The acquisition of Yahoo by Verizon closes the chapter on Yahoo’s pursuit to remain independent, and the future of the company and its subsidiary properties is unclear.
Three years after that acquisition by Yahoo, Tumblr’s valuation has been reduced by more than one-half of its original value. Reports have indicated that poor management choices and meshing of Yahoo’s ad sales team with Tumblr’s particularly hampered the platform’s monetization.
As Tumblr’s failure to monetize contributed to its decline, a new player has stolen the technology spotlight. Snapchat has been the darling of marketers in recent months thanks to the launch of its application-programming interface in June. “The rise of Snapchat,” Kyle Bunch, head of social at agency R/GA, told Mashable in June, has “forced Tumblr down the priority ladder” for brands.
While Snapchat’s API is an important step for the app, there is room for improvement to further facilitate ad buyers. One must be wary, though, that those changes do not compromise Snapchat’s uniqueness. Here are four ways that Snapchat can further expand its ad platform while retaining its identity.
Make sponsored geofilters usable for small and midsized businesses
Snapchat’s branded geofilters, the nifty, location-based selfie overlays that were opened to the public and businesses in February, currently sell for between $450,000 and $750,000 per day, according to The Verge. This price point may be attainable for major brands like Southwest Airlines and IHOP, both of which have already implemented their own geofilters, but it is out of reach for most SMBs.
It’s a shame, because marketers with a wide range of budgets can benefit from geofilters. A business as small as a café in Colorado can encourage more purchases with a sponsored geofilter. Broadening of these possibilities allows geofilters to scale for the long-term. Snapchat also doesn’t currently design its own geofilters for brands–more bad news for businesses that do not have the resources to hire savvy designers. Snapchat may want to consider developing an in-house design team to help brands with their geofilters, keeping further revenue potential in-house.
Beef up analytics
Snapchat’s API and ad exchange have greatly improved the ad buying experience, but their sophistication pales in comparison to that of major digital players Google, Facebook and Twitter. Currently, metrics to determine campaign return on investment on Snapchat are limited, so expanding them to meet competitive benchmarks will further convince marketers of the benefits of working with the app.
Refining the user verification process will also help in this regard. Currently, Snapchat only requests your name, email address and birthday to register. By asking additional, optional demographic questions, Snapchat can better measure the app’s user base and communicate them to marketers. Within reason, the more information Snapchat can glean from its users, the better.
Leverage photo recognition
Snapchat filed for a patent earlier this month for a technology that serves ads based on objects recognized in photos. This is a brilliant move by the company, as it has great potential to grow the platform’s advertising options. For example, if you take many selfies by your Apple laptop, Snapchat can serve you deals on the latest Apple products. A coffee fiend Snapping their mug each morning can receive ads for coffee machine replacement parts in a pinch. This news indicates that Snapchat is asking the right questions on its road to monetization.
Integrate with the open web
Right now, Snapchat is isolated from the rest of the web. This seclusion has served Snapchat well so far and even represents part of its appeal, but it poses a problem to businesses for which advertising depends on driving consumers to websites. This particularly affects nonprofits and e-commerce sites, as their advertisements often intend to prompt audiences to donate or purchase. Snapchat already allows publishers to link to the app from Facebook and Twitter, but outgoing links from within the app is a key next step. However, Snapchat should make sure not to turn Snapchat.com into an extension of the app. That move could brand the app as “just another social network.”
Snapchat provides a distinct service that is both exciting and challenging to marketers’ notions of ads on platforms. While this is a great thing, there’s much more potential for Snapchat to meet advertising needs. By doing these four things, Snapchat can avoid the mistakes of Tumblr before them and create a mutually beneficial alliance with brands while also keeping what users love intact.
Patrick Kirby is vice president of accounts and sales at video advertising company GlassView.