Snapchat's Rio Live trial signals potential revenue but lacks targeting

Rosie Baker
By Rosie Baker | 15 July 2014

Snapchat has yet to monetise but branded story feeds could be the way to go if its World Cup experiment is any guide.

The Rio Live Story feature Snapchat tested ahead of the Germany Argentina World Cup 2014 final highlights a potential revenue stream and opportunity for brands on the mobile photo sharing app.

It added the Rio Live event to Our Stories, so that users who were in Rio could contribute their own moment to the Rio Live narrative that unfolded in real time, and also allows Snapchatters who aren't in Rio to share in the event.

Branded or sponsored Stories is a potential way for Snapchat to monetise in the future, although the founders haven't given much away. There is no official blog post about the Rio Live test, and Snapchat hasn't officially tweeted since Friday (10 July).

Rio Live got mixed reviews on Twitter from users. Some loved it, some hated it, but Nicola Swankie, at IPG Mediabrands social division Society said it was a “clever play” from the mobile app, showing that is a real time, “in the moment” channel that has potential for monetisation.

For brands who sponsor events like music festivals it would be an appealing paid advertising model on the app, she said, as it's a way to connect people with events whether they attend or not.

“What Snapchat has done through their product feature is show the beauty of social as something engaging that people want to be part of. It's going back to the roots of social by using tech to bring people together and connect them with an event," said Swankie.

“There's definitely an opportunity for brands but it needs to be baked into a broader strategy and come back to there being a compelling reason for people to connect with your brand. It needs to be something that people want to see and interact with whether it's the World Cup or brand content, it needs to be interesting enough for people to want to see it on their phones. It's not going to work if it's just pumping out marketing.”

One of the complaints against Rio Live was that users seemed not to be able to get rid of the feature from their Stories timeline, whether they were interested in soccer or not. As with any social media, it's optional so users who aren't interested could just choose not to look at it, but targeting would make the appeal for brands even greater, as they would be able to make sure their brand Stories only went to relevant audiences.

Luke Ryan, senior strategist at We Are Social, said: “Snapchat could look at charging advertisers for sharing photo and video stories in the same way Instagram have integrated sponsored posts and video. One of the biggest learnings it would have received from the backlash surrounding Rio Live is the importance of targeting.”

“The strategy to offer people a first person view into a world they may not have access to, an insiders view of the World Cup 2014, is nice, but fails to address the point that social channels are used by people in order to either receive information personalised to their exact interests - family, friends, personalised news stories - or send out information to the world that positively affects how they are perceived by others - help the world see me how I want to be perceived. Neither of these goals are met when receiving information completely irrelevant to your interests, hence the outrage we saw over Twitter.”

While there are examples of brands in the US that are using Snapchat, such as Taco bell, there are fewer examples from Australia, although Swankie says all of Society's clients are “curious” about it to target the teen and young adult market. It;s just not quite translating into action because “brands are still figuring out how to use it,” said Swankie.

Radio station Triple J, is in Swankie's opinion, one of the best local examples.

Rio Live and the Our Stories feature is a continuation of the Stories feature Snapchat added in October which meant users could join together Snapchats into a narrative that would last 24 hours - the first time its content lasted longer than 10-seconds. It was the first time that brands could use the platform to offer something with more longevity to tell brand stories or give users short term promotions or discounts.

Snapchat Stats:

  • 61% of users are women
  • 47% of Snapchat users are between 16 and 25
  • 34% of 16 to 19-year-olds use the app on a daily basis
  • 66% have fewer than 20 friends on Snapchat
  • 25% of users admit to using it for “a sexual nature”
  • 47% of users send both videos and images

Source: Datafication: The Works and University of Technology Sydney 

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