Why Google Stories will save, not screw, Snapchat Discover

Snapchat has a new ally or enemy depending on how you look at Google’s new mobile magazine format, but the social app is welcoming the search giant. Google’s clone of Snapchat Discover called AMP Stories officially launched today, allowing news outlets to create photo/video slideshows that appear in mobile search results and on their site. 

Suddenly, Snapchat isn’t the only place to show off Discover-style content.

In response to Google’s launch, Snapchat’s VP of content Nick Bell told TechCrunch, “Our ambition at Snapchat is to empower great storytelling, and we think we have pioneered the best format for doing that on mobile. We’re delighted to see that an industry is starting to form around that, and hope that it will encourage more newsrooms to invest in teams that focus on made for mobile content.”

Snapchat refused to detail whether it demands exclusivity from Discover publishers and forbids them from reusing the content elsewhere. A spokesperson said the company is still considering how to handle the situation. But Bell’s quote implies that Snapchat sees the opportunity for more publishers to adopt the format if they can reuse content from Discover and port in content from AMP Stories.

There are still a lot of big questions, like how prominently Google will feature AMP Stories in search, whether Google will offer powerful tools for creating them, and how advertising revenue splits will be handled. There are no ads in AMP Stories yet even though the format has been in testing since August. But the biggest question is how publishers and advertisers will react to having multiple places to show their animated ‘zines.

There are two ways I see this going. The reality is it will likely be a mix of both, though I think the opportunities outweigh the threats for Snapchat.

The threat: Google steals content and ads from Snapchat

Having the world’s most popular advertising and information platform barge into your business should be at least a little unnerving.

On the content side, Snapchat won’t have a monopoly on placement of Discover-style content. That weakens its negotiating position when striking deals with publishers. Previously, after building up a team to create the visual articles, publishers didn’t have anywhere to go so they were largely stuck with Snapchat’s revenue split terms unless they were willing to fire or reassign the staff.

Snapchat now won’t necessarily have exclusivity on content created for Discover, as publishers might seek to host it on their sites and promote it in search through Google AMP Stories. This comes at a time when Snapchat’s peer-to-peer Stories have been copied by Facebook’s apps and Discover remains one of its most differentiated features.

If Snapchat refuses to let publishers reuse Discover content on AMP Stories, it could piss off news outlets, disincentivize investment in producing top-notch content, or push them to pick Google over Snapchat.

Meanwhile, advertisers will have more inventory to exploit for vertical video ads, potentially reducing the rates of Snapchat’s ads. Google’s scale and relationships with advertisers could allow it to lure dollars away from Snapchat Discover.

But but but…the fact is that Google and Snapchat have very different audiences. Snapchat’s users skew much younger than Google’s. Most advertisers would want to reach one demographic or the other or both. So it’s unlikely that Google AMP Stories would directly cannibalize Snapchat Discover ad revenue. That’s why I think Google’s arrival looks more like…

The opportunity: Google recruits more publishers to Discover’s format

Think of it like Google building its own brand of VCR in the early days of videotapes. Snapchat might not want competition for its own VCR, but if Google convinces more movie studios to make videotapes, the rising tide of the format could lift all boats.

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Publishers have had to put a lot of trust in Snapchat Discover until now. If they built up a content creation team, and then Snapchat lost popularity or buried the Discover feature or monetization didn’t go well, the news outlet had no alternative. And once they made the content, there was nowhere else to put it.

Now, publishers have a hedge in case Snapchat stumbles. They’ll still be able to show their Discover content elsewhere. And with more viewing opportunities and chances to earn ad money to recoup their investment, publishers could pour more resources into creating high quality visual articles.

The opportunity to sell ad against the content twice could convince more publishers to dive into the format. Snapchat earned over $100 million for its content partners in 2017, but Google AMP could grow the ads pie for the whole format.

Exploiting this opportunity might require Snapchat to loosen its grip on publishers, and officially allow them to reuse content on AMP Stories. If it wanted a compromise, it could window Discover content, requiring it to stay exclusive to its platform for 24 hours or longer. Snapchat could still tout its high performance native mobile apps as a better way to consume the content than the mobile web.

The whole equation could change if Facebook and Instagram develop their own version of Discover. Snapchat might have to clamp down and insist on exclusivity then since Instagram offers a similar demographic of audience, though that would risk publishers choosing Facebook’s apps over it.

But for now, Snapchat could view Google as an ally against Facebook and Instagram. If they can popularize the vertical slideshow mobile magazine format together, publishers might envision the dollar signs necessary to staff up Discover/AMP Stories content teams.

What is Snapchat, now Story sharing has stopped growing?

In a betrayal of loyalty signaling poor morale, a massive dump of Snapchat’s usage stats has leaked. The most worrisome is that the number of users posting Stories has shown zero growth, an even worse performance than Snapchat’s total user growth that was sluggish this year. It appears Instagram’s Stories clone has stopped Snapchat’s most monetizable feature dead in its tracks.

This explains why Snapchat’s redesign moves friends Stories into the chat inbox, since visual messaging on the app is growing slightly faster than total users. Messaging is tough to interrupt with ads without being annoying, so combining messages and Stories might be Snap’s best shot at reinvigorating revenue.

Yet the leak as a whole paints a picture of an app that’s falling short of living up to its reputation  as a communication sensation. And with weak morale, a sagging share price, and losses mounting, Snap might not have the momentum it needs to recruit top talent or lure more big acquisitions.

Snapchat’s Soggy Numbers

The leak was scored by The Daily Beast’s Taylor Lorenz, who is quickly making a name for herself as a top reporter on social networks and teen tech culture. She managed to obtain usage data for a wide range of Snapchat’s feature from the end of April to mid-September 2017. You can see the full set of charts at the bottom of this story.

As Lorenz reports, the Snap Map live location sharing and geo-tagged content search feature has sunk from a high of 35 million daily unique viewers after its June launch to just 19 million and falling — just 11 percent of Snapchat’s users. The Discover section where professional publishers post magazine-esque daily editions spiked to 38 million in July, and then has languished at around 34 million daily users — about 19 percent of all users. And usage could fall further as Discover is less prominent in the redesign that’s yet to roll out to most users.

Snapchat’s new redesign

Snap should get credit for soaking up a ton of time from those who do use it, with the app growing average minutes of usage from around 32.7 to 34.8 during the April to September time period.

And the brightest point in the data was that the number of daily Snaps viewed rose from around 3.9 billion to 4.6 billion, or 17.9 percent, which vastly outstrips the roughly 7 percent total user growth in the same time period.

Daily Snaps sent grew from around 2.08 billion to 2.21 billion, in line with total user growth. In August, Lorenz reports that users were 64 percent more likely to send a private snap to a friend than to broadcast to Stories.

Stories Stuck In A Rut

Here’s whre the Facebook competition is really hurting Snapchat. Back in Q2 2016 before Instagram Stories came out, Snapchat grew its user base 17.2 percent. Last quarter, it grew just 2.9 percent, as many users find they can just stick with Instagram and share Stories to their existing social graph where they already post permanent imagery rather than building a new graph on Snapchat.

The number of daily users posting to Snapchat Stories held flat at around 51 million users from April to September despite total user growth. That signals that while people may be sticking with or coming to Snapchat to send disappearing messages to friends, they don’t necessarily need to post to Snapchat Stories.

Daily Snapchat Story unique viewers grew 4.37 percent from 137 million to 143 million during the time period — significantly slower than total user growth. Users who do broadcast to Snapchat Stories are posting more often, at least, and are using more Geofilters. But advertisers want scale, and the lack of total Stories sharers is troubling.

With messaging remaining by far its most popular feature, Snapchat may have to massively increase its augmented reality Sponsored Lens and static Sponsored Geofilter sales to make up for the lack of ads in the feature. Otherwise, it will have to risk pissing off teens by jamming more scalable display ads into the messaging experience.

Influence ≠ Business

Overall, Snap has a rocky road ahead. New features like Snap Map and professional content in Discover don’t appear able to change its fate. The company’s best hope for now is that users grow addicted to algorithmic sorting of Stories to show best friends first, which back in April we recommended it adopt. That’s now finally coming in the redesign, and could make it easier to open Snapchat and quickly see the most relevant stuff from the people you care about.

Beyond that, Snapchat might need another blockbuster acquisition to restore growth. Bitmoji’s personalized avatars and Looksery’s AR lenses gave Snapchat mainstream appeal outside of its ephemerality. But with tales of CEO Evan Spiegel’s iron grip on product, a share price down 50 percent from its post-IPO high, and Facebook’s copying machine running at full-tilt, Snap isn’t as attractive of a place to work as it was when it made those acquisitions.

Snapchat has been incredibly impactful on culture. From impermanent content to vertical video, popularizing augmented reality and bringing on the age of visual communication, Speigel’s ideas have redefined the way we share. Unfortunately, Snapchat hasn’t been able to capture much of the monetary benefits of those inventions as they get cloned elsewhere.

The popularity of Snapchat messaging amongst western teenagers means it won’t disappear overnight. But it may be time for it and the world to face the fact that Snapchat could be world-changing product without ever becoming a world-dominating business.

CNN is killing its Snapchat news show only four months after its debut

CNN is giving up on its Snapchat news show, which launch only four months ago. “The Update,” as the program was called, had been designed for Snapchat’s vertical video format, but didn’t feature video produced only for Snapchat, nor did it have dedicated anchors. Instead, the news featured on “The Update” was a curated selection of CNN’s reporting from its reporters and correspondents worldwide, which was then edited into a roughly 3-minute long format with around five stories.

According to The WSJ, which was first to report the show’s ending, the issue at hand was the show’s potential path to profitability – or rather, the lack thereof. The news network had been one of Snapchat’s launch partners for Discover – a deal that had included licensing fees for its content. But with those fees soon going away, the only avenue to monetization was ad sales, the report said. The implication here is that there wasn’t enough incoming ad revenue to continue to support the show’s further production.

CNN confirmed to TechCrunch it will stop producing the daily show in 2018, but said this doesn’t represent the end to its experiments with Snapchat, or its other plans to publish to Snapchat’s platform.

Snap and CNN also issued a joint statement about the decision to stop production on “The Update,” which said:

“Snap and CNN have built a great partnership over the years and our teams have enormous admiration for each other. We plan to keep working together and mutually decided to hit pause as we explore the best opportunities for doing that. Our relationship will very much be continuing.”

CNN’s news show launched in late August, shortly after NBC News reported early success with its twice-daily show “Stay Tuned,” which was watched by more than 29 million unique viewers in its first month.

However, NBC had taken a different approach to Snapchat – its program is hosted by two dedicated anchors, Gadi Schwartz and Savannah Sellers, for starters. It runs through some five major news and pop culture stories largely sourced from other NBC News programs, but also brought on on-camera guests and did on-the-ground reporting, at times.

The audience captured by “Stay Tuned” is very young, NBC said earlier this year, with 60 percent of its audience under the age of 25.

NBC News told us the show is still going well, reaching “tens of millions” of unique viewers per month, now two-thirds of whom are under 25.

The majority of viewers watch the entire show without skipping through ads, NBC also said.

“We launched this show to reach a new audience. And we’ve been successful in that endeavor, as is evidenced by the tens of millions of under-25 year olds that watch the show every month,” said Nick Ascheim, SVP of digital at NBC News Group. “It’s not easy to do. It requires a different skill set, which we found in the stellar team we put together, it requires close collaboration with a partner, which we have with Snapchat, and it requires perseverance and a willingness to adapt.”

NBC and CNN aren’t the only news outlets in Snapchat’s Discover section. Others include The Washington Post, VICE, NowThisNews, BuzzFeed, The WSJ, Wired, The NYT, The Economist, and Mashable.