How does SnapChat Make Money – Unicorn Economy Analysis
About SnapChat, Funders, Founder and Facts
SnapChat is an outrageously popular (especially with the teens) image and video sharing app that can add thousands of moods to your pictures, send them to your friends and make sure the image disappears automatically after a maximum time frame of 10 seconds.
SnapChat Founders : Evan Spiegel, Bobby Murphy, and Reggie Brown.
SnapChat Funding : Appx 120$ Million (Last known valuation of 11$ Billion). [Update: SnapChat raised appx 2$ Billion at a Valuation of 20$ Billion USD as of July 2016].
How does SnapChat Work
User Creates Content, shares, content disappears after slight lag post the receipt from sender.
This will be Interesting to Read: How does WhatsApp Earn Money
SnapKids (For kids under 13 – Sandbox where the kids safely use Image sharing feature).
Discover (For Brands and Magazines) – To share curated content, image and videos.
Roll / TimeLine : Your Image Roll of past 24 Hours images.
GeoFilters : Filters for images used by users along with their images to be sent to receiver.
In-Story Advertisement / Called Live : Advertiser can curate / create a story of their choice and then put up an interesting ad placement within the story watched by the user. These SnapChat stories are their prime source of revenue from larger brands after the sponsored filter revenue line. YouTube Business Model is a tough competitor here.
[Update: InstaGram launches “InstaGram Stories” inspired from SnapChat Live and will this be the final nail in SnapChat’s Coffin]
Read this for better clarity of: Social Network Business Model
How does SnapChat Make Money
Like all other social networks, SnapChat makes all of its money from Advertising and allowing paid ads as in betweeners in engaging content and using it’s user base’s eyeballs to make money.
How does SnapChat Make Money from ‘Discover’
Discover is a sort of follow tool withing SnapChat using which publishers (advertisers) can create curated content that their teen audiences want to view / read. At the time of publishing this post, SnapChat had 23-25 partners who were creating content for SnapChat’s audience.
These publishers must have paid a hefty amount to get onto the platform, if not, they may be paying huge money to SnapChat for putting up their video adverts in between content. The video playback rate on SnapChat is reaching the levels of facebook (Facebook plays highest number of inbetweener videos to viewers).
Business Model of SnapChat from ‘Story Telling’
Story telling I last read was being piloted (don’t know if this still exists) – Advertisers promote small video based advertisements.
How does SnapChat Make Money from ‘Geo Filters’
Businesses can create a cult following by spreading across their snaps (pretty similar to facebook pages but paid) and share it with a creative & quirky Filter (Overlay with a message). These are paid for by local business owners, brands etc.
How SnapChat Makes Money
For any Social Network, Chat or messaging apps the business model is pretty straight-forward that is not visible to the Naked Eye.
Wait for it… It is as simple as “Advertising“.
The more you are hooked on the Free Platform, the more money they will make from the publishers or the advertisers.
Advertisers are hungry for all sorts of Channels – Like TV, Print, Radio, OOH (Out of Home), In-App, Content Marketing, Email Marketing, SMS Marketing etc. etc.
So some one like a SnapChat if offers complete and end to end hooked up Kids / teens then people will pay a Bomb.
This was it! Pretty small for a company the size of 10 Billion USD. I personally don’t see any value ad in the product that they have built except when it’s in the hands of an advertising magnet like FaceBook or Google exactly similar to how the twitter business model is pretty much useless to any one except these two exactly like LinkedIn business model is in the hands of MicroSoft (Useless).
Disclaimer: The understanding of the How does SnapChat Make Money is of the Author’s himself, neither any investor, banker or VC (local or global) or qualified consultants or the company have confirmed or explained the same to the author and the descriptions, stats, facts and figures, if used, are either obtained through secondary web research or interrogation of relevant search professionals or other resources on the web. Please use your own discretion to use this info when required and by continuing to read, you agree to indemnify the author & Unicornomy from the entire liability arising out of using this info on your own.