To the untrained eye, Snap Inc—in a world of technology darlings—is synonymous with Facebook, Google and Twitter. The advertising and investment community perpetuates this association and creates unrealistic expectations for the platform, leaving Snap with an uphill battle for a rightful seat at the head of the table. However, a closer look reveals that Snap is in a league of its own and has the potential to disrupt a competitive set known by the likes of Amazon, Netflix and television broadcasters.
Snap continues to demonstrate unbridled confidence and product innovation that the Facebooks and Twitters, in hindsight, were nowhere near at this point in their growth.
Facebook launched as a social-media desktop site for college students. Eight years later at its IPO, on the cusp of exceeding 1 billion users, it remained a social-media desktop site, monetising through ads and expanding its community to anyone with a valid email address.
Google was incorporated as a search engine. Six years later at its IPO it remained a search engine, monetised via the advent of keyword advertising and the pay-per-click auction model. Similarly, at launch, IPO, and arguably today, Twitter remains a news and social networking site featuring 140 character messages.
In comparison, in just over five years Snap continues to reimagine itself, evolving from a private messaging app featuring disappearing photos with questionable utility, to a premium entertainment and video-advertising platform admired by brands and consumers alike.
The company has made massive strides in ad technology (third-party measurement, ads API, advanced targeting, research) placing it almost on par with established competitors. It has popularised vertical video. Its has partnered with premium publishers on Discover, launched a hardware product, and made a series of key acquisitions to introduce augmented reality to an entire generation.
Skeptics who identify Snap as another social-media company with its future success hinging on user growth, are missing the bigger picture. Snap is well-positioned to greatly influence and shape the burgeoning industries of AR and advanced television, for the following reasons:
1. Snap sees what others don’t
Snap is arguably the biggest AR company in the world. According to Citi Research, the AR industry is projected to be worth US$120 billion by 2020 and US$540 billion by 2025, with potential to disrupt major digital and mobile markets like e-commerce and even smartphone hardware. With geofilters, lenses and the recent acquisition of Cimagine, an AR startup which allows users to visualise products in real-world environments through their mobile device, Snap is positioning itself to be the lens through which users experience a better, more beautiful, augmented world.
That lens may include a future iteration of Spectacles, Snap’s brightly conlored sunglasses with a camera. Referred to as “just a toy” by Evan Spiegel, Spectacles solved a consumer problem of in-the-moment recording while allowing users to stay fully engaged with the world around them. By integrating their AR technology assets into Spectacles, the product could evolve into the must-have AR hardware for the mass market.
2. It's camera-ready for television
With the release of Spectacles also came Snap’s charge into circular video. This format allows users to watch content seamlessly in either portrait or landscape mode. Portrait is of course mobile-first, evangelised to the advertising community as vertical video by Snapchat, and now a priority for video creators, marketers, and media companies. The latter, landscape orientation, has the potential to transcend from user's phones to their televisions, creating an opportunity for Snap to own the living room and its share of a US$200+ billion TV ad industry. In true Snap fashion, the company is already exploring what it means to be a broadcast platform, working with more than 30 of the world's top entertainment brands (MTV, CNN, ESPN, Comedy Central), not to mention receiving a publicised strategic investment from NBC Universal.
Similar to the pre-IPO stories of Facebook, Google and Twitter—before being the “everything” store, Alexa, and being nominated for an Oscar—Amazon was an online bookstore at launch and IPO. Before Netflix became the streaming giant slated to develop 90 original shows in more than a dozen languages, at launch and IPO it was a DVD rental-by-mail business. Today, these companies battle for user attention and entertainment award accolades, on a quest to become the future of television.
If an online bookstore and DVD-rental outlet can morph into next-generation television power brokers, it’s exciting for everyone—inside the industry and out—to imagine what Snap will become next.
Jeremy Sigel is global director of partnerships and emerging media at Essence