February 16, 2017 MediaStruction


Bargain Snap
Snapchat sets its IPO at about $20 billion,translating to $14-$16/share, which was actually a bit below expectations. As comparison, Facebook’s IPO set its valuation, at the time, at $104 billion. While Snapchat ad growth was exponential from 2015 to 2016 ($59 million to $400 million) it’s still essentially burning money, with over $500 million annually in losses. As you may recall, Facebook attempted to buy Snapchat awhile back at $2 billion, but was rebuffed. Facebook and Instagram have since then adopted copycat features, with moderate success. Snapchat calls itself a “camera” company, having initially raised consumer adoption by creating cool editing features to add to photos, the famous rabbit ears, for example. Our small focus group of Millennials uses Snapchat as much as an instant messaging service, checking in with friends via funny images. My high school sons think of Snapchat as a flirting platform, because, apparently sending a young woman a disappearing picture of yourself in rabbit ears means you’re interested.  While user growth stalled last year when Instagram launched “Stories,” one might argue the time spent with Snapchat has room for growth, which is a win for advertisers.
Pirates of the Internet
You may have been reading about fraud in the digital ad space. Let’s recap, shall we? We have fake news sites, amplified on social media meant to foment social division. We have fake websites, which are essentially blank pages, but which to ad servers are disguised as award-winning news sites, and, thus, hijack ad income from the real award-winning news sites. We have bots creating fake traffic to real sites in order to increase ad value on the real sites. We have ad blockers, pretending to be a useful service to consumers, but leveraging those consumers as hostages for ransom to publishers, like Google, who rely on advertising to consumers. We have legitimate publishers, like Facebook, inflating consumer engagement, necessitating Facebook agreeing to an independent audit last week. We have secret back-room deals between demand-serving platforms and large media companies. Last week Bing published its “bad ads” report and blocked thousands of advertisers, over 100 million ads. The digital ecosystem is like the Pirates of the Caribbean. Only online. And worse.
News Brands: Change or Starve
OK, so speaking of legitimate news, some might argue “the news” is in crisis. TV news, dependent on ratings, has in many ways become entertainment. Coverage on CNN and Fox News uses the same language as sports analysts, with emphasis on competitive strategy and knocking the other team. This week “Wired” published an interesting read on the New York Times, as the Times claws its way into the future, redefining the core value proposition of a news brand. Wired reveals an interesting take on the business of ad-dependent news, which now includes contributions from writers, designers, engineers, data scientists and product managers. Perhaps it’s no wonder the head of the uber innovative MIT Media Lab sits on the board of The New York Times. One of the innovations I found most interesting? The virtual reality app with 360 degree video viewing. The app’s film “Fight For Falluja,” allows viewers to embed with the Iraqi army, via 360 degree view, as Iraqi soldiers battle to retake the city from ISIS. You can find the mobile app by searching “NYT VR.”
Helpful Hints: Google Maps
Couple helpful tips here on using Google Maps to increase offline business.

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