PinkNews is betting big that Snapchat will be instrumental in driving additional revenue streams beyond advertising, starting with e-commerce.
The LGBT+ digital publisher has created a range of animated characters and memes for stories created exclusively in its Snapchat Discover editions. Many of these have caused viral spikes in its audience and engagement figures, said the publisher.
The publisher, which launched on Discover in July following seven months of content testing, attracted over 20 million unique users within two months, most of whom are new to the publisher’s content. Rather than solely reporting news it would publish on its website via the more visual-storytelling Snap formula, the publisher has created an original series of fictional storylines and animated characters that represent the LGBT+ community, and to help it stand out on the platform.
In some cases, these characters have been based loosely on existing fairy tale characters such as Hans Christian Anderson’s “The Little Mermaid” but where the merman is transgender, for example, or “Cinderella” where the main character is a boy who wants to be a girl and the fairy godmother is depicted as a drag queen. On other occasions, the stories are entirely original, with many of the editions incorporating shareable memes, which have caused major spikes in audience engagement.
Now the publisher is looking at how to extend the most popular memes and characters to other formats that can be monetized. First up: merchandise. “We’re creating IP in these characters created specifically for Discover, and there’s e-commerce and licensing potential in that,” said Benjamin Cohen, CEO and editor-in-chief of PinkNews.
One edition had a superhero theme, in which readers were asked what LGBT+ superhero they’d choose to be. It included a meme of a person with an ice cream head wearing sunglasses superimposed on top, saying “You’re my superhero.” The edition drove over 35 million views, and 4 million individuals used it, according to PinkNews.
There is a whole range of ways to extend those characters and memes to physical objects like with T-shirts, that can be sold via its website, said Cohen. “Snap is hugely important in helping us diversify our revenue streams,” added Cohen. “It was a significant proportion of what we earned last month [from platform distribution], and will be significant going forward.”
To date, PinkNews has been generating revenue from Snap via the self-serve programmatic capability, but in a few weeks’ time, it will start selling direct advertising deals to agencies. That comes with pros and cons, however. The benefits are that the publisher can ask for higher ad rates and expand to branded content work. Plus, agencies will be more likely to supply creative that’s been designed to run on Snap and relevant to LGBT+ communities if they have agreed to a direct deal, which isn’t the case with ads bought on the open marketplace. The downside is that PinkNews will have to cope with the often very lengthy payment windows used by agencies.
That means it will have to find other means to secure enough cash flow to maintain its fast-growth ambitions. The 13-year-old PinkNews hasn’t previously taken any venture-capitalist funding, but Cohen believes there’s more interest from VCs today. “The scale of the [VC] opportunity is opening up, partly because attitudes to LGBT+ are changing, it’s becoming way more mainstream. There is VC interest, and we hope to close something at the start of next year, which will ease cash flow,” added Cohen.
Currently, the revenue received via Snap’s self-serve tool has meant the publisher’s efforts are profitable on a monthly basis, though it is a few months off recouping the initial investment in the Discover team, said Cohen.
PinkNews also wants to create TV-like shows for Snap — an area the platform has been courting partners for in the U.S. The publisher has a couple of shows that have run on YouTube. Cohen sees an exclusive version of this kind of show as a solid starting point for a show on Snap.