The more I use Snapchat the more obvious the potential. The way the product has evolved reminds me of Facebook’s history. Facebook started simply as a profile page for Ivy League college students but due to strong execution and brilliant product decisions has grown into the current behemoth. Snapchat is on a similar path - the initial version was a simple ephemeral photo sharing app but the recent updates seem frequent and massively impactful.

Movie tickets within Snapchat

Earlier today I was messing around and spotted a movie trailer ad for Swiss Army Man that was followed by an option to swipe up to buy the movie tickets that felt native to Snapchat. I didn’t have to click to go to another app and it felt natural to just swipe to get to the next step. And this was a simple case of buying movie tickets. I can imagine this flow expanding to other scenarios that follow a powerful ad with an immediate transaction. This echoes WeChat - the powerhouse app in China that’s an unholy mix of a social network, a payments platform, and an app ecosystem. There’s no equivalent of WeChat outside of China and I suspect most think the replacement will look like a WeChat clone. Snapchat feels completely different yet has the potential to be more. WeChat’s foundation is a third party app ecosystem that’s built on top of text while Snapchat is almost entirely visual and asserts a high bar for third party experiences.

This is huge. Interacting with Snapchat is a joy, whether it’s taking photos, playing with the filters, checking our your friends’ stories, or watching the Discover videos and this is due to the masterful job they did with the interactions. They’re not immediately obvious but once discovered are intuitive and consistent across the variety of experiences. Want to go next? Just tap. Want to dig deeper? Swipe up. Want to go back? Swipe down. This is incredibly powerful. By learning these shortcuts Snapchat is able to offer a variety of adventures that users can easily engage with without taking up any additional screen space. This allows every experience Snapchat offers to take up the full screen which keeps us in the moment and makes it easy for us to keep going.

Snapchat is already taking the baby steps of becoming a platform by enabling external parties to build on top of Snapchat. The obvious case are the content producers Snapchat is partnering with but a more telling example is the way they’re approaching geofilters. Geofilters are created offline, are then uploaded to the Snapchat site, and after approval become accessible in the app. This is a foreshadowing of the Snapchat formula - build out a compelling in-app experience and then follow it up with tools for outsiders to craft their own.

The movie trailer ad can be extended to highlight products - a compelling video of a product that can then be followed up with an option to buy. This can extend into multi-touch - imagine being able to tap on different sections of the screen that drive different experiences. If I’m watching the Olympic trials I can tap on the different players to get some more information about each one or if I’m watching some NBA highlights I can tap on LeBron’s jersey or sneakers to get taken to the Snapchat-integrated Nike Store. And this is just scratching the surface - by focusing on new highly engaging user experiences and setting up the tools to create these compelling stories Snapchat can transition into an incredibly powerful platform.

Snapchat should have no problems monetizing. The advertising industry can be broken down into two major types - brand advertising and direct response. Brand advertising is the typical TV ad that’s focused on building awareness and selling a story and lifestyle. Direct response, on the other hand, is about getting the customer to “convert” and requires every dollar spent to back out into a measurable return. Think of Google Adwords - you search Google for a book, click the sponsored Amazon link, and then buy it - Amazon will then know how much you paid for the book as well as how much the click cost. Using this data they can then optimize their campaigns to maximize profit. Snapchat may be able to sit at that intersection. It’s the perfect platform for high quality brand videos that take up the full screen but can also drop down into transactions - think of my movie trailer/ticket experience earlier today. This will help them get closer to the holy grail of advertising by attributing purchases to brand advertising.

Snapchat is tiny compared to Facebook but major shifts in the tech world have never been direct. New platforms start at the fringes but keep growing until they supplant the incumbents. Google superseded Microsoft by becoming the entry point to the web. Facebook is supplanting Google by bypassing the open web and providing app experiences on every platform. How would Snapchat unseat Facebook? I don’t know but I’m sure Facebook’s watching.


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