Snapchat once struggled to convince advertisers to trust it; now it’s busy convincing users it can be trusted.
Its brand challenges aren’t unlike those faced by political candidates. It wants to maintain that raw appeal and edge that won it an audience and got it this far, but at the same time maneuver toward the more middle-of-the-road, risk-adverse center where the money is.
Marketers have been lining up since ads were introduced to the free app, even while the ephemeral messaging service faces eroding trust levels with users. And of course, if Snapchat loses its user base of millennials, those brand partners would disappear faster than those kids would if their parents crashed a Spring Break party.
And just like those kids, Snapchat has grown up fast. In 2012, just a year after its debut, the New York Times described its App Store page as having images “scantily clad women.” Three years later and its app page still features women, but instead of oozing sex appeal they’re frolicking with friends at the beach, taking zany selfies for pals back home. The message: We’re not “that sexting app” anymore.
Not to say it’s gone squeaky clean. As some college students under the account name SJSUYAK recently learned, Snapchat is still useful for chronicling debauchery—until it’s discovered and shut down.
Of course, Snapchat was never just a sexting app. Tweens used it to tell parents what they were doing. Hospital workers used it communicate about patients and circumvent HIPA disclosure laws. Others just wanted to share instead of preserve.
Popularity brought new features; most recently, Snapchat added low-light camera functions and best friend emojis, after alarming its youthful loyalists earlier this year by removing the ability to check out users’ best friends.
Its rapid popularity with teens has attracted heavyweight investors like Alibaba (to the tune of $200 million) and made its 24-year-old founder the world’s youngest billionaire and brought the app’s valuation to $15 billion. Yes, that’s $15,000,000,000.
No surprise, then, that Snapchat’s explosive growth has piqued advertiser interest, including after it even if its sexting reputation initially made it something of a hard sell.
— General Electric (@generalelectric) July 15, 2014
“Advertisers Wary of Snapchat” announced an Ad Age headline in 2013. Well, not for long.
The first names to sign on were small brands like frozen yogurt purveyor 16 Handles. And then, maybe because no amount of bad press seems to be able to harm it, Taco Bell signed on in May 2013. Blue chip GE joined in 2014 and McDonald’s tested it to promote its “I’m Lovin’ It” reboot among other campaigns.
Like YouTube, Instagram and Vine before it, Snapchat has created stars like Shonduras, who are now courted by brands.
More media brands including CNN, ESPN and VICE came on board after Snapchat introduced the “Discover” branded content format in January.
Of course, nothing is stopping any brand like Taco Bell from joining a social service like Snapchat and snapping away to its followers for free. And some brands simply use Snapchat as a social media engagement tool, while others are using it as a publishing platform. This is no different from Facebook or Twitter.
What brands will pay Snapchat for—reportedly as much as $750,000 a day for—is promotion to non-followers and, just as importantly, to be able to data mine Snapchat to target those users. And here is where Snapchat faces a big challenge.
Since 2013 when the FTC looked into complaints about Snapchat’s dodgy way of pretending to delete messages, the app has faced a trust problem. Indeed, what good is mining data that doesn’t exist? Snapchat and the FTC settled last year but the app remains in hot water with users who question whether the service is fulfilling its most basic brand promise.
To plug the holes, Snapchat brought in an ex-Google security expert to strengthen its system and it has banned third party apps. Last week it released its first transparency report to disclose government requests for user account information through Feb. 28, in a bid to reassure users that it’s protecting their privacy. It intends to release a biannual transparency report starting in July.
Yet Snapchat is just one major hack away from scaring off existing and future users. And where the base goes, the brands—and the money—usually follows.