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Is anyone else seeing these numbers? How are they pushing for such a high valuation with those kind of losses? I suspect that Snap is merely capitalizing on tr

Is anyone else seeing these numbers? How are they pushing for such a high valuation with those kind of losses? I suspect that Snap is merely capitalizing on traditional advertising metrics (engagement, CTR) which don't translate over on their app, and the advertisers just haven't caught on yet. People play with filters because they're funny/amusing, but those impressions don't convert into purchases in the same way other types of ads would. Earlier last year Snapchat temporarily featured X-Men filters exclusively ahead of the movie release - I interacted with those for the novelty (and mainly because they disabled all the other filters so there were no other options) but I did not see the movie. Again, I'm not sure if they follow something similar to a CPC model or what, but I bet it's expensive. If the advertisers decide it's ineffective their newfound revenue growth certainly won't be sustainable.

EnFinlay 10y ago
I would disagree about the value they are offering to advertisers. Offering a platform where targeted users actually engage with the ad is huge. I'm no advertiser, but that sounds kind of like the holy grail - the user is not only engaging with the ad, they are then sharing that ad + engagement with their friends.
- charlesdm 10y ago
  Is it worth $25bn? Seems like a (massive) stretch, but maybe. Can it still realistically increase in value from this point? Probably not.
  - EnFinlay 10y ago
    No idea what it's worth, I just disagree that their ads are less valuable than other types.
  - mdb333 10y ago
    agree this reeks of ca 2000 burstage... so you have a bunch of eyeballs you sell ads to. Big f'in deal, that's not a $25B business unless you can continue to scale 10x (profitably). The rest is simply tech-fad novelty junk. I'd still buy into the IPO and ride it up a bit though.
    - urs2102 10y ago
      Ride it up? You think it'll do a Facebook? Go up a bit and then tank immediately for a while?
- fullshark 10y ago
  Not only engaging with that ad, but you can literally observe them have fun / smile because of it.
joycey 10y ago
> To generate excitement for X-Men: Apocalypse, 20th Century Fox ran a Sponsored Lens campaign that let users turn themselves into the iconic characters in the upcoming movie. In one day, people spent a collective 56 years playing with the Sponsored Lenses, which also featured the mutants’ powers. They also incorporated the Sponsored Lens into Snaps they shared with their friends, which yielded over 298 million views for the campaign and greatly amplified awareness and anticipation for the movie. The campaign resulted in a 13 percentage point increase in brand awareness, 7x the mobile norm, as measured by Millward Brown. More importantly, the Sponsored Lens also drove a 25% lift in theater-watch intent, over 3x the mobile norm. Maybe the X-Men filters didn't get you to watch the film, but it certainly worked on others.
- JBlue42 10y ago
  >"drove a 25% lift in theater-watch intent" Intent is not action.
  - batiudrami 10y ago
    But it is a way to compare ad effectiveness across mediums so what is your point?
  - deleted 10y ago
    [deleted]
- puranjay 10y ago
  When it comes to movies, what Rotten Tomatoes has to say is usually more persuasive than a Snapchat lens
  - toomanybeersies 10y ago
    How many people actually care about Rotten Tomatoes ratings though? I know of plenty of movies that have terrible ratings from professional critics, but got great box office earnings and all my friends who watched it really enjoyed. There's also plenty of movies with great ratings that I disliked. Outside of your programmer/hacker/related friends, how many actually look at at the Rotten Tomatoes/Metacritic ratings before deciding to view a movie. I know I don't for theater movies. Take the new Jack Reacher movie, it has mediocre at best ratings, but I really enjoyed it (I must admit I watched it at the cinema for free, and had nothing better to do). I think that for the average person, exposure is a very effective method of advertising films.
dibstern 10y ago
You != everyone. As previously commented, their advertising, at least in some circumstances, is highly effective. The growth rate of revenue, how much more advertisers can spend on the platform before it's saturated, and how much Snap can jack up the price per metric, would also play a big role.
blakecallens 10y ago
This is the #1 myth of social media startups - that you can be in the red at this phase and easily turn it all around. People forget that Facebook was ~$50m in the black before they even took a series A.

EnFinlay 10y ago

I would disagree about the value they are offering to advertisers. Offering a platform where targeted users actually engage with the ad is huge. I'm no advertiser, but that sounds kind of like the holy grail - the user is not only engaging with the ad, they are then sharing that ad + engagement with their friends.

charlesdm 10y ago
Is it worth $25bn? Seems like a (massive) stretch, but maybe. Can it still realistically increase in value from this point? Probably not.
- EnFinlay 10y ago
  No idea what it's worth, I just disagree that their ads are less valuable than other types.
- mdb333 10y ago
  agree this reeks of ca 2000 burstage... so you have a bunch of eyeballs you sell ads to. Big f'in deal, that's not a $25B business unless you can continue to scale 10x (profitably). The rest is simply tech-fad novelty junk. I'd still buy into the IPO and ride it up a bit though.
  - urs2102 10y ago
    Ride it up? You think it'll do a Facebook? Go up a bit and then tank immediately for a while?
fullshark 10y ago
Not only engaging with that ad, but you can literally observe them have fun / smile because of it.

joycey 10y ago

> To generate excitement for X-Men: Apocalypse, 20th Century Fox ran a Sponsored Lens campaign that let users turn themselves into the iconic characters in the upcoming movie. In one day, people spent a collective 56 years playing with the Sponsored Lenses, which also featured the mutants’ powers. They also incorporated the Sponsored Lens into Snaps they shared with their friends, which yielded over 298 million views for the campaign and greatly amplified awareness and anticipation for the movie. The campaign resulted in a 13 percentage point increase in brand awareness, 7x the mobile norm, as measured by Millward Brown. More importantly, the Sponsored Lens also drove a 25% lift in theater-watch intent, over 3x the mobile norm. Maybe the X-Men filters didn't get you to watch the film, but it certainly worked on others.

JBlue42 10y ago
>"drove a 25% lift in theater-watch intent" Intent is not action.
- batiudrami 10y ago
  But it is a way to compare ad effectiveness across mediums so what is your point?
- deleted 10y ago
  [deleted]
puranjay 10y ago
When it comes to movies, what Rotten Tomatoes has to say is usually more persuasive than a Snapchat lens
- toomanybeersies 10y ago
  How many people actually care about Rotten Tomatoes ratings though? I know of plenty of movies that have terrible ratings from professional critics, but got great box office earnings and all my friends who watched it really enjoyed. There's also plenty of movies with great ratings that I disliked. Outside of your programmer/hacker/related friends, how many actually look at at the Rotten Tomatoes/Metacritic ratings before deciding to view a movie. I know I don't for theater movies. Take the new Jack Reacher movie, it has mediocre at best ratings, but I really enjoyed it (I must admit I watched it at the cinema for free, and had nothing better to do). I think that for the average person, exposure is a very effective method of advertising films.

dibstern 10y ago

You != everyone. As previously commented, their advertising, at least in some circumstances, is highly effective. The growth rate of revenue, how much more advertisers can spend on the platform before it's saturated, and how much Snap can jack up the price per metric, would also play a big role.

blakecallens 10y ago

This is the #1 myth of social media startups - that you can be in the red at this phase and easily turn it all around. People forget that Facebook was ~$50m in the black before they even took a series A.