We wrote recently that Snapchat is projected to make about $366 million in ad revenue this year, but could double that number next year, fueled by a planned IPO that could bring in as much as $25 billion. But Snapchat is already gearing up, even before the IPO.
According to a piece on Recode, parent company Snap has acquired the San Francisco-based ad tech firm Flite, founded by Giles Goodwin. Some are saying that Snap bought Flite partly to acquire its coterie of ad professionals.
Certainly, Goodwin is outspoken. Last March, he wrote a piece for the Wall Street Journal in which he slammed the quality of digital ads in general as “pedestrian and ineffective. Essentially, digital ads suck.” While noting the ubiquity of “ad blocking, viewability and fraud,” he nonetheless points to the main culprit being the “efficacy of digital ad campaigns.” He points to campaigns for Uber, Amazon and Zappos as outstanding in their focus on user experience, or UX.
We note that Goodwin also linked on his Twitter feed to a piece on 1to1media that praises Snapchat for its video ads.
“Snapchat is one such vendor that has been encouraging marketers to shoot vertical video ads. Earlier this year, the messaging app told the Daily Mail that vertical video ads have up to nine times more completed views than horizontal video ads, reported Daily Mail North America CEO Jon Steinberg.”
The Snap deal has not been announced yet, and Snap is not commenting. Flite has raised $41 million in three rounds from five investors, according to TechCrunch, including General Catalyst Partners, Hummer Winblad Venture Partners, Iris Capital, Sequoia Capital and VivaKi.
Flite has worked with clients like Kellogg’s Frosted Flakes and Discovery Channel. It summarizes itself this way: “Flite is the world's leading creative management platform powering creatives and marketers from top-tier brands, agencies and publishers. Our state-of-the-art platform gives creative professionals the power to design visually stunning ads on live, interactive canvases, while giving marketers the ability to launch, manage, measure and optimize digital ad campaigns in real time, at scale, all in one seamless experience.”
One reason for Snap’s interest could be its expertise with video advertising. Flite's blog notes that U.S. digital video ad spending will hit almost $10 billion this year, and $28 billion by 2020.
Flite Video “gives brands the vehicles to improve branding and performance goals in a high-impact manner and publishers the premium and breakthrough environments to drive monetization — all in achieving one common goal — a heightened digital consumer experience. From Hosted Video and Outstream to VAST and VPAID, Flite Video inspires creativity within our customers and can be customized to every brand’s look and feel — and in HTML5.”
In September, Flite announced what it said was “the first advertising unit that couples a 360-degree video or image with all of the 1:1 personalization of a CMP. Similar to Facebook 360 Video or YouTube 360 video, Flite 360 supports video or images for 360-degree spherical viewing, and adds all of the available interactive elements and personalization components from the Flite CMP platform.”