Snapchat, currently ranked 6th in the “Top Free” category in the Google Play Store, is one of the most popular mobile apps being used among teens and those in their 20’s. If you’re not familiar with it then here is the basic concept: users can take pictures or video, edit them with text, drawings, filters, or all three, and set the amount of time (up to 10 seconds) which the recipient is able to view the message before it disappears….for good (kinda…it can be saved to the phone). This defining feature provides users with a sense of excitement and mystery.
Nearly a year ago, the owner of Snapchat, Evan Spiegel, was approached by Facebook with an acquisition offer of $3 billion dollars, which Spiegel turned down. As of late it appears that may have been a smart move. Alibaba, the Chinese e-commerce giant, has been in talks with Snapchat and reports say have come to a valuation number of $10 billion for the app. Why is a company, who is less than four years old, valued so high when it hasn’t produced any revenue? That’s right; Snapchat has lifetime revenue of exactly $0. The initial reason one would put that much value into a company that hasn’t made a dollar yet is the large potential they see in it. This potential exists in the user list that is nearly 700 million and having the power to grant brands access to it on a digital marketing front.
How Does Snapchat Fit In to Digital Marketing?
While Snapchat is more of an amusement app at this time, it does have social media aspects that could reap benefits for brands i.e. lower cost of advertising production, real time advertising, and a straight-to-mobile user base. However, there are currently “bots” with the sole purpose of sending snaps to random users that display a product or service and how you can reach them for those 10 seconds. The bots have lengthy names involving a seemingly random order of letters and numbers. This makes it easy for users to identify when they have received a snap that is an advertisement, which typically turns users away from opening it. To combat this roadblock, brands could create a legitimate Snapchat account in which they provide engaging content that comes from a known source. Now you’re probably thinking, “remembering the details of a 10 second ad could be challenging”, and I certainly agree. This is where the “My Story” feature of Snapchat comes in to save the day. “My Story” is a feature that users can choose to post their snaps to allowing them to be viewed numerous times from users over a 24 hour period.
I think that Alibaba will use Snapchat as a pay-to-use medium that other brands can conduct digital marketing through. It is also crucial that they allow the users to choose the brands they follow and not allowing brands to spam them at will. While brands may still be conjuring their strategy on Snapchat, they have time to figure it out as it doesn’t look like it’s going to disappear any time soon, at least not in the next 10 seconds.