Yesterday evening Snapchat chief executive Evan Spiegel sat onstage at Vanity Fair’s New Establishment Summit and made headlines with his statement that ads will be coming “soon,” and that they’ll be in the app’s Our Story feature.
He also added that they would not be targeted to users based on tastes, and from his description, they will not interrupt users’ one-on-one communications.
Now, this isn’t all that shocking. When Snapchat introduced Our Story back in June, it was pretty darn obvious that the feature would become an occasional billboard.
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The feature, a collection of curated snaps (photos and videos sent via Snapchat) from users attending a particular event, such as the Electric Daisy Carnival or a college football game, is just begging to have ads casually slip in there from event sponsors or other brands.
Though Spiegel didn’t say a whole lot, we can make a few guesses.
A cold beer ad at a music festival
Snapchat was pretty clever with this feature. It first introduced Stories back in October 2013, which lets users create short-term reels on the fly from their own snaps that they and their friends can view at anytime for 24 hours.
Then in June, it introduced Our Story, a crowdsourced version of the feature. With Our Story, users at a particular event Snapchat has chosen to create a Story around can submit their snaps to be added to the event’s reel. Snapchat’s team curates the submissions for quality.
As we pointed out in June, Our Story is prime ad space. It has an immense reach, which Spiegel values over Snapchat’s rivals’ approach, which target ads based on individual user data. So for example, if you’re at the Electric Daisy Carnival music festival and tune into its Story, you could see an ad from an energy drink company that’s sponsoring a booth or tent at the festival (“Come say ‘Hi!'”), or the official energy drink sponsor of the event (“Buy our drinks while you’re around”).
Yesterday, Spiegel also said that the ads would be opt-in. I’m imagining some sort of swiping gesture to skip an ad, or maybe a setting to opt in or out of the entire advertising stream, but who knows.
We also did some digging, and it looks like Snapchat is planning to have its ad sales team in New York City, not in its Los Angeles home base, according to Snapchat job listings. Moreover, it looks like Snapchat’s ads won’t be self-serve (Facebook-style) and will be brokered through ad agencies, according to the listings. The Wall Street Journal reported in August that the company is developing Snapchat Discovery, its future ad service, and has talked to marketers and media companies. With that said, I’d guess that the startup will also make deals with individual big brands, especially at the beginning as it ramps up.
Snapchat is under tremendous pressures to monetize. The company is now valued at $10 billion and continues to spark rumors of further investments. But as Spiegel said last night, “It’s all fake money still. We generally have the feeling there is a lot more work to do.”