). The figure they come up with is a half a billion dollars, which is a much larger number than you're giving credit to here.
- nostromo 13y agoAs a comparison, that's half of Twitter's current annual revenue.
- beat 13y agoAnd Twitter is unprofitable.
- mcintyre1994 13y agoApparently Snapchat's costs are incredibly low though. At the very least, their employee count is 2 digits, not 4.
- kosei 13y agoFrom 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.
- matznerd 13y agoI have ads in snapchat right now and it isn't very intrusive.
- Newky 13y agoWhat 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.
- uptown 13y agoI'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.
- sytelus 13y agoSilly 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.
- slig 13y agoIt's a mobile app that people, mostly teens, use to send pictures to friends. The user can choose how many seconds each picture will be viewable and after the timeout, it's gone.
- harryh 13y agoInstagram has 150 Million MAUs. The fact that you don't know anyone who uses it says a lot more about you than it does about them.
- zimbatm 13y agoBetter idea: allow users to pay to "keep" the snaps for a bit more longer.
- msprague 13y agoEven 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?