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Snapchat - something up its sleeve?

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by Bryan Dollery
on

A simple discovery hints toward huge possibilities.

Update: Snapchat seduces advertisers with new self-serve tools and certified partners

Losing money, leverage, and suffering from slow growth. Judging from Snap's S-1 document however, it all seems part of the plan.

Run, run, run as fast as you can. You'll never catch me, I'm the gingerbread man.

The childrens' rhyme goes some way to illustrate Snap's "Gingerbread Man strategy" - by running out ahead and innovating at all costs, they hope to land the best customers and secure profits later down the line. Now, in a discovery that has us squinting in speculation, all that running might soon pay off.

Earlier this month, Shane Wey of MightySignal reported that they noticed the PayPal SDK had been installed in both the iOS and Android versions of Snapchat. The reason? Wey has three theories. The most obvious guess is optimization for Snapcash, the app's person-to-person payment feature that hasn’t exactly caught on. Wey's other two theories are somewhat more intriguing. 

Buying spectacles through the app

Back in May, CNBC described the Spectacles as a “genius” marketing gimmick, pointing out that the vendor machine launch in New York was telling a story about Snapchat. When Snapchat is all about content, telling a story about a new way to create that content is simply good marketing. Moreover, AR-themed devices are forecasted to grow rapidly over the next few years, so it stands to reason that Snap would to keep to their commitment of broadening Spectacle sales. Enabling purchases through Snapchat would be a well-played move.

Buying from ads

If you’re able to sell a product through your app, why not expand that functionality to the advertising space you sell? Imagine a user seeing an ad for a product they want, and being able to buy it there and then. “This would be game changing,” Wey says, comparing it to Pinterest’s "buyable pins", which allow users to buy the product featured in a pin without leaving Pinterest.

"This would be game changing, offer users a way to buy goods in the app, advertisers a way to sell directly sell products to their audience, and Snap a way to generate more revenue."

Shane Wey, CEO of MightySignal

This is particularly interesting considering another recent development: Snap acquired Placed, an ad tech company based in Seattle. Placed specializes in the tricky field of measuring offline sales attribution. This could be part and parcel of a strategy by Snap to prove the value of their advertising space, which would come in handy if they want to sell this new ad format to retailers.

Over 100 employees from Placed will be joining Snap, but Placed will work independently, continuing to work on ad campaigns for other advertisers. So if nothing else, Snap has their a hand rooted in a stable venture.

What we are asking ourselves here at Luxus is that what if Snapchat hit all three nails on the head? That is to say, imagine if they upped their game with Snapcash, enabled purchases of Spectacles through Snapchat, and enabled advertisers to sell through their own ads? Of course, there is always the possibility that the PayPal SDK is part of a more mundane plan, but if Snap's relentless, costly innovation is going to pay off, they don't want to miss out on these opportunities.

Sources

  1. Forbes: Snapchat Installs PayPal: Planning Mobile Commerce Feature?
  2. Stratechery: Snap's Apple Strategy
  3. MightySignal: What is Snap preparing for?
  4. Market Realist: A Peek at Snap's Spectacles
  5. CNBC: So far, Snapchat's Spectacles are completely irrelevant to its business
  6. Pinterest: Buyable Pins
  7. Recode: Snap just acquired Placed, a company that tracks whether online ads actually lead to offline purchases