IS SNAPCHAT FINALLY GETTING SERIOUS ABOUT MONETIZATION?
The new social media darling is overhyped and needs to start earning revenues. Forget about actually being profitable, but with a market cap of $24+ billion, the company has to earn more than just a few million in revenues.
Shane Wey, CEO at MightySignal, guesses that Snap might be getting ready for one or all of the following:
- Enable the purchase of spectacles in the app. Currently, the app moves the user to the web browser to complete the purchase of spectacles. Adding Paypal may address this short coming.
- Snapchat may just add the Paypal SDK for to optimize or reinforce something in the background. This is not unusual as developers often add and remove SDKs that do not affect the user experience. One possible improvement could be with Snapcash, which allows user to user payments and currently is powered by Square.
- Alternatively, is a new ad format in the works. Is Snapchat getting ready to allow advertisers to sell products directly to users in the app? This method could be similar to Pinterest’s buyable pins.
SNAPCHAT ADDING ECOMMERCE IS MOST INTRIGUING OF ALL OPTIONS
The last option is an eCommerce integration. This option could be the most exciting option of all as it could integrate advertising and eCommerce into one.
Just a few days ago we posted an article about Instagram adding Click to Messenger ads. If Snapchat is considering some click to buy advertising program, this could make the social media platform a new and exciting platform for eCommerce sellers.
SNAP ALSO ACQUIRED PLACED THIS WEEK
This week Snap acquired Placed, a company that tracks advertising. With this acquisition, Snap hopes to show that online ads drive offline sales.
Tracking of offline sales is becoming an important aspect for most online platforms as they attempt to gain more offline advertisers. Placed will continue to operate as an independent company offering its services to all integrated platforms.
SNAPCHAT’S FUTURE IS AT STAKE
Whatever Snap might be up to, another $2.2 billion loss (includes special items) is not acceptable to investors. With revenues of just about $150 million, it has a long way to go to make the service profitable.
Placed may solve a problem with advertising attribution, but selling ads is high priority. Q2 revenues must show improvement for investors to continue to see value in Snap.
At this point, there is no confirmation from Snapchat about the Paypal SDK integration. So all of this is speculation, but it is worth keeping an eye on Snapchat as it moves to monetize the social media platform.