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Snap's fate was preordained because of the vice grip Google and Facebook have on online advertising. The only way to deal with market failures is aggressive ant

by IBM 9y ago

Snap's fate was preordained because of the vice grip Google and Facebook have on online advertising. The only way to deal with market failures is aggressive antitrust enforcement. The EU has begun and others are sniffing around [1][2]. Democrats are starting to relearn the politics of trust busting [3] and candidates are starting to run on antitrust platforms [4]. If you work at a startup and you don't want your opportunity to be foreclosed by monopolies, you should support them. [1] https://www.nytimes.com/2017/11/13/technology/missouri-google-investigation.html https://www.nytimes.com/2017/11/13/technology/missouri-googl... [2] https://www.reuters.com/article/us-israel-antitrust-internet/israels-anti-trust-regulator-to-look-at-internet-giants-idUSKBN1EX1AQ https://www.reuters.com/article/us-israel-antitrust-internet... [3] https://washingtonmonthly.com/magazine/novemberdecember-2017/the-democrats-confront-monopoly/ https://washingtonmonthly.com/magazine/novemberdecember-2017... [4] https://twitter.com/AustinFrerick/status/950149470863417347 https://twitter.com/AustinFrerick/status/950149470863417347

tyleraldrich 9y ago
Perhaps there isn't just a good way to weave advertising into an app originally designed to send ephemeral pictures to friends? It seems like that's the real reason Snaps fate was preordained, and has nothing to do with Google/FBs ad empire.
- IBM 9y ago
  I'd believe that if advertisers weren't shifting their budgets over to Instagram Stories at Snap's expense [1][2]. [1] http://markets.businessinsider.com/news/stocks/snap-stock-price-downgraded-ad-buyers-prefer-instagram-2018-1-1012475903 http://markets.businessinsider.com/news/stocks/snap-stock-pr... [2] https://digiday.com/marketing/scale-matters-advertisers-opting-instagram-snapchat/ https://digiday.com/marketing/scale-matters-advertisers-opti...
  - tyleraldrich 9y ago
    Instagram and Snapchat share exactly 1 feature ("Stories"), so I really don't see how this shows that Snapchat is failing due to Google/FB monopoly, and not due to the reason I listed above. Instagram is more analogous to Twitter, and I assume advertisements occur both within the "Stories" and the newsfeed - this seems much more favorable to advertisers and is something advertisers are more used to.
    - IBM 9y ago
      When Facebook can graft Snap features onto every endpoint of their network, there's no oxygen left for Snap. They cannot get scale, and that's what you need in advertising.
      - replicatorblog 9y ago
        They got scale, particularly among the younger demographic where the product was wildly popular. They never cracked an advertising model that worked. I buy that it's harder for startups to break into social today, but that's true of most industries as they consolidate, I don't know that it means they're a monopoly. Slack is a social networking tool that has managed to grow and scale by focusing on different use cases and by using a different business model. If Snap had figured out how to get to profitability, or even focused more on reaching out to older users they may have found themselves in a different situation.
      - rgbrenner 9y ago
        180m daily active users is not scale? When Facebook IPOd, they had 160m monthly active users, and had $3.7B in revenue with $1B in profits. And yet with more users, Snapchat pulls in $200m in revenue last quarter, and lost $440m. The users are there. That's not their problem.
        skewart 9y ago
        The online advertising world has changed a lot since Facebook's IPO. 180m users and an awkward ad buying experience aren't as compelling as they used to be. Plus, it sounds like not all of those 180m Snapchat users are interacting with the part of Snapchat where they would see ads, so the audience is smaller. That said, I completely agree that a lack of users isn't preventing them from having a decent advertising business. It's just preventing them from doing it on the terms they want.
  - rgbrenner 9y ago
    And why do you think they are doing that? These customers are monitoring their ROI from these ads.. they know if they are effective. Do you really think any of these customers are saying to themselves: "Gee Snapchat ads are so effective and are making us so much money... we better stop it immediately."
- pbalau 9y ago
  You are right, Snapchat's failure to monetize their inventory has nothing to do with either Google or Facebook, simply because neither Google or Facebook has access to the Snapchat inventory to begin with. I believe advertisers are not jumping on Snapchat's inventory because the perception about said inventory: kids chatting with other kids and porn. Why would you advertise on that?
  - JAFTEM 9y ago
    > Why would you advertise on that A small percentage of companies are actively advertising on that. The featured stories (ads) on Snapchat almost always use sexual imagery to bait you into opening them. I agree, I don't think that's a sustainable model and it honestly shows how desperate Snap is to make revenue to allow these sort of ads.
  - enervate 9y ago
    porn in 10 seconds? thats gotta be the fastest hand in the west.
- tomc1985 9y ago
  Yeah, what the fuck do they need an entire floor of an office building to be blocked off for anyway? Do they think they run The Manhattan Project? I just can't wait to see what kind of life-changing innovation will surely result from this endeavor...
ariwilson 9y ago
Advertising is all about inventory and how you monetize it. Snapchat has the inventory but they don't seem to be succeeding yet at monetizing it within their current business model.
- prostoalex 9y ago
  The calls to action are nearly impossible within the current app context. Here are some random use cases that advertisers would pay money for: * A mobile install ad paying for a download * A mailing list or newsletter, acquiring e-mail addresses * An e-commerce shop selling goods or services, paying for sale or sign-up None of these scenarios work particularly well within Snapchat. Given the payment hurdles on mobile, I am guessing the e-commerce angle is a pain for most mobile apps.
prostoalex 9y ago
> Snap's fate was preordained because of the vice grip Google and Facebook have on online advertising. Facebook has started selling ads in 2011 (previous years were covered by Microsoft deal http://www.nytimes.com/2007/10/25/technology/24cnd-facebook.html http://www.nytimes.com/2007/10/25/technology/24cnd-facebook.... ) and had to face the grip that Google/DoubleClick, AOL and Yahoo! had on online advertising. Google AdWords started selling ads in 2000, facing the grip of AOL, Yahoo! and DoubleClick. How did those platforms gain prominence without aggressive antitrust enforcement?

by IBM 9y ago

tyleraldrich 9y ago

Perhaps there isn't just a good way to weave advertising into an app originally designed to send ephemeral pictures to friends? It seems like that's the real reason Snaps fate was preordained, and has nothing to do with Google/FBs ad empire.

IBM 9y ago
I'd believe that if advertisers weren't shifting their budgets over to Instagram Stories at Snap's expense [1][2]. [1] http://markets.businessinsider.com/news/stocks/snap-stock-price-downgraded-ad-buyers-prefer-instagram-2018-1-1012475903 http://markets.businessinsider.com/news/stocks/snap-stock-pr... [2] https://digiday.com/marketing/scale-matters-advertisers-opting-instagram-snapchat/ https://digiday.com/marketing/scale-matters-advertisers-opti...
- tyleraldrich 9y ago
  Instagram and Snapchat share exactly 1 feature ("Stories"), so I really don't see how this shows that Snapchat is failing due to Google/FB monopoly, and not due to the reason I listed above. Instagram is more analogous to Twitter, and I assume advertisements occur both within the "Stories" and the newsfeed - this seems much more favorable to advertisers and is something advertisers are more used to.
  - IBM 9y ago
    When Facebook can graft Snap features onto every endpoint of their network, there's no oxygen left for Snap. They cannot get scale, and that's what you need in advertising.
    - replicatorblog 9y ago
      They got scale, particularly among the younger demographic where the product was wildly popular. They never cracked an advertising model that worked. I buy that it's harder for startups to break into social today, but that's true of most industries as they consolidate, I don't know that it means they're a monopoly. Slack is a social networking tool that has managed to grow and scale by focusing on different use cases and by using a different business model. If Snap had figured out how to get to profitability, or even focused more on reaching out to older users they may have found themselves in a different situation.
    - rgbrenner 9y ago
      180m daily active users is not scale? When Facebook IPOd, they had 160m monthly active users, and had $3.7B in revenue with $1B in profits. And yet with more users, Snapchat pulls in $200m in revenue last quarter, and lost $440m. The users are there. That's not their problem.
      - skewart 9y ago
        The online advertising world has changed a lot since Facebook's IPO. 180m users and an awkward ad buying experience aren't as compelling as they used to be. Plus, it sounds like not all of those 180m Snapchat users are interacting with the part of Snapchat where they would see ads, so the audience is smaller. That said, I completely agree that a lack of users isn't preventing them from having a decent advertising business. It's just preventing them from doing it on the terms they want.
- rgbrenner 9y ago
  And why do you think they are doing that? These customers are monitoring their ROI from these ads.. they know if they are effective. Do you really think any of these customers are saying to themselves: "Gee Snapchat ads are so effective and are making us so much money... we better stop it immediately."
pbalau 9y ago
You are right, Snapchat's failure to monetize their inventory has nothing to do with either Google or Facebook, simply because neither Google or Facebook has access to the Snapchat inventory to begin with. I believe advertisers are not jumping on Snapchat's inventory because the perception about said inventory: kids chatting with other kids and porn. Why would you advertise on that?
- JAFTEM 9y ago
  > Why would you advertise on that A small percentage of companies are actively advertising on that. The featured stories (ads) on Snapchat almost always use sexual imagery to bait you into opening them. I agree, I don't think that's a sustainable model and it honestly shows how desperate Snap is to make revenue to allow these sort of ads.
- enervate 9y ago
  porn in 10 seconds? thats gotta be the fastest hand in the west.
tomc1985 9y ago
Yeah, what the fuck do they need an entire floor of an office building to be blocked off for anyway? Do they think they run The Manhattan Project? I just can't wait to see what kind of life-changing innovation will surely result from this endeavor...

ariwilson 9y ago

Advertising is all about inventory and how you monetize it. Snapchat has the inventory but they don't seem to be succeeding yet at monetizing it within their current business model.

prostoalex 9y ago
The calls to action are nearly impossible within the current app context. Here are some random use cases that advertisers would pay money for: * A mobile install ad paying for a download * A mailing list or newsletter, acquiring e-mail addresses * An e-commerce shop selling goods or services, paying for sale or sign-up None of these scenarios work particularly well within Snapchat. Given the payment hurdles on mobile, I am guessing the e-commerce angle is a pain for most mobile apps.

prostoalex 9y ago

> Snap's fate was preordained because of the vice grip Google and Facebook have on online advertising. Facebook has started selling ads in 2011 (previous years were covered by Microsoft deal http://www.nytimes.com/2007/10/25/technology/24cnd-facebook.html http://www.nytimes.com/2007/10/25/technology/24cnd-facebook.... ) and had to face the grip that Google/DoubleClick, AOL and Yahoo! had on online advertising. Google AdWords started selling ads in 2000, facing the grip of AOL, Yahoo! and DoubleClick. How did those platforms gain prominence without aggressive antitrust enforcement?