Commentary

Snapchat Sees Dollar Signs In New 'Partners' Program

Snapchat is finally ready to make some real money.

Following months of preparation with ad-tech companies and agencies, the social darling is rolling out Snapchat Partners -- an API that virtually guarantees the proliferation of ads across its messaging platform.

Offering a mix of ad technology and creative services, launch partners include 4C, Adaptly, Amobee, Big Spaceship, Brand Networks, SocialCode, The 88, Truffle Pig, TubeMogul, Unified, and VaynerMedia.

Needless to say, these partners are delighted to be gaining direct access to Snapchat’s more than 100 million daily users -- more than two-thirds of whom create content every day.

“We are thrilled to … begin developing technology and strategies that will help [brands] create Snap Ads,” said SocialCode CEO Laura O’Shaughnessy.

By “Snap Ads,” O’Shaughnessy is referring to Snapchat's vertical-video format, 3V. Soon to be officially rebranded as Snap Ads, the unit requires users to swipe upward to install a promoted app, watch a longer video, visit a mobile site, or read a formatted article.

SocialCode and Snapchat’s other partners understand that API inventory will be sold through an automated and auction-based system. For the time being, at least, Snapchat will inspect every ad before users ever see them.

And, with the help of tech partners and creative advisors, brands will soon have even more ad options on Snapchat. 

Perhaps more disruptive to users’ experience, the company will soon offer Snap Ads between Stories. Yes, users will face ads whenever they auto-advance between friends’ Stories.

Snapchat is sitting on a goldmine.

This year alone, the network will grow its domestic user base by 27.2%, according to a recent forecast from eMarketer. That should far exceed the average growth rate of 16% for all mobile messaging services.

If accurate, that will bring Snapchat’s domestic user base to 58.6 million by the end of the year -- exceeding Twitter’s 56.8 million U.S. users, and Pinterest’s 54.6 million users. (Stateside, Facebook Messenger should maintain a comfortable lead with 105.2 million users.)

By 2020, meanwhile, Snapchat is on track to add 26.9 million users -- or about double that of Twitter and Pinterest.

What’s Snapchat’s secret?

It’s fun, according to eMarketer principal analyst Cathy Boyle. “In a world in which there is an app for nearly everything, Snapchat has cut through the clutter by injecting fun back into social sharing," Boyle recently explained.

Specifically, Boyle was referring to “the short-lived nature of [Snapchat’s] messages, the highly visual interface and the features that enable users to get creative with the images they share, and tailor them to specific locations or events.”

Not surprisingly, these fun features appeal to a younger audience. Stateside, Snapchat’s biggest user base is between 18 and 24 years old -- with that age range representing 34% of its user base this year. Those between the ages of 25 and 34 should represent 27% of Snapchat’s domestic user base in 2016.

 

Yet the surest sign of Snapchat’s future success is its increasing popularity with consumers under the age of 12. This year, that age segment will grow 42.9%, eMarketer expects.

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