Perhaps there isn't just a good way to weave advertising into an app originally designed to send ephemeral pictures to friends? It seems like that's the real reason Snaps fate was preordained, and has nothing to do with Google/FBs ad empire.
[1] http://markets.businessinsider.com/news/stocks/snap-stock-pr...
[2] https://digiday.com/marketing/scale-matters-advertisers-opti...
Instagram is more analogous to Twitter, and I assume advertisements occur both within the "Stories" and the newsfeed - this seems much more favorable to advertisers and is something advertisers are more used to.
I buy that it's harder for startups to break into social today, but that's true of most industries as they consolidate, I don't know that it means they're a monopoly.
Slack is a social networking tool that has managed to grow and scale by focusing on different use cases and by using a different business model.
If Snap had figured out how to get to profitability, or even focused more on reaching out to older users they may have found themselves in a different situation.
When Facebook IPOd, they had 160m monthly active users, and had $3.7B in revenue with $1B in profits.
And yet with more users, Snapchat pulls in $200m in revenue last quarter, and lost $440m.
The users are there. That's not their problem.
Plus, it sounds like not all of those 180m Snapchat users are interacting with the part of Snapchat where they would see ads, so the audience is smaller.
That said, I completely agree that a lack of users isn't preventing them from having a decent advertising business. It's just preventing them from doing it on the terms they want.
Snapchat ads come at the end of 1 person’s story, or between random people if you have multiple peoples’ stories queued. I never do the latter because it’s a dark pattern to make you wait for the ad to finish before the next story, so I always watch 1 person, and swipe out if there’s an ad. In general, it seems like Snapchat ads are higher production quality and less relevant.
Sure you can have 100k followers and say "80k people viewed my advertising story", but it stops at that.
Instagram provides deeper metrics and analysis which can help justify the spend to advertisers.
This is why a lot of Snap marketers have pushed their content to Instagram so they can get a better pay-day.
Do you really think any of these customers are saying to themselves: "Gee Snapchat ads are so effective and are making us so much money... we better stop it immediately."
I believe advertisers are not jumping on Snapchat's inventory because the perception about said inventory: kids chatting with other kids and porn. Why would you advertise on that?
A small percentage of companies are actively advertising on that. The featured stories (ads) on Snapchat almost always use sexual imagery to bait you into opening them. I agree, I don't think that's a sustainable model and it honestly shows how desperate Snap is to make revenue to allow these sort of ads.
I just can't wait to see what kind of life-changing innovation will surely result from this endeavor...