Snapchat as a business model

Mar 5, 2016

Hi everyone!

Sharing a really interesting article on one of the newest kids on the block today – Snapchat. The following article touches on its history and background as well as its various revenue sources. For brevity’s sake, I’ve provided the link here instead of the lengthy article.

http://www.bloomberg.com/features/2016-how-snapchat-built-a-business/

The below is an infographic outlining the social media platforms’ various activities. While many might denounce it as a flash-in-the-pan phenomenom, it does not take away from the fact that Snapchat’s most recent valuation put it at a hefty $16 billion. With current demand for slots in its “Discover” tab rising exponentially, advertising on the platform is expensive and only reserved for major players, for now. It’s seen as exciting and fun and able to provide instant gratification; even veterans of the advertising industry are clamoring to learn how to harness the power behind this more-or-less unexpectedly successful social media tool, in the wake of its explosive popularity.

Do feel free to share any thoughts on this! Perhaps the most pertinent question to me at this point would be: will the profitability of Snapchat as a PR and marketing tool be sustained in the long term or is it simply going to be a fad among the millennials once it’s been milked for what it’s worth?

One response to “Snapchat as a business model”

KyuJin SHIM

March 23, 2016 at 9:37 pm

Thank you, Julia, for sharing this. My high interest is the snapchat, especially regarding whether or not they would be able to have a long run. Snapchat has built a solid foothold in the US market but as yet has not fully matured, nor even penetrated the Asian market. This is mainly because the content- exchange mode differs significantly across cultures and ages. Example: Asians prefer text-based communication rather than voice- or video-using communication. Probably this is due partly to traits of avoiding self-disclosure and self-revealing ques. As a ramification, in Asian countries, SMS shows a much bigger volume than does voice-calling. Contrarily, Americans prefer voice-calling or voice-messaging rather than texting.

In Youtube, where we tend to see many reaction videos, most of those feature non-Asians. At the same time, however, Asians prefer to upload text-based reviews, with hidden identities or hidden visual ques about themselves. They are uncomfortable about exposing their faces randomly in public.
Also, as I scroll through Snapchat story feed, the tone and manner of the contents is extremely (i.e., from my own perspective) casual, hilarious and immediate … these characteristics hardly fit the older generation’s shared values of deep thinking and insight, much effort made into content, etc.

So, what is my overall impression? Well, Snapchat already has sustained a new cultural norm for young adults and teens more freely self-expressing and digitally-conversing via immediate video. This chimes well with Instagram selfie-fever where young adults easily can and do express and share their lifestyle visually. So it would not disappear suddenly as a short-run and frivolous fad. Plus, important, and as you mentioned in the posting, it is 100% clear that Snapchat is a money-maker! This is the fundamental survival tool for a social media platform. Nonetheless, I still wonder whether or not – in the Asian market – it successfully could penetrate new generations.

My intriguing but complex question then is: are young generations in Singapore (like you guys), and in other countries – China, Japan, Korea – different in terms of their digital behaviors? If so, how will they respond to Snapchat fever? Will their response to Vlog also differ from that of their digital ancestors?

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