1/ Someone asked me what I thought about IG Direct, the threat it posed to $SNAP in the short and long-term, and any other thoughts I had on IG and $FB vs Snap. Figure I'd do a thread:
2/ I think IG Direct will be FB’s “most used” Snapchat killer to date (Direct has ~375M MAUs whereas IG Stories has ~300M MAUs), but I don’t think it will actually kill $SNAP. It will definitely face user backlash similar to when $FB ripped Messenger out of FB app. See thread:
3/ With FB and Messenger, people thought it was completely unnecessary to have two apps, but they got used to it. Same thing as the Snapchat redesign. But it makes sense for FB/IG… will let them pack more into the Direct camera without weighing down core-IG.
4/ Read the early reviews for Direct here… most people see it as completely pointless. producthunt.com/posts/direct-b…
5/ Anecdotal evidence tells me there are not really a lot of people who head to IG to start conversations. Maybe “sliding into DM’s” is still a thing (I’m married and been with my now-wife for over four years), but I think you usually transition to something else, right?
6/ IG DM’s have always been huge though for sharing things from the feed, and there’s value in that, but I think ripping it out into its own app is going to piss a lot of people off, and people may refuse to download a new app to view their DM’s, which could mess up feed sharing
7/ The whole goal of camera-based communication is that from an advertising standpoint, it seems to be MUCH more monetizable than text-based. Who wants a “sponsored text” from a brand? Or worse yet, a “sponsored screen takeover” (see link)? techcrunch.com/2017/07/11/fac…
8/ Similar thoughts on the FB news feed too – it was built for serving text-based content on desktop. Its an outdated way to monetize on mobile (opinion). Facebook was lazy AF in adapting to mobile. “Native feed ads” are basically animated banner ads that we’ve had since the 90’s
9/ I think $ in messaging will come from 1) AR ads (aka camera ads) and 2) full screen video ads. Direct MAY challenge $SNAP in AR, but I don’t really see a challenge by $FB or IG in short, premium, made-for-mobile content (Watch is FB’s attempt to get into your TV, not mobile)
10/ For AR, $SNAP said on Q4 call that half the entire US population of 13-34 year olds plays with its AR lenses weekly. Snap also said in Q3 that 33% of users play with AR lenses per day, aka about ~59M users.
11/ Both those numbers equate to extremely high AR market share for $SNAP when compared to this Deloitte study estimating “tens of millions” of consumers will create AR content weekly in 2018 venturebeat.com/2017/12/11/del…
12/ And marketers also say Snap’s AR capabilities are leagues ahead of the competition businessinsider.com/marketers-say-… There’s there’s a reason that reddit.com/r/SnapLenses has 122k subscribers - People use AR on Snapchat.
13/ $SNAP essentially has a monopoly over camera-based advertising, in the sense that they have such a large supply of camera ad inventory, that they can continue to drive down CPM’s (ad prices) on camera-based ads to a point where it is too hard for others to compete and make $$
14/ They have already started this by rolling out abilities for brands to target AR lens ad campaigns, and the pricing on it is similar to other premium online video ads. As they start making $$, can start adjusting prices. marketingland.com/snapchat-rolls…
15/ FB is really the only one who can challenge Snap in this regard in the near term, so Direct is going to be important in terms of actually getting scale in camera usage. The in-app FB and IG cameras seem to not really getting used as much as they need, thus the new app.
16/ $FB doesn’t really have as much of an advantage as people think because the tech for “camera ads” doesn’t have many synergies with “native news feed ads” (other than ad targeting). Also hard to get users to use a camera a bunch (at a loss) when the news feeds so profitable.
17/ So sure, $FB has really good targeting. But $SNAP targeting is now nearly just as good. That’s where content comes in – Content is really important for targeting, because you basically build your targeting system based on the content users consume.
18/ Snap’s premium content strategy is the exact opposite of FB/IG/YT/TWTR’s free-for-all approaches. I tweeted about Snapchat’s content strategy a bit (see below), so I won’t go into it here, but
19/ Snap basically has a content/ad targeting approach that’s a hybrid of traditional TV (safe for brands and other advertisers) and the Internet (laser-focused micro-targeting at scale)
20/ I also think Bitmoji’s integration throughout Snapchat is really important and should not be overlooked. Similar to how Snapchat has achieved scale for “camera advertising”, they have also achieve scale for “emoji advertising”.
21/ Sure, some of Snap’s global DAU numbers aren’t that impressive… BUT, what really matters is North America and Europe. And Snapchat is nearly just as prominent as FB/IG in these markets. So for the next 3-5 years, that’s what really matters in terms of increasing ARPU.
22/ So in terms of Bitmoji, it’s basically all over the Snapchat app. And a good majority of people who use Snapchat regularly also have Bitmoji. I see Bitmoji as a pretty strategic asset to keep users within the Snapchat ecosystem.
this got so long that it was easier to just do a new tweet thread than keep responding to my posts on your tweet.
23/ I think internet advertising companies are basically modern day cable companies, so the IG vs Snapchat discussion ultimately ends up as something similar to NBC vs ABC or Viacom vs Discovery.
24/ So maybe an individual consumer prefers NBC over ABC, or vice versa, and watch one more often than the other. But they still have them both on their cable subscription. Same with IG vs SC. They may prefer one over the other, but 95% of Americans will have both on their phone.
25/ So it comes down to getting them to use the product more and more. Direct is definitely a good first attempt at a pure Snapchat clone, but Snapchat still has many more features that keep you in the Snapchat ecosystem
26/ Its AR developer ecosystem is much more evolved, Snaps Discover content is completely different than IG, and a good chunk of Snapchat users have bypassed their phones camera roll and saved nearly all their photo/videos saved to their Snapchat account via Memories
27/ There are definitely people who have, and will, leave SC for IG. There’s also a lot of people will prefer SC as well. Snapchat already has a US user base almost as large as IG, so it’s really about doing things that attract advertisers
28) Big brand advertisers have always preferred premium content (hence the power of the traditional TV networks), and Snap is, in my mind, the leader of short premium mobile content
29) So I think both Snap anc IG will co-exist for the short/medium term. The Snapchat app is pretty well positioned to evolve into whatever computing platform comes next, which is going to be camera-based, so I think it’s in a good spot
