Snapchat has tripled its video views since May and is now starting to nip at Facebook’s heels in video, seeing over six billion views daily (Facebook sees eight billion views per day, up from four billion in April). Snapchat doesn’t provide a breakdown of its video viewing figures, but in all likelihood most of the views are user-generated content (UGC). However, the platform is already looking to premium content via ‘Discover’ feature, which provides a curated feed from media partners like CNN, Daily Mail, Vice, ESPN and Snapchat’s own editorial team.
According to Recode, CPMs for the Discover platform can go as high as $100 CPM. The high demand is partly driven by novelty, but also by Snapchat’s ability to tap into hard-to-reach demographics.
More than 60 percent of 13- to 34 year-old smartphone owners in the US use the service, which is available only on mobile devices. That said, most video on Snapchat isn’t monetised, at least for now.
While in-stream video is represents the most scalable opportunity, branded content is another area where the platform could see success. Snapchat has been making some interesting moves in this area, such as its partnership with WPP and the Daily Mail to create Truffle Pig, a content marketing agency. In September, Truffle Pig President Paul Marcum explained to Digiday how the idea was to create branded content programmes that scale across platform and publisher. “There’s definitely a hybrid approach,” he said. “it’s not just social media, not just traditional publishing and not just content.”
However, in spite of Snapchat’s success, some still doubt the company’s long-term value, and it’s $16 billion valuation. This is partly due to the misconception that the Snapchat’s primary use is for teenagers to send pictures of their genitals to one another, and partly to the fact that the platform’s of teen users are notoriously transient.
Then many took issue with the cofounders’ decision to snub a $3 billion offer from Mark Zuckerberg at a time the company wasn’t generating any revenue. Snapchat CEO Evan Spiegel says ‘Why didn’t you sell?’ is the common question he’s asked. The deal would have netted him $750 million.
As things stand, there’s still no clear light at the end of the revenue tunnel for Snapchat, although now the platform is said to be on course to generate $100 million annually. While that number doesn’t match today’s valuation, six billion videos views per day is not to be sniffed at, especially for a platform whose video strategy is still very much in the early experimental stage.