• by Aaron Goldman , Op-Ed Contributor, February 12, 2017

Don’t call Snap a social network. It’s a camera company. (At least that’s what its S-1 says.) And it’s poised to raise $4 billion with an IPO that will value the company between $20 and $25 billion.

How did a quirky app featuring disappearing photos become such a Goliath? How did it corner the market on 13-24 year-old attention? How did it rake in $400+ million last year without a fully ramped sales machine and API ecosystem? How did Snap change the game for the major social networks that came before it and lay the groundwork for those that will come after it?.

We’ll answer all these burning questions in this column, but first, a disclosure: My company is a Snapchat partner, and we’ve built a product on top of the Snap Ads API.

Say cheese

Snap’s biggest innovation was putting the camera at the center of its app.

In an age of social media where feeds ruled and the first action most people took was looking at what others were doing, Snap encouraged selfies. And it added in a bunch of fun, easy-to-use tools to gussy up those selfies.

Snap incents active creation, not just consumption, through badges and trophies. It’s just plain addictive.

So that explains the usage. But what about the money?

Restlessly native

Snap has taken a very thoughtful approach to monetization. For three years, it didn’t have any advertising at all while building up a rabid user base.

In 2014, Snap introduced native ads that truly mirror the way people use the platform. No small blue links. No righthand rail. Just sponsored lenses, geofilters and its 3V (vertical video views) unit known as Snap Ads.

Unlike other platforms, where ads don’t take up the entire screen and the sound is not on by default, Snap Ads flip the script on both, making them highly immersive.

Like other platforms, though, Snapchat has built an API ecosystem to allow advertisers to buy ads through third parties. Much has been made of the fact that the Snap Ads partner program is similar to Facebook’s marketing partner program, and that much of the functionality made available through its API borrows from the Facebook playbook.

But two can play this game.

Monkey see, monkey do

Facebook — with Messenger and Instagram in particular — has cloned Snapchat features no fewer than 15 times, including stories, geofilters, and lenses.

There are reports that this technique has worked, with user growth on Snapchat slowing 82% since Instagram rolled out stories — but once your daily active users reach the hundreds of millions, it could just be the law of big numbers.

Personally, I find myself splitting time more between the two apps. But like any good marketer, I consider my audience when deciding which platform is right for sharing a potential epic fail as my kids climb the monkey bars. Sometimes, you just gotta boomerang!

Both Facebook and Snapchat have been called the TV channels of choice for millennials, with each platform boasting billions of video views per day. But there’s one area where Facebook seems to be differentiating itself.

We’ll do it live

Owning “live” has become mission-critical for Facebook.

For it to continue its meteoric growth, Facebook — or one of the other apps it owns — needs to be the first thing you use when you unlock your phone. It has to induce FOMO (fear of missing out).

Currently Snapchat, with its camera-first functionality, has first app status and brings out serious FOMO among its hardcore audience. Facebook can create a wedge if it makes you think of it first when anything interesting is happening that you want to broadcast.

Facebook has poured a tremendous amount of money into out-of-home and TV ads showing people how to go live. And it’s built live into Instagram. Facebook also reportedly paid $50 million to celebrities and influencers to create live videos.

Of course, Facebook’s not the only live game in town. For many years, Twitter has thrived on live. It’s well-positioned as the source of real-time news and plays the role of TV companion app. Twitter also owns Periscope, one of the original live-streaming apps.

Snapchat doesn’t do live as we know it. People always have a chance to censor or edit Snaps before sharing — even if they’re taken with Spectacles. Ironically, with its bold move into live, Facebook has become the more ephemeral (and risky) of the platforms from a sharing standpoint. My, how the tables have turned!

Live or not, video is clearly the battleground for all platforms going forward: social, mobile, TV, camera or otherwise.

The game has changed, and the race is on. The winner will be the company that builds/buys the apps people use first and foremost (FOMOst?) in their daily routines. From that point on, monetization will be a snap.