Last Wednesday, Evan Spiegel announced details about the upcoming design overhaul of Snapchat.
Last Wednesday, Snap announced details about the upcoming design overhaul of its flagship app, Snapchat. Snap has claimed that users are at the heart of this redesign, but it also represents an effort to exert greater control over advertising on the platform. As the changes are rolled out, some groups are likely to benefit more than others.
The most significant change is that content which Snap deems ‘media’ will now be separated from content deemed ‘social’. This division already existed for Snapchat’s professional media partners, whose content was listed on the currently less popular Discover page, but now it will encompass all influencers, publishers and celebrities, who till now had were listed among a user’s friends.
Below we outline the different parties and what each of them stand to gain or lose.
To some users, the app might to feel too different. For certain content, users will now need to swipe right instead of left. Even so, for those who use the app regularly, even a small change in habit can be unpopular, especially if the reward isn’t considered great enough.
On Twitter, reactions to the update have so far been predominantly negative, with comments suggesting it looks bad, and is cluttered and confusing.
Another of the changes is more likely to be well-received by users.
Snapchat will join Facebook, Twitter and Instagram in an algorithmically-managed, infinitely-scrollable feed. This is intended to make it easy to find more relevant content, and, if the changes are a success, users should spend more time on the app.
While many of the best-performing technology stocks saw significant declines throughout last week - including a significant 4% drop for Facebook and 4.76% drop for Twitter – Snap saw a tentative rise of 0.66%. This may reflect confidence in the new update, and hopes for an expanded user base who will spend more time on the app.
The update represents a tacit effort to direct more traffic as through SnapAds, the company’s own advertising department. The changed status of influencers, publishers and celebrities should bring much more traffic to the Discover page, where adverts are more regular and predominantly controlled by SnapAds.
However, if the changes don’t find widespread appeal among users and – perhaps more importantly – influencers, then this could signal bad news for Snap. Though there are many differences between Snapchat and Vine, the latter’s decline in 2016 may be attributed partly to its poor treatment of content creators. So too, Snapchat’s fate depends on keeping its influencers on the platform.
Since influencers no longer have the same identity as friends, their advantage as providers of an intimate, engaging platform for advertising may not be as strong as it was before the update. It is now easier for Snap to intersperse influencer content with Snap’s own advertisements, and some influencers may feel that this limits their ability to monetise their large audiences.
The changes are likely to impact smaller influencers more than larger ones. This is because smaller influencers are unlikely to appear high up on the Discover page, on which promotion depends on a mixture of algorithmic and human vetting. Whereas influencer viewing rates remained consistent before the update, most influencers should now expect a considerable amount of variance in viewing figures, depending on how their content performs on the Discover page.
By contrast, for top tier influencers, the changes may bring additional exposure beyond their personal following, because the algorithm is likely to place their content far higher up on Discover.
Snap’s Media Partners
Until now, Snapchat’s professional media partners enjoyed a monopoly over the Discover page. With the changes, they will now have to compete for views with a much larger amount of content. Of course, if that means more users and more traffic to the Discover page, then Snap’s media partners could well benefit from increased impressions. But it’s possible that professional content will lose out to celebrities and influencers, who dominate the attention of the mostly Generation Z user base.
Even though Snapchat's update puts friends on a separate page and brands on a different page, Snapchat announced that Snap Ads will continue to make an appearance in the Friend's Page.
Finally, the effect these changes have on advertising companies will depend on how well they react. Snapchat holds sway over an important share of internet users. Statistics published in November by the analytics company App Annie found that millions of users can be reached only on Snapchat: in the UK, 35% of Snapchat’s daily users in the UK cannot be reached by Facebook, 41% by Instagram, 64% by YouTube, 50% by Messenger, and 78% by Twitter. If the update is a success, it is likely to increase Snapchat’s hold over the elusive Generation Z demographic.
But, ultimately, if user numbers increase that will be good news for advertisers.
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