What Snapchat's IPO Tells Us About Social Media Advertisement

Snapchat

Snap Inc. Sneaks in at $24 Per Share

As a company known for keeping things a secret, many investors are beginning to wonder how the IPO for the company will impact its 'secret-keeping' along with the advertising avenues throughout the platform. The brand identified itself as a “Camera Company” instead of a social media platform when it rebranded back in 2016 from Snapchat to Snap Inc.

The brand has already begun to market themselves with games, filters, geotags and more. We've listed out the different aspects of Snap Inc. and how the IPO could affect those items.

Gaming

Snapchat has pushed a gaming aspect to their platform through the different camera filters. We see advertisers beginning to use these as an interactive way to reach their potential clients. There haven’t been many games yet, mostly just Snapchat having fun with elves during Christmas. In the future, we could see brands such as Nintendo creating filter games for game releases.

Snap Advertising

The ever popular 10-second ads inside the platform hold a vast majority of the company’s revenue. In 2016 the company recorded that 98% of the revenue came from advertising alone. With a growing young, active user the concentration of millennial’s all in one place make for a perfect space for advertisers. Unfortunately, some of these ad prices aren’t obtainable for the smaller mom-and-pop shops across America. We weren’t able to find direct pricing for advertising from Snapchat (other than geofilters), but some websites quote the Sponsored Lenses costing anywhere from $450,000 to $700,000 during the Super Bowl.

No HQ

With a company surrounded by secrecy, it's not surprising that the IPO could lead Snap Inc. to purchase a primary Headquarters so investors can see that the brand is using their funds productively. Snap Inc. is currently located all across Venice, California with no particular location as its Headquarters. This company is perceived as a little scattered brained with no central location, thought process, or order.

Spectacle Sells

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Snapchat CEO Evan Spiegel
Snapchat CEO Evan Spiegel

Snapchat CEO Evan Spiegel[/caption]

The sunglasses that record and download Snaps through wifi while you enjoy your day have become a staple for the brand. Snap Inc's first attempt at encompassing their "Camera Company" outlook proved to be a successful launch leading them to begin selling the product through their website. The Spectacles are sold at $130 each with three different color options. CEO Evan Spiegel wanted to keep the glasses to land out of the hands of "geeks" and into the hands of the public. They were first released through "Snapbots" placed in random locations across the United States. The final location in NYC before it's "nap", while they move into a web-based selling platform. We're excited to see if this IPO will push Snap Inc. to produce more camera-based products. We've already heard talk of a Snap Drone and hope to see it in use soon.

The Future

We’re hopeful that the IPO of Snap Inc. will help the company begin to centralize its purpose and passion. As an investor, knowing and understanding where the money your investing is going is essential. For example, we know Disney is about giving families a fun experience and time. But where is money going for Snap Inc.? To build a Headquarters that we could visit? Or to lowering prices so smaller brands can utilize their advertising platforms? Whatever they decide to do, we just want more lenses of dogs.

If you have any ideas of how you see Snap Inc.'s IPO affecting their company and advertising, comment below, we love to hear your opinion! We love creating Snapchat filters here at Red Shark Digital, so if you’ve got an event coming up and want to show your spirit on Snapchat, be sure to reach out so we can design your filter!