“Oh look, I got a Snapchat! Cool, advertisements!” Said no one, ever.
International social media app phenomenon Snapchat Inc. is about to change things up a bit — and moreso than when they added the chat feature. The mobile app creators are privately discussing an expansion of services that are rumored to roll out sometime this November.
The app will now include videos, news, and the dreaded advertisements. The company clearly wants a piece of the Internet advertising profit. Back in 2000, the advertising industry generated an estimated $8.1 billion. In 2011, the revenue was up to $32 billion, while 2013 saw a $42 billion profit.
Snapchat is an app that allows users to send picture, video, or short text messages to other users that are automatically deleted within a matter of seconds. Now the social app experience will include Snapchat Discovery.
Mobile ad agencies and other media companies are in a vicious competition to see who can offer the mobile app the most investment funding for Snapchat Discovery. This new feature will allow users to access publications, video clips, and of course advertisements. As always, the way to view anything in the app requires the press and hold of a finger — the same function to view pictures and messages.
Nearly a dozen companies in the advertisement and media industry are interested in the upcoming service and are more than willing to provide their content. An estimated 23% of all mobile user’s time is currently spend on Facebook applications, yet Snapchat may be giving the social media giant a run for it’s money soon with Snapchat Discovery.
The well known picture-sharing app infamously turned down a $3 billion takeover offer from Facebook last November. Snapchat CEO Evan Spiegel stated that he was not interested in selling the company just yet and that the $3 billion offer was not the first offer Mark Zuckerberg’s company has made. Google’s own $4 billion offer was also rejected.
Spiegel was waiting for something a bit bigger and better, and that offer came from Alibaba Group Holding Ltd, which valued Snapchat at $10 billion. The investment is an attempt to increase the app’s awareness across the U.S.
If the investment succeeds, Snapchat is on it’s way to becoming the latest app start-up company to accept an 11-figure investment without having any means of generating profit (i.e. advertisements).
Unfortunately, this means that Snapchat’s users will be subject to advertisements in the near future, just as Facebook’s users see advertisements, Twitter users are exposed to Promoted Tweets, and Pinterest addicts are seeing Promoted Pins.
“Mobile advertising is an effective and relatively inexpensive way to reach an on-the-go audience,” says Carrie Tschetter, VP of Archer Communications. “And today’s media technologies make zeroing in on target audiences easier than ever.”
Snapchat Discovery will help mobile ad companies reach their target audience — the younger generation — even when the app’s users may not be consciously or actively looking to purchase those products or services.