Snapchatâ€™s Discover Feature: Video Ad Model Resembles TV
J Thoendell stashed this in Tech
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 appâ€™s main content is uniquely ephemeral, and the company says it doesnâ€™t track user behavior in the ways most social networks do to sell ads. So even as Snapchatâ€™s valuation rose to $10 billion in August 2014, the company remained largely quiet about how it planned to make money.
The Discover featureâ€™s 11 channels, including those from CNN, ESPN, the Food Network,Â National Geographic,Â People, andÂ 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.) Snapchatâ€™s youthful audience helps the companies running Discover channels charge advertisers about $100Â per 1,000 views, about twice the ad rates of YouTube and Hulu, say three people familiar with the appâ€™s viewer data, who werenâ€™t authorized to discuss the issue.
Stashed in: Snapchat
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?