How Snapchat Built a Business by Confusing Olds
bloomberg.comFor the non-believers of Snapchat, here is where I think its value lies:
For the past 50 years brand strategy has largely been (fairly) well characterised. Conventional wisdom in the industry did well enough for brands like McDonald's and Coca Cola to expand across the world and capture generations of customers. This is in part due to an incremental pace of innovation in how customers have consumed media in this time period.
Then came along the internet and a bringing a huge stepwise change, driving not only unprecedented levels of fragmentation/segmentation/individualisation of users but also changing how we interact with and consume media.
The generation of "millennials" and "digital natives" are people who now spend more time on the internet than in front of a TV.
Facebook, with their 1Bn+ daily active users who are known to spend nearly 18 hours a week on the Facebook mobile app, saw the value in Snapchat - younger users don't have a Facebook account. It's uncool, it's creepy with its privacy policies. Snapchat has extremely strong market share on viewership for a generation of users that are arguably the most impressionable/valuable. This same generation don't really watch TV. Considering individual brands would spend hundreds of millions on TV, if Snapchat can capture even a fraction of this media budget, they'll be hugely profitable.
NB I chose McDonald's and Coke as brands as they are two good examples of previously invincible global brands that are now showing significant decline. They also had huge media budgets. For the purposes of my argument, I've chosen to ignore other market trends such as growing health awareness but my point still stands.
>> I chose McDonald's and Coke as brands as they are two good examples of previously invincible global brands that are now showing significant decline.
Not sure about Coke but McDonald's is doing pretty well these days. Its stock recently hit an all-time high and is one of the best performers this year, following their success with all-day breakfast.
Coke is doing just fine. I travel a LOT and I would say Coke is the preferred brand in probably 85% of the hotels and restaurants I visit. I still bring along a 12-pack of Mt. Dew because so many places only have Coke products and its frustrating to have to drink flat fountain coke.
Not to mention Coke's portfolio is far broader than fizzy drinks - bottled water, juice, and energy drinks [0].
Coca-Cola Amatil in Australia has even started making beer and cider [1]
[0] https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands [1] http://ausfoodnews.com.au/2014/01/13/coca-cola-amatil-launch...
Soda is insanely bad for you, why do you drink so much of it that you're lugging around 12-packs with you?
I'm genuinely curious, no judgement.
Soda's reputation is insanely bad. I still have multiple family members in their 80s and 90s who drink it regularly. I also have elderly relatives who smoke, but their health is pretty much wreaked whereas the soda drinkers seem pretty much okay given their age.
Similarly the very most productive software engineer I've ever worked with practically lived off of diet coke, just as John Carmack did while doing amazing things at Id. Similarly, plenty of olympic athletes drink soda, including one who was a second degree connection of mine in high school and who later won multiple gold medals.
None of this means soda is healthy, but if it were "insanely bad for you", then it simply wouldn't be possible people to consume it heavily and still be top performers or live into their 90s with decent health.
I don't very much at all.
Most of the time, I'm gone for two week stretches. 12 cans over 14 days isn't that much at all. I usually limit myself to a can a day.
>here is where I think its value lies:
I don't think the users (whatever their age) of Snapchat find value because of the advertisers; that seems to reverse cause and effect.
He's referring to the value to shareholders, not to users. It's already apparent to everyone that there's value for users - there's an enormous number of them spending a ton of time in the app.
Is there any real evidence that these kids don't watch any tv and only do snapchat and watch makeup gurus on YouTube? I know it's fun to say but I mean what about reality? ....
Evidence in our house, yes. The TV delivery industry shot their feet off in this area because they have a pricing model where they want to charge per "screen" (we use Echostar, but I believe the other providers have similar pricing). They also insist (or did until yesterday) that the data gets to the screen by coax. My two kids have tv screens in their bedrooms but I was not interested in paying an extra fee to have the signal delivered to them, nor was I keen to crawl around under the floor pulling coax (they have perfectly fine GigE connections already). They could in theory watch TV on a screen in the family room but they'd need to fight someone else for control of the set top box (and get out of bed). The result is they spend all day watching YouTube and Snapchatting on their phones. The TVs are only used for Netflix.
OK, but you know what they say about anecdotes, right? I'm sure there are many people on HN that have never watched a show in their entire life; there is an Onion article about "Area Man Constantly Telling People He doesn't Own a TV" [1]. Also, there is a group of people in America I understand called the Amish. That's fine but I'm not sure how to generalize from that .... My response is to this kind of often repeated idea that I think lacks a lot of merit or evidence in reality. For that view to be true, there better be a statistically insignificant number of kids that have ever seen any of these shows or any of their associated advertisments because they are too busy with Snapchat.
One thing I am aware of is that kids have a lot of free time and they do a lot of different things, is what I understand.
1. http://www.theonion.com/article/area-man-constantly-mentioni...
This appears to be the wrong link or doesn't really support the claim at all.
It says "usage is down for 18-34 year olds" so 18-34 year olds are not kids, not like 14 year olds. And saying it is down is very different from saying "kids don't watch TV, they use snapchat, therefore brands like Coca Cola are irrelevant."
This is what I'm saying. There is this unthinking, uncritical, and unskeptical self-congratulatory sort of "ding dong the witch is dead" about anything related to "traditional media" and the reason for this is "because Internet" or something like that. But, I think it is a very naive view and is fun to say but it's not actually real.
I mean, this article is an example of just weak evidence. Again, it is not about kids but its about the 18-34 demographic. But let's see, it says:
"In 2011, 21.7 million young adults tuned in to their TV sets. By the end of last month, that figure had fallen to 17.8 million, according to Nielsen figures."
OK, whatever that means, let's just accept the numbers as they are presented. Just elementary math tells us 17/21 is hardly nothing or "no one is watching" anymore.
Now, the article cited, to support this claim, says:
"In the era of smartphones and Netflix, it’s no surprise that traditional TV is losing relevance for younger viewers."
Wait ... so instead of watching actual TV sets with bunny ears, they are watching things like Netflix (which I understand is much different than Snapchat) .... OK, let's peruse the content of Netflix .... OK, wait a minute, all this content on Netflix looks familiar ....
Do you mean to tell me all this stuff on Netflix, Hulu, and Amazon are mostly .... from the TV? With the exception of a handful of originals, which honestly are produced in a similar way as the TV, most of this stuff coming from the evil "dead witch," the TV. I don't find a lot of "Vine Comps" on Netflix. Also, on some level it seems silly to me to point to Netflix and Amazon as evidence that these other things are dead; it's not like Amazon Originals are like "The-New-Internet-Meme.com" they are much more like "In addition HBO, Showtime, Starz and Cinemax there Amazon and Netflix" than some totally fundamental shift in the kind of content consumed ... whether it is over bunny ears or choppy wifi is sort of an implementation detail to some extent than a cultural revolution.
If one wants to say "People don't watch TV anymore" and then what they really mean is "They watch ABC shows on the ABC App on the iPad instead" .... Then claims like the "The Coca Cola brand is dead because Snapchat" seem to lose their luster.
I hate to "disrupt" the groupthink. :)
Sure. I apologize.
these kids don't watch any tv
I assumed that you'd be able to extrapolate the behavior of the 18-34 year olds to younger people, and I assumed that you didn't mean any literally.
Of "youth" (13-24 year olds)[1]:
96% watch online video ("Youtube and similar, social media") for an average of 11.3 hours per week.
71% watch online subscription services (Netflix etc) for an average of 10.8 hours a week
57% watch free online TV services (amctv.com, ABC app etc), average of 6.4 hours a week
81% watch scheduled TV, average 8.3 hours a week
56% watch catchup or recorded TV, average of 7.5 hours a week.
Additionally, "The five most influential figures among Americans ages 13-18 are all YouTube creators"[2]
I'm not sure if this supports or doesn't support your arguments. I know I sure don't agree with the claim "The Coca Cola brand is dead because Snapchat". I didn't really understand the argument there at all.
[1] http://sandbox.break.com/acumen/Acumen%20Constant%20Content_...
[2] http://variety.com/2014/digital/news/survey-youtube-stars-mo...
seems like advertising will always be ingrained to our culture, no matter how fast the technology is changing
The best part about snapchat, vs sms/mms is when someone doesn't respond it just goes away. So when you message each other later it's not hanging there as a reminder building silent resentments.
"Hey did you see my.........hey where did you go?"
case in point: everyone here comparing IM with TV or Facebook. at least say telephone in you analogy.
what is 'olds'? old people? Why would any business grow by confusing them?
Compared with Twitter or Facebook, Snapchat can seem almost aggressively user-unfriendly. If you’re new to the app and looking for posts by your kid, your boyfriend, or DJ Khaled, good luck. It’s hard to find somebody without knowing his or her screen name. This is by design. “We’ve made it very hard for parents to embarrass their children,” Spiegel said at a conference in January. “It’s much more for sharing personal moments than it is about this public display.”
It sounds like part of the claim is that the app/platform is intentionally a little clunky and unintuitive so as to prevent an influx of the older generation a la Facebook.
I think. I'm not between 14 and 24 so I don't know the first thing about Snapchat.
This part of the claim doesn't hold up. The first thing that happens when you sign up is it will show you the username of everyone with a phone number in your contact list, including your embarrassed kids, and let you start following them right away.
It's only useful if their "Who can view my story" setting is "Everyone". If it's set to "My Friends" you must send a friend request and they must accept it. There's also "Custom" so you can specifically block cooldad1969 or pick a subset of friends. Similar deal for "Who can send me snaps" — settings are "Everyone" or "My Friends".
edit: I guess this is a good example — without deep familiarity with the app you could assume they don't post to their Story if it's empty, or could believe that snaps received in the message view (not the main list) were recently taken (those have been sent from the camera roll)
"Olds" is a coy term by "millennials" who wanted the older generations who invented and keep using the term to get a taste of their own medicine.
As far as keeping out "olds", look at what Tinder did by demanding a premium from 30+ users: http://abcnews.go.com/Technology/tinder-charging-people-30-t....
"Olds" is a coy term by "millennials" who wanted the older generations who invented and keep using the term to get a taste of their own medicine.
No. It comes from Autoadmit/Xoxohth, which is like Hacker News for East Coast lawyers in "biglaw" (although I doubt that most XO posters actually made biglaw). In the mid-2000s, it developed a robust troll culture and people brought back the archaic (Dickens Era) usage, "poors". This led into the nouning of other adjectives to describe people in a derogatory way: in addition to poors, fats, dumbs, olds.
Most of us, in the early days, were relatively normal people with trolling habits. We weren't actually assholes; we were just pretending to be "prestigious" shitheads on the Internet. However, the gray-hat trolls eventually left when some actual assholes (black hat trolls) started getting in the game.
It's a stupid usage and I'm rather disgusted that people would use it without irony. Using "poors" and "fats" and "olds", unless you're making fun of the American upper class, doesn't make you hip and it certainly doesn't make you "prestigious". It makes you an idiot with subpar grammar.
I don't think Tinder wants to keep out 30-year olds. In fact they want to monetise them as they know they have more available income and are more willing to spend it in a dating service.
And perhaps most hilariously, there's almost no actual way to prevent people from lying about their age on the internet.
Are we supposed to find it pejorative? It just sounds clunky.
Older generations are quite familiar with being labeled as a group. Signed, Boomers and Gen Xers.
Presumably young people would rather use a service that doesn't have any boring old people on it. (As to why young people rather than old ones - the value of young people to advertisers is well known.)
Because brand preferences are locked in by the mid 20s, or at least many major brand managers think that.
I think it's far more likely that Snapchat is a very shallow experience. It's common sense that adults wouldn't be the target market. Adults generally prefer richer interactions.
I think you may be unfamiliar with Snapchat because Snapchat has some of the richest of interactions of any messaging or social network. You're literally communicating to your friends with videos and photos. The only thing that could be better than that is being in person. For some users, they're sending Snaps to dozens of friends every day, that they wouldn't otherwise talk to.
It makes texting/email/fb feel so boring and almost formal. I feel comfortable Snapping my friend I haven't talked to in a couple months something random, whereas I would be less likely to hit them up randomly on text.
Stories, the Snapchat broadcast medium, also let you feel more connected with your friends and loose connections. I don't need to talk to some friends every day, but it feels nice that I can share these silly, mundane experiences with them.
This is a much richer experience than browsing my friends' highly curated photos on their Instagram, their boring/activist/humblebrag FB statuses, or their pure text tweets.
Thank you; this is the comment I was looking for. Someone who uses and appreciates Snapchat and can explain to an outsider what the value is. Am I wrong in saying that you like that it feels more authentic?
I think you are going to need to define what you mean by "richer experience" there.
There are plenty of examples of how younger people develop their own complex (rich) social norms and behaviors which confuse the fuck out of "olds".
The (now outdated) behavior of "deleting" (ie deactivating) your Facebook account every night and reactivating every morning (so you couldn't get tagged and embarrassed) is a great example that confused most older people.
Adults generally prefer richer interactions.
Any in-depth references that support this? (Strikes me as curious, as I watch my 6-year-old playing a fairly elaborate Minecraft map…)
Maybe I should caveat with "richer social interactions". I also did not claim that users of snap chat were not intelligent or did not enjoy rich experiences. Simply that those who use snap chat enjoy the shallowness of it.
Here is an interesting article that was posted on HN -
http://www.buzzfeed.com/benrosen/how-to-snapchat-like-the-te...
Doesn't this prove the opposite of your claim? Look how much richer their use is than say the interactions on HN!
Mighty fine view from that high horse of yours.
Are you seriously doubting the premise that people mature as they get older? Biology bestowed the high horse here.
I don't mean this as dismissively as it may sound, but it seems possible you'll figure this out in a personal sense over the coming years.
Maturity does not imply richer social interaction. I can make a good argument for the opposite: as one matures one stops caring as much.
Well, it's an argument. I certainly don't know to call it good, and it doesn't match my experiences in any way. Perhaps you have access to a hidden cache of deep teens that I, as an old, wouldn't understand.
To me "richer" implies more complex, with more subtle features - not "deeper" in any intellectual sense.
As an older person, I really find it difficult to care if a particular friend didn't like an Instagram pic I posted. I really don't care how quickly they liked it and I don't even know which of my Facebook friends don't follow me on Instagram. They are all social interactions that add complexity and richness to the experience, and I don't pay attention to any of them.
To me richer means conversations and experiences. I love a good discussion about technology, politics, brewing, and many other subjects. Or just about life in general.
I also like experiences such as a good hike, bike, camping trip, eating out, etc...
Sending a friend a pic or even interacting on facebook doesn't really do much to further the friendship.
> Are you seriously doubting the premise that people mature as they get older?
I do. Biologically? Maybe. Mentally? I doubt it a lot. I know lots of people of all ages who use Facebook for the most vapid, shallow, and empty experiences. Socially or not.
> Adults generally prefer richer interactions.
I suppose that's why TV is now the province of the 50+ set.
https://www.washingtonpost.com/news/business/wp/2014/09/05/t...
There's a website called AutoAdmit (or Xoxohth) that was big in the 2000s where a lot of the more educated trolls congregated. Adjectives were "nouned" for derogatory use: poors, olds, fats, and dumbs. (OK, we didn't invent "the poors". We just revived that horrible phrase because part of the trolling was pretending to be rich and "prestigious" and generally trying to be the biggest asshole on the Internet. Unfortunately, some people took it too far and became assholes in real life.)
Never did I (now an "old") think that I'd see that kind of shit, used without irony, in the mainstream press. It's a stupid usage. I'd be offended if I cared, but mostly I find people who use it to be uneducated and silly.
For those who are unaware, Xoxohth/AutoAdmit is like Hacker News for lawyers, but with passive-aggression replaced by active aggression, and with the racism more overt. I wouldn't go there. It's ugly and a big waste of time.
I guess the new way for a company to make money is to be fiercely disinterested in anyone who might ever have any? :)
Anyway, it seems like a great thing for making memes on worldstarhiphop but as far as having the kind of economic impact that companies like Coca Cola have .... well I guess it's fun for the valley community to think this way.
It doesn't. Snapchat doesn't confuse me in the slightest in spite of being an "old". I actually laugh at "youngs" because I can run rings around them on any tech they use.
Snapchat does what tweenage girls want. Because the girls are on it, the guys are on it.
Those girls age (hopefully before they), get pregnant, give birth to another set of tweenage girls and another "hip" service takes its place.
Cue Elton John singing "Circle of Life".
As for why a fat, old record producer cares: tweenage girls are the only demographic spending any discretionary money (from the wallets of the "olds", natch). Everybody else is tapped out or doesn't give a damn or both.
> old people? Why would any business grow by confusing them?
Eventually they die.
Does anyone have a link where one of the Snapchat founder admits they created the app to send photos of their penises to college girls?
no link. but it was when his Stanford frat house. same place where he start the app with the guy that coded the thing but then got outed, so probably a good indication of who leaked.
Thanks. I bet ^parent downvoted because it sounds like slander but I did read this on a few articles.. linked from HN IIRC.
http://techcrunch.com/2014/05/28/confirmed-snapchats-evan-sp...
Let's not forget that human sexuality plays a core component in business motivations and the environment in which this XX billion $ company was formed.