Over the last 12 months, Snapchat has consistently made headlines for everything from its association with sexting to turning down a multi-billion dollar acquisition offer from Facebook, to the founder’s model girlfriend becoming a contestant on “The Bachelor.”
But all of those tongue-wagging headlines are simple symptoms of the app’s meteoric rise in popularity: Snapchat’s number of unique mobile users has about tripled to nearly 25 million over the past year.
Which is exactly why some of the most notable platforms, publishers and digital media investors are looking to duplicate Snapchat’s success with nearly identical messaging apps — even though, security risks aside, as of yet, there is no viable business model for the service.
Earlier this week, Yahoo acquired the team that built Blink, an app that, like Snapchat, destroys messages after they’re sent. Blink will be shut down and almost certainly replaced with a similar app under the Yahoo banner, which is what the platform did with news app Summly.
Entrepreneur Mark Cuban recently called upon app-development firm Mention Mobile to create his own ephemeral-messaging app called Cyber Dust. And Facebook continues to try to add features that will increase its users’ ability to message privately.
If imitation is the highest form of flattery, Snapchat must be tickled pink.
But why the popular app has drawn so many deep-pocketed admirers is still somewhat of a mystery. Not only have companies failed to successfully replicate Snapchat’s popularity, they’re entering an arena — ephemeral messaging — that has yet to provide a viable business model.
“Snapchat is very cool, but I doubt it will last very long as an independent company,” Fahad Khan, CEO at marketing technology firm One Public, told Digiday. “I don’t see how Snapchat will financially be viable on its own.”
Facebook, for instance, unsuccessfully tried to steal Snapchat’s thunder with Poke, a standalone app that allowed users to send messages that would be deleted after a certain period of time. Poke was officially shuttered last week after languishing in the app store for nearly a year. (Facebook also tried to acquire Snapchat last fall only to have its offer rebuffed.)
Facebook’s interest in such ephemeral-messaging features mirrors its newfound emphasis on de-bundling its various services into standalone apps and defending against newer, hipper platforms eating away at its user base. For Yahoo and Cyber Dust, however, how these apps will produce bottom-line results is less clear. (Neither Yahoo nor Mention Mobile, the company that created Cyber Dust, returned requests for comment.)
Zappos founder Tony Hsieh has questioned whether Snapchat could become a profitable business in a recent interview with Playboy. “I just wonder how they pay their bills and what their business model is,” he said. “I’m not saying they don’t have one. I just can’t imagine what it is.”
One Public’s Khan posited that Snapchat may not have a future as a consumer-facing product because its core feature — self-deleting messages — can easily be replicated by other companies. But he did say that Snapchat could be useful as a premium service for corporations sending sensitive information.
“The enterprise application of the concept will be more powerful,” he said. “In the enterprise context, ephemeral messaging will be an add-on or subscription service for off-the-record email. I don’t see [Snapchat] being able to make ton of money through ads.”
Jason Stein, president at social media agency Laundry Service, said Snapchat could also monetize with in-app purchases. That’s certainly been a successful strategy for mobile games, but Stein, too, believes that Snapchat and other standalone apps like are at risk of being co-opted by larger platforms.
“How well all of these apps can monetize is not entirely clear just yet, but it’ll be similar to other messaging apps. They can charge for the app, stickers and games, and distribution programs — as well as make deals directly with data providers,” Stein said. “The question remains: Are these standalone apps or features within bigger apps? Probably both.”
Image via 360b, Shutterstock
‘Not the future’: European publishers remain steadfast in blocking alternative IDs to third-party cookies
Some European publishers believe alternatives to the third-party cookies, probabilistic or deterministic, will do more harm than good to their ads businesses.
Media Briefing: Why Leaf Group spun off its media arm into a standalone company
World of Good's newly appointed CEO Lindsey Abramo spoke with Digiday about her plans to lean into experiential and embrace niche vs. scale.
Dentsu’s latest ad report shows slowed growth, driven mostly by inflation
The good news in Dentsu's ad forecast is that there's still growth. The bad news: most of the growth is the result of inflation, while real ad pricing actually dropped a bit.
SponsoredWhat the measurement and currency discussion really means to TV advertisers
Ali Mack, head of TV and agency, Experian Major streaming video providers have recently made headlines by adopting new currencies for ad measurement, threatening Nielsen’s long-standing TV ratings monopoly. NBCUniversal, for example, has certified iSpot and VideoAmp as currencies for advanced audiences and formed the Joint Industry Committee with Paramount, TelevisaUnivision and Warner Bros. Discovery. […]
How chef influencer Tue Nguyen works with the BuzzFeed Creator Network
BuzzFeed's Creator Network has been valuable from an audience and production education standpoint, but Nguyen still drives most of her business on her own.
Dentsu’s new Web3 readiness tool shines light on the tech’s potential to complement AI
Dentsu's Innovation Initiative is launching a web3 readiness index next month — at a time when the industry is obsessed with AI. Could the two technologies actually make a good pair?