Money. If Snapchat wants to win back the creators it has lost to Instagram and YouTube — and win over the ones it never won — it needs to offer them money. Duh. But will it be able to?
Last week Snapchat finally acknowledged what many have known for years. The company has ignored creators. “We have historically neglected the creator community on Snapchat that creates and distributes public Stories for the broader Snapchat audience,” said Evan Spiegel, CEO of Snapchat’s parent company, Snap during its earnings call last Tuesday.
Unceasingly ignored by Snapchat, top creators have increasingly abandoned its app. More than a dozen top creators have doubled the number of Stories they post to Instagram while cutting their Snapchat volume by 30%, according to Mediakix.
To make things rights, next year Snapchat will give creators a way to make money from the content they distribute on its app, he said. Snapchat executives understand that the question of whether creators will return is wrapped up in whether the app will offer enough incentive for them to return. With the exception of maybe Casey Neistat, creators aren’t impassioned about platforms. They’re impassioned about their audiences and getting paid to entertain them.
So how can Snapchat make its app worth creators’ content? Here are some options.
The YouTube Option
Snapchat can follow YouTube’s master blueprint by attaching ads to creators’ Stories and offering them a share of the revenue. Technically Snapchat already kind of does this. When people view a single Story on Snapchat, they are often shown an ad afterward. Snapchat could continue the practice and decide to only split the money if a viewer watches the entire post-roll ad. That could push creators to push their viewers to watch the ad, thereby boosting ads’ completion rates and Snapchat’s standing among attention-seeking advertisers. Problem is, following YouTube’s path means navigating its pitfalls. Snapchat has already faced its own mini “ad-pocalypse” and instituted ways to avoid slotting an ad after a nude snap. Would it be able to avoid another? And if not, would it be able to withstand the fallout?
The Old Facebook Option
Snapchat executives aren’t wild about a friend-based feed like Facebook’s. It would rather fill people’s content feeds by identifying what they are watching and giving them more, similar content. “What we found is that the best predictor of what people are interested in and want to watch is actually what they’re watching,” Spiegel said last week during the company’s earnings call. That sounds like Snapchat would take a Story that a person is watching and queue up similar Stories to follow it, likely inserting ads between those Stories and sharing the revenue from the ads that are viewed with the creators of the Stories that were watched. That also sounds exactly like Facebook’s Suggested Videos program that failed to take off and required the company to come up with another creator monetization scheme.
The New Facebook Option
Bookending creators’ content with ads can turn off viewers and tamp down revenue. So can interrupting that content with commercials, but maybe to a lesser degree. Facebook has wagered that people are more likely to sit through an ad if it appears when they are in the middle of watching something. It’s an inelegant solution but a potentially more lucrative option. Let people start watching someone’s Story, let the creator decide when to insert the ad so they can slot a cliffhanger snap before it and let the viewer decide if the ad’s worth sitting through. Again it’s not elegant. But unlike an unskippable pre-roll ad, it makes the viewer more aware of the content they would miss if they stop watching. And unlike a post-roll ad, there’s an incentive to keep watching. However Snapchat wouldn’t be able to avoid the central issue with affixing an ad to a piece of content: will it be able to ensure the brand buying the ad doesn’t mind being associated with that content?
The Instagram Option
Instagram has stolen plenty from Snapchat. Maybe it’s finally time for Snapchat to steal something back. The Facebook-owned app has been increasingly setting itself up to make a monetization play for creators. After years of looking the other way while creators cashed checks for pitching weird teas — which can bring in more money than a traditional ad-revenue share — Instagram has started to seed a branded-content program. To date it has only rolled out a tool for creators to flag when a brand paid for a post so they don’t catch a case from the Federal Trade Commission. But it’s also started to monitor creators’ posts for brand mentions. That monitoring program is positioned as a way to ensure creators use its branded-content tag, but it can also be a Trojan Horse for Instagram to clamp down on these promoted posts it doesn’t profit from. If Instagram can identify when a post is branded before it’s uploaded, it can block it from being uploaded unless the brand involved pays Instagram to also run it as an ad or to run it at all.
Snapchat could pull off something similar. Its sales team can find brands who want to reach the teens and twentysomethings who are more likely to be on Snapchat than anywhere else but who aren’t sure they can create ads that would appeal to this audience. Then it can play matchmaker, pairing those brands with creators to produce the branded snaps. Technically this is another YouTube route, especially after the FameBit acquisition, but the crucial piece would be the enforcement that Instagram seems poised to enact. By instituting its own branded-content program, Snapchat can make its app more accessible to brands and more attractive to creators. And by adopting a monitoring system, the company can protect its profits from that program.
The Snapchat Option
From the sound of things, it seems like Snapchat will go with the YouTube option or one of Facebook’s. A day after Snap’s earnings call, Business Insider reported that next month Snapchat will debut a redesigned app that silos friends’ chats and Stories to one side of the app and relegates Stories from public figures, such as creators, and others, such as Discover publishers, to the other side. “Snap will use algorithms to personalize the ‘endless’ feed of videos” from non-friends, according to the report.