Snapchat’s impending IPO is significant as it is the first photo-based business to become public. Unlike Instagram, who preferred the welcoming arms of Facebook along with its pocketbook and audience, Snap is looking for the stock market for validity and growth fuel. Part of it might be due to investors’ pressure to cash in (Snapchat funding is over $1,5 billion), worried that the app might just be a generational fad. Nevertheless, for the visual tech world, this is a first to keep an eye on.
Grown in popularity as the anti-memory photo app – 10 seconds and it’s gone- the Venice California-based company has yet to follow the rules in anything it does. With over 150 million daily active users, creating over 9,000 snaps a second, it has grown from a simple photo messaging app to a multi-level media company, where brands, publishers, and consumers mix and compete with ephemeral visual content.
From simple photos, the app quickly added stickers, videos, stories, adding longer narratives options, feeding the insatiable appetite for visuals of its largely female under 24 user base. Its popularity relies on three foundations : it’s mobile, it’s personal and it’s visual. Estimated to put the company at a value of $20 billion, far beyond the $3 billion Facebook once offered, its IPO, if successful, will only confirm what the marketplace has already known: Visual content rules.
The great talent of CEO Evan Spiegel is to understand and tap into this minefield. In particular, understanding how photos (and videos) are replacing text as a primary form of communication for a generation born with a camera and a screen in their pockets. Faster, more explicit, more emotionally charged than text, visuals more clearly conveys a message while respecting intimacy and authenticity. Text can be cold and distant, feel formal and detached. Photos breath personality. With filters and stickers, Snapchat adds the emoji factor, adding or emphasizing a message or feeling. It becomes even more personal.
And while most of Snapchat usage remains overwhelmingly one on one, ( text, photo or video sharing far exceeding stories, live or discover channel) the numbers are nothing to ignore. Cosmopolitan claims 3 million views a day, matching daily what its print magazine struggles to do in a month. Advertisers are convinced as well, expected to spend $337 million by year’s end , even if engagement numbers seem particularly low. The magic here is not the ROI on ad spending but rather the reach into a golden demographic that no one else can deliver at this scale.
Finally, Snapchat’s IPO is important as the company will define where photography is heading in the next 5 years. The generation that grows with Snapchat will expect from every other visual tech company to follow some of the procedure they are now familiar with. They will expect everyone to offer some variation of ephemeral, customizing ( stickers, geotags, filters), circle frames (Snapchat glasses) and messaging. They will expect publishers to offer dynamic visual content, consumable on the go. They will no longer accept that a photo is just a photo but rather the central foundation of a construction with many customizable parts.
Photo by rednuht
Author: Paul Melcher
Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.