This is according to a report in TechCrunch, in which a high-ranking Snap Executive told the website that the company’s direction would respond strategically to the implementation of Snap-like features, through its Snap Kit developer product. Core to the strategy from a revenue perspective will be the ability to sell ads in third-party apps, effectively copying Facebook’s Audience Network.
For instance, users can now broadcast their stories – ephemeral videos – on Tinder, or the group video chat app Houseparty. Third party apps can display Snapchat content either in the typical carousel format or place them in a custom format.
Up to the end of 2018, Snap’s advertising revenue had been climbing quite steadily, though it has faced stagnating user growth, as WARC Data shows.
Snap CEO Evan Spiegel spoke at the event about his firm’s purchase among a young millennial/Gen Z audience. “In the United States, Snapchat now reaches nearly 75 percent of all 13 to 34-year-olds, and we reach 90 percent of 13 to 24-year-olds. In fact, we reach more 13 to 24-year-olds than Facebook or Instagram in the United States, the UK, France, Canada and Australia.”
Snap debuted the new features in Snap Kit at an event in LA last week, at which it also announced a new games platform and a new augmented reality platform, Scan. Already used by more than 200 apps, a key feature in Snap Kit is the ability for users to log into third-party apps using their Snapchat credentials.
The biggest addition to the software development kit (SDK) is Ad Kit, which will allow developers to integrate Snapchat’s systems, against which Snap will be able to sell ads beyond Snapchat users, whose user growth has slowed.
It has not yet hinted at the exact split of revenues between developers and itself, and it says it is observing how developer interest progresses.
What is interesting about the new strategy is how it moves on the native app ecosystem in a similar way to Facebook’s move on the web with the now-ubiquitous like button. It also saves developers the extremely challenging work of building a proprietary camera/video product from scratch.
In short, Snap’s offer to third-party apps is the ability to collaborate and get a cut of the cash. For advertisers, it is now extending its reach beyond an important young audience, making it a more compelling destination for ad dollars.
Sourced from TechCrunch, WARC