Snap's 'Major Opportunity' Depends on Explaining How It Works to Potential Advertisers

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

Snap's 'Major Opportunity' Depends on Explaining How It Works to Potential Advertisers
c1.staticflickr.com

Even though most of Snap's potential advertisers have no clue how to use Snapchat, the company forecasts multiple years of 50% revenue growth.

That was the big takeaway from Snap's first ever Investor Day on Tuesday. Following a banner year that saw the company's stock price more than quadruple, the market continues to like what it sees. Snap's shares were up 11% by market close and the company surpassed a $106 billion market cap.


Yet to keep pace with the market's optimism, analysts say Snap's challenge will be in monetizing its 265 million users who check in on the app an average of 30 times a day. And key to that is educating advertisers about how Snapchat works.

The nine-year-old public company's flagship app is a hit among young people – reaching 90% of 13-24 year-olds in the U.S. – but as its usage declines with age, so does familiarity with how it works.

"We are selling to an audience oftentimes who don't use Snapchat on a day-to-day basis," said chief business officer Jeremi Gorman in a question and answer session at the tail end of the three-hour virtual event.

It's helpful that over the past few years Snap has focused on "tightening up the product," said KeyBanc analyst Justin Patterson. That effort has included adding several new features and reorganizing the user experience.

On Tuesday, chief executive Evan Spiegel said the company's future innovation will now transition into growing around the five "core building blocks" of its Camera, Chat, Stories, Maps and Spotlight features.

Last summer, Snap added a toolbar on Snapchat to help users navigate across these five features. Numerous executives emphasized Tuesday that these features are at various stages of maturity, and therefore represent different opportunities for the company's growth.

Explaining Snap's rosy revenue projections, Chief Finance Officer Derek Andersen said the biggest near- and medium-term opportunities are in the Camera (he called AR lenses a "multibillion dollar opportunity") and Stories (the widely copycatted chronological images and videos that Snap pioneered, and which Andersen said includes Snapchat's curated content feature, Discover).

In the longer term, Andersen said Maps are another "multibillion dollar opportunity" to connect local businesses to users. Spotlight is also in its early stages, as the TikTok-like feature launched just a few months ago.

Andersen added that Snap's relatively low average revenue per user compared to competitors like Twitter and Facebook offers reason for optimism.

Furthering the case, Gorman noted that although Snap reaches nearly half of all U.S. smartphone users, it captures less than 2% of the $142 billion U.S. digital advertising market – which, she said, emarketer has forecasted to grow at 14% per year.

Recognizing that educating advertisers on how Snapchat works is its biggest hurdle, in August the company ran its first business-facing marketing campaign. Chief Marketing Officer Kenny Mitchell said the campaign, alongside Snap's other efforts to train marketers, has resulted in more advertisers completing Snap's business-education certification over the past seven months than in the prior three years combined.

Still, whether Snap wants to lure more companies to spend money on the six-second unskippable ads that appear in between Stories, set up a listing on Maps or showcase a brand or highlight a sale with an AR lens campaign, the self-styled camera company out of Santa Monica remains in translation mode.

Toward the end of the event, Gorman walked analysts through a hypothetical example of how her team tries to help advertisers understand how the young people that they're trying to reach use Snapchat.

"Open your phone," she said. "What apps do you see that you use the most?"

Most of the time, she said, the response is some combination of messaging, camera and map.

"For this generation, for 13 to 34," her demo continued, "those things are all together in Snapchat."

Moving forward, there "is a major [monetization] opportunity for [Snap]," said Piper Sandler analyst Tom Champion. "It just remains to be seen whether or not they can do it."

https://twitter.com/hisamblake
samblake@dot.la
Fuel Innovation: 7 Unforgettable Team Building Experiences in LA
Image Source: Discover LA

In today's competitive business landscape, team building activities have emerged as a crucial tool for fostering a positive work environment, enhancing productivity, and crucially, improving employee retention. Studies have shown that such activities help employees feel valued, with one report indicating that 93% of those who felt appreciated were more motivated at work. Importantly, team building events may improve retention rates, as employees who feel connected to their colleagues and company culture are more likely to stay long-term. With these benefits in mind, let's explore some of the most engaging and effective team building activities available in Los Angeles.

Pickleball

Image Source: Modern Luxury Angelino

Pickleball is a fantastic team bonding activity because of the easy-to-grasp rules and gentle pace make it perfect for everyone, regardless of age or fitness level. The game thrives on communication and teamwork, as players must collaborate and strategize to outplay their opponents, boosting team cohesion. Plus, the lively, fast-paced action sparks friendly competition and laughter, creating a fun and spirited atmosphere that brings everyone closer together. Los Angeles boasts numerous pickleball courts that are easy to rent if you have your own equipment. If you need additional assistance organizing your pickleball outing, there are plenty of full-service companies ready to handle every detail for you.

Resources: Pickle Pop, Corporate Pickle


Escape Room

Image Source: The Escape Game

Escape rooms are a great way to build camaraderie. They require participants to work together, combining their problem-solving skills and creativity to overcome challenges and puzzles. The immersive and time-sensitive nature of escape rooms fosters collaboration and communication. Additionally, the shared experience of tackling complex tasks and reaching a common goal helps build trust and foster positive emotions among colleagues.

Resources: The Escape Game, 60Out


Day Trip to Catalina Island

Image Source: Love Catalina

Catalina Island is a perfect day trip for a team because it provides a break from the usual work environment, allowing team members to relax and connect in a new setting. Shared experiences during the trip, such as exploring new places and participating in fun activities, help build stronger relationships and foster a sense of camaraderie. There are numerous team-building activities such as an arboreal obstacle course, an island tour, scavenger hunts and more.

Resources: Catalina Island Group Activities


Top Golf

Image Source: Topgolf

Topgolf is an excellent team building event because it provides an inclusive, relaxed atmosphere that accommodates players of all skill levels, fostering personal connections and improving team morale. The unique blend of competition and entertainment creates an ideal setting for building trust, enhancing communication, and revealing hidden skills among team members. Additionally, Topgolf offers structured team building packages with guided activities, discussion prompts, and lessons on culture, change, collaboration, and strategy, making it a versatile and effective platform for strengthening relationships and boosting overall team performance.

Resources: Topgolf El Segundo


SoFi Stadium Tour

Image Source: Discover LA

A SoFi Stadium tour offers a unique, behind-the-scenes experience of one of the world's most advanced sports venues, allowing team members to explore exclusive areas like premium suites, team locker rooms, and the player tunnel together. The tour provides a shared, memorable experience that can foster camaraderie and spark conversations among team members, regardless of their interest in sports. Additionally, the stadium's state-of-the-art features and impressive architecture can inspire creativity and innovation, while the group setting encourages interaction and collaboration, making it an engaging and enjoyable activity for teams of various sizes and backgrounds

Resources: SoFi Stadium Group Tours


Corporate Volunteering

Image Source: L.A. Works

Volunteer work serves as an excellent team building activity by uniting employees around a shared, meaningful cause, fostering a sense of purpose and collective accomplishment. It provides opportunities for team members to collaborate in new ways, often revealing hidden strengths and leadership qualities that may not be apparent in the regular work environment. Additionally, engaging in community service can boost morale, enhance the company's reputation, and instill a sense of pride among employees, leading to improved workplace relationships and increased job satisfaction.

Resources: Habitat for Humanity, L.A. Works, VolunteerMatch


Corporate Improv Sessions

Image Source: Improv for the People

A corporate improv class encourages spontaneity, creativity, and quick thinking, skills that are valuable in the workplace. It promotes active listening and collaboration, as participants must work together to create scenes and respond to unexpected situations, fostering better communication and trust among team members. Additionally, the playful and often humorous nature of improv helps break down barriers, reduces stress, and creates a shared positive experience that can improve team morale and cohesion long after the event.

Resources: Improv-LA, Groundlings, Improv for the People

🎬 Paramount and Skydance Are Back On
Image Source: Paramount

Happy Friday Los Angeles! Hope you all had a fantastic Fourth!!

🔦 Spotlight

Paramount and Skydance Media have rekindled talks to merge after negotiations abruptly halted in June. The proposed deal, contingent on approval from Paramount’s board, aims to combine Paramount’s extensive media holdings—including CBS, MTV, and Nickelodeon—with Skydance’s film expertise showcased in hits like "Top Gun: Maverick." This merger signals a potential transformation in the media landscape, positioning the new entity to compete more effectively amid challenges from streaming services and the decline of traditional cable TV.

Led by Shari Redstone, Paramount’s controlling shareholder via National Amusements, the deal represents a pivot towards revitalizing Paramount’s strategic direction amidst financial struggles and shareholder concerns. The involvement of major investors like RedBird Capital Partners and David Ellison underscores the financial backing aimed at stabilizing Paramount’s operations and addressing its $14 billion debt burden. Importantly, the agreement includes provisions to protect National Amusements from potential legal challenges, addressing previous hurdles that stalled earlier negotiations.

The deal also includes a 45-day period for Paramount to explore alternative offers, highlighting continued interest from other potential buyers like Barry Diller’s IAC and media executive Edgar Bronfman Jr. This flurry of activity underscores the significant stakeholders’ interest in Paramount’s future and its potential as a key player in a rapidly evolving media industry.


🤝 Venture Deals

LA Companies

  • Sidecar Health, a startup that offers personalized health insurance plans to businesses that allow members to see any doctor and pay directly at the time of service, raised a $165M Series D led by Koch Disruptive Technologies. - learn more

LA Venture Funds


Download the dot.LA App

RELATEDEDITOR'S PICKS
Trending