Features

New Snapchat Features Could Pave the Way to Mobile Advertising

Written on
May 5, 2014 
Author
Richard L. Tso  |

ADOTAS – Rumors are circulating that company known for its disappearing texts, videos and photos will be looking to raise another round of funding in the coming months, as it preps to solidify its position in the millennials market. Snapchat raised a $50 million Series C round of venture funding late last year, a short time after declining multi-billion-dollar acquisition offers from Facebook.


Just last week, Snapchat made a calculated move into real-time over-the-top (OTT) video chat messaging, in attempt to steal market share away from Microsoft Skype’s video chat, Google Hangouts and Apple’s FaceTime. Since Snapchat’s offering is OTT, utilizing Internet and data connections rather than cellular minutes through standard calling plans, it offers a cheaper way for people to stay in visual contact with people around the globe.

“Until today, we felt that Snapchat was missing an important part of conversation: presence,” Snapchat said on its blog. “Building Snapchat has taught us a lot about what makes conversation special. When we first started working on an application for sharing disappearing pictures, we had no idea how much we would learn. . . We also learned that conversation feels better when it’s visual. So we decided to make sure that everytime you launch Snapchat we take you straight to the camera. It’s the fastest way to capture an share a moment on your smartphone.”

When two people in a chat are present, users can also share live video streams. Those streams can be one-sided or both users can choose to video chat. Once users take their fingers off the screen, their side of the video conversation is complete. The technology powering Snapchat’s video chat features reportedly came through acquiring real-time communications startup AddLive for an undisclosed amount, Business Insider reports.

Snapchat’s new features have sparked speculation as to how it will monetize its services. Founder Evan Siegel was quoted last week as saying, “In-app transactions will come first. We think we can build really cool stuff people want to pay for.”

However, Esha Shah, Manage of Mobile Strategy and Innovation at Fetch, (a leading global mobile advertising agency with clients such as eBay, Sony and Pepsi) thinks that this will inevitably lead to gathering more data from users to move into the hot mobile advertising market, which Facebook is leading the charge by opening its mobile ad network.

³The new Snapchat functionalities are proof that the company is moving away from being merely a social platform and into communications and messaging, similar to WhatsApp,”  said Shah. “Video chat functionality opens up a lot of doors for product innovation such as group chat on mobile or sharing digital multi-media via video. As Snapchat looks to monetize, in-app purchases will come first, as they continue to innovate and create services users will want to pay for. This is a trend that will continue to develop as major players within the messaging space start to develop a range of services that move beyond just communications, including social gaming integration, payment tools and utilities that integrate into a user¹s lifestyle. More user activity will create more user data, which can be monetized through targeted mobile advertising.”

Brands have already been tapping into Snapchat’s reach and loyal audience that skews towards the millennial demographic of teens ages 18-24, similar to that of Vine.

“New features also create new opportunities for brands to engage with their audience, and we have already seen Taco Bell and GrubHub show the way for marketers using Snapchat,” said Shah.” In mobile, traditional mass branding is no longer as effective, which is why companies are focusing on collecting data to show relevant ads to consumers. In the long run, Snapchat will be able to collect data on users, allowing for ad targeting, which has proven to be more effective and provide a higher ROI for brands.”

eCommerce brand Karmaloop has an edgy, music and fashion-infused vibe and has launched several campaigns that utilize Snapchat’s photo feature to communicate behind-the-scenes views into the company. Adweek reports that the company is exploring ways to leverage Snapchat’s video chat features to build brand engagement for teens and twentysomething audiences.

“When we use Snapchat to show them our office, they can see that our lifestyles are like theirs,” said Kate Welton, a digital specialist at Karmaloop. “They can see that we dress like them.”

Industry analysts already consider Snapchat a major player due to the fact that the company currently employs more than 70 people, facilitates over 700 million photo messages each day and has raised close to $120 million total. If the company does pursue another round of funding as speculated, it will quickly become a social messaging powerhouse that will give Facebook, Google and Microsoft a run for its money.






Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

Reader Comments.

This could either go really well or really poorly. Instagram and Pinterest are the gold standard for native ads through visuals/photos. So Snapchat can learn a lot from them. Same for Airpush. Airpush was out in front on bringing native ads to mobile before almost anyone else. With the right partnerships, Snapchat might do well. But they need to be careful.

Posted by Terry | 2:22 am on May 19, 2014.

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