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Snapchat’s Discover Feature: Video Ad Model Resembles TV

Snapchat s Discover Feature Video Ad Model Resembles TV Bloomberg Business

Snapchat s Discover Feature Video Ad Model Resembles TV Bloomberg Business


In November 2013, Snapchat Chief Executive Officer Evan Spiegel was widely mocked for rejecting a $3 billion buyout offer from Facebook. Snapchat had just completed a round of funding that valued it at half that, and it had no revenue. Although it has an obsessive young audience coveted by advertisers that now totals more than 100 million, the app’s main content is uniquely ephemeral, and the company says it doesn’t track user behavior in the ways most social networks do to sell ads. So even as Snapchat’s valuation rose to $10 billion in August 2014, the company remained largely quiet about how it planned to make money.

The Discover feature’s 11 channels, including those from CNN, ESPN, the Food Network, National Geographic, People, and Vice, alongside Comedy Central, produce their own videos and their own print stories. They also sell their own ads, giving Snapchat an undisclosed cut of the revenue. The collection of companies looks a lot like a basic cable package, except that it carries mostly short video clips. (Viewers can opt to watch full segments or shows.) Snapchat’s youthful audience helps the companies running Discover channels charge advertisers about $100 per 1,000 views, about twice the ad rates of YouTube and Hulu, say three people familiar with the app’s viewer data, who weren’t authorized to discuss the issue.

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I've been thinking about this all weekend...

...and I keep wondering why Facebook and Twitter aren't doing this too!

Or why Apple, Google, and Amazon aren't doing this too?

Is Snapchat's audience really that unique?

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