I recall the first time I saw the little dancing ghost encouraging me to send quick pictures to the 2-3 people I knew who also had the app. It was a lot different then, and that is a big part of its success. I thought it was cute but honestly did not expect such longevity from the Snapchat, which is something that a lot of popular apps struggle with. For example, when Draw Something was big, I went hard in the paint and played it obsessively with everyone I could convince to download it. But the program went stagnant and got boring. I’ve tried logging into it a few times since and there’s just nothing going on. It’s a ghost town… which is a little ironic since that bouncy little ghost of Snapchat has sustained the attention span of its users.
Before I get into the things that have kept Snapchat relevant, let me first explain its goal,which is the same for any app: users. Working for a tech company, I am often asked to research DAU and MAU data (daily and monthly active users, respectively). Users are an app company’s bread and butter, which makes perfect sense if you think of them as customers.
“But, but, but – I don’t pay jack squat for Snapchat! How am I customer?” you may be screaming at your computer. Allow me to explain. Think of apps like magazines or newspapers. You see a lot of them for free or next to nothing. That’s because they make relatively little from subscription fees and the real bank comes from the advertisers who are buying access to the readers. If you just started a cute little zine in your basement (good for you!) and no one’s reading it yet, you are going to have a tough go at convincing advertisers to give you money.
Similarly, you don’t pay for your Facebook subscription, but Facebook makes lots of cash off of you being there.
So it is the main goal of all the apps to build up their user bases (and more specifically, users who log in regularly and frequently), which ultimately builds value on the potential of selling access to those people. Some do it in more obvious ways than others and we will get into that.
There are a few key factors at work here.
- Snapchat is constantly evolving.
The minds behind it must have seen a boom in usage when they quietly added the option to change the color modes of pictures by using the text bar and a code like #b&w for black and white.
Since then, so many features have come spilling forth from the SC development team. They’ve added more color filters, geo-location filters, chat features, and live video chat which is a really strong feature a lot of people don’t seem to even know about. This little naked picture swap machine just flexed up to the Skype/Facetime level, increasing usability. They also realized that people go bananas for fun filters, and have been adding new “Lenses” daily so that each day when you log in, it’s different. I’m sure you woke up today wondering what kind of silly effects had been added whilst you slumbered. I know I did.
One other game-changer for the software was the ability to save your snaps before you send them, which allows people to share their clever pictures of tacos on other media… free advertising for Snapchat!If nothing had changed since day one, we would have lost interest and forgotten our little ghost friend ages ago.
- Snapchat promotes mystery.
Some people think of Snapchat as a communication device, and others as a game. I’d say it’s both. There is a score tied to your account, which was probably an early way the developers toyed with user retention. In any case, the company definitely understands the game of competing in the virtual space.
More often than not, Snapchat adds features under the radar and it’s word of mouth or sheer curiosity that turns people onto it. When I saw my teenage cousin puking rainbows for the first time I was baffled. They didn’t announce the feature for a long time after, and it wasn’t abundantly obvious how to use them.
Another example: There’s a little yellow star next to some of my contacts. I have no freaking clue what this means. I’ve Googled it about 10 times over the last month. Everyone has a different answer, and I’ve tested them. Still haven’t been able to figure out wtf that represents. How does this help Snapchat? Well, I just told you I have searched it several times and used the app a bunch trying to figure it out. Smart little ghost.
- Snapchat is free… for you
If Snapchat came with a price tag, no one would have ever downloaded it. Not only because they wouldn’t want to pay for it, but none of their friends would be on it to send messages to anyway. But the company has to make money somehow, right? Most free apps monetize in one of two ways:
- Ad networks
- “Freemium” models
I haven’t played Candy Crush in awhile, but if I recall correctly, King does both. Ad networks are easy to spot – they’re the in-app ads you tend to ignore until you accidentally touch one and open your app store or browser for 3.2 seconds. A freemium model would be like paying 50 cents for 3 more moves so you can finally move past the level that has been vexing you for a month – basically paying nothing for the app but ponying up for its extra features.
Snapchat has been toying with the freemium stuff, which has angered some users. “Pay $.99 for 3 replays? THAT’S RIDICULOUS!” Yeah… I’m not paying either. I doubt many are. Yet, you don’t see them sticking a bunch of ads all over the app either. It might resort to that someday but for now I do enjoy the clean look without them.
So how are they monetizing? Advertisers are given the option to host their stories through the “Discover” section of Snapchat. It works for them because most of Snapchat’s users aren’t the same demographic they hit on other channels. It works for us because it adds usability to the app we already have open.
Another ad option is to add a branded story to the list of options a user can send his or her snaps to. I noticed while EDC was going on that something like “Add to My EDC Story” became an option above my friends list. They didn’t do that out of the kindness of their hearts.
Additionally, it looks like they’re also starting to add branded filters, which will probably become pretty popular as well. People like them, so advertisers like them, and Snapchat just loves everyone involved.
So there you have it. Snapchat keeps it interesting, keeps you guessing, and doesn’t charge you a penny for it.