Snap’s stock investors haven’t made much money since the company went public last year, but CEO Evan Spiegel still got a hefty payday.
According to an SEC filing, he was granted an RSU of 37,447,817, which vested at the time of the IPO. In other words, that was worth nearly $636.6 million. His salary for the year was $98,078, and he had over $1 million in other benefits, so all in all, Spiegel made $638 million in 2017 alone.
That’s…a lot of money. But the Snapchat co-founder also started the whole thing.
And he wasn’t the only executive to get a big payday. Chief Strategy Officer Imran Khan netted over $100 million and the company’s new general counsel Michael O’Sullivan earned almost $17 million, for less than half a year’s work. Former general counsel Chris Handman earned over $54 million for the first seven months of last year.
At this point, if you haven’t accepted the celebrity influence of the Kardashian/Jenner machine, you probably haven’t been paying attention to pop culture at large. Nevertheless, when a reality star can seemingly affect the value of your publicly-traded tech company, you’re in a bit of trouble.
Yesterday, Kylie Jenner tweeted a pretty brutal takedown of Snapchat with the nonchalance that only a celebrity who has mastered social media better than most can do.
sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.
The words were significant not only because of who was saying it, but because it fits a pretty clear narrative that Snap is slowly losing its bread-and-butter users to Instagram and that its controversial redesign has alienated the core who were still holding on.
Even though Snap CEO Evan Spiegel voiced that the company was anticipating some blowback from the app’s redesign, things have still been a bit of a disaster with the company being forced to respond to a Change.org petition decrying the redesign that currently has more than 1.2 million signatures. This PR nightmare has had negative impacts on the company’s business as well, Citi downgraded Snap stock Tuesday in response to some of this blowback sending the stock downwards. Snap’s stock price is down 8 percent today.
Kylie Jenner is just about as influential a celebrity as they come, many of the product advances of social media companies like Snap have been bore on the backs on influencers like Jenner who have hundreds of millions of followers across these platforms that she uses to push her makeup products and lifestyle onto culture.
Snapchat’s advantage has always been that it’s been a bit of a youth-centric enigma, investor have assumed that the audience of DAUs that it has in its back pocket is a the most highly valuable demographic of young, loyal users. It turns out that after a divisive redesign, people are discovering that the kids aren’t alright with change and that they are just as aware of the creeping sense of stagnation as everyone else.
After sending a tweet that signified Snapchat hadn’t done anything to hold here attention, Jenner went one further basically signaling that the app was a point of nostalgia for her now. As my colleague Jon put so succinctly, “Live by the influencer, die by the influencer.”
Snapchat has posted an official response to users who signed a petition on Change.org asking the company to reverse its controversial update, which people say makes the app more difficult to use. In the response, Snapchat promises to make a few more changes to the Friends and Discover section in order to address user complaints.
The backlash against Snapchat has been growing in the months since the company rolled out a major revamp, which aimed to make the social app more accessible to a mainstream audience. Snapchat users have left the app bad reviews, complainedon social media, turned to rival Instagram, and they signed a Change.org petition entitled, “Remove the new Snapchat update.”
Users are upset over a number of things in the new design, including the mixing of Stories in a single “Friends” page, increased difficulties with finding friends and rewatching Stories, and a revamped Discover section which combines content from professional creators, big news outlets, video makers, and social media stars.
Tweets complaining about the update have gone viral.
Celebrities, like Chrissy Teigen, and YouTuber Marques Brownlee (MKBHD), have also weighed in.
I’m seeing this same comment so often. I liked that you guys felt like we were friends. I’m sad it doesn’t feel like that anymore. How many people have to hate an update for it to be reconsidered? https://t.co/PI7OAf9Qlg
The Change.org petition didn’t delve into the specifics regarding the changes Snapchat users hate, but says the update is “annoying,” and has made “many features more difficult.” It asks Snap, Inc. to “change the app back to the basics.”
“It’ll take time for people to adjust, but for me using it for a couple months I feel way more attached to the service,” said Spiegel.
The user backlash is reminiscent of the one Facebook had faced years ago, when users rebelled over the addition of News Feed which radically changed the Facebook experience. News Feed was ultimately a success; whether Snapchat can pull through is still unknown.
Snap’s earnings, however, pointed to the redesign’s potential to positively impact the company’s numbers. Publisher Stories on Discover grew 40 percent compared to the old design, and users older than 35 were engaging with the app more, the company said, when posting its first earnings beat.
But many users, right now, are not happy. As of February 13, 2018, the Change.org petition had grown to over 800,000 signatures. Today, it stands at 1,223,722, as of the time of writing.
Last night, Snapchat posted an official response to the petition, reiterating its stance but also promising a few tweaks that may help to address users’ concerns.
Specifically, the company said that “beginning soon on iOS and with Android in the coming weeks” it will introduce tabs in the Friends section and in Discover, which it says will make it easier for users to find the Stories they want. This update will let users sort things like Stories, Group Chats, and Subscriptions. (You can read more about this here.)
Whether these tabs will placate users who just want the old Snapchat back remains to be seen.
Snapchat’s full response is below:
FEB 20, 2018 — To Nic and all of the Snapchatters who signed this petition,
We hear you, and appreciate that you took the time to let us know how you feel. We completely understand the new Snapchat has felt uncomfortable for many.
By putting everything from your friends in one place, our goal was to make it easier to connect with the people you care about most. The new Friends page will adapt to you and get smarter over time, reflecting who you’re most likely to be Snapping with at that moment. This same personalization is also true of the new Discover, which will adapt to you the more that you use it.
Beginning soon on iOS, and with Android in the coming weeks, we are introducing tabs in Friends and Discover, which will make it easier to find the Stories that you want, when you want them. Once you receive the update, you’ll be able to sort things like Stories, Group Chats, and Subscriptions, allowing you to further customize your own experience on the app.
This new foundation is just the beginning, and we will always listen closely to find new ways to make the service better for everyone. We are grateful for your enthusiasm and creativity. We are very excited for what’s ahead.
Messaging is the heart of Snapchat, so after cloning and augmenting Stories, Instagram is hoping to boost intimate usage of Direct with privacy controls not found elsewhere. Now when you send an ephemeral photo or video from the Instagram Direct camera, you can decide whether recipients can only view it once, replay it temporarily, or will see a permanent thumbnail of it in the chat log.
Previously, all messages could be replayed temporarily but then would completely disappear. Snapchat always lets you temporarily replay a photo or video message, with no way for senders to deactivate the option.
The replay controls could encourage Instagrammers to send more sensitive imagery by allowing them to prevent replays that can give people time to take a photo of their screen with another camera without triggering a screenshot alert to the sender. Whether it’s silly or sexy, some messages are only meant to be seen once. Meanwhile, non-sensitive messages can be set to permanent so it’s easy to look back and reminisce, or prevent a conversation from losing context if someone forgets or misses what was in a visual message.
Instagram tells me it rolled out the new “Keep in chat” option last month after introducing “allow replay”, or “view once” options in November. Ken Schillinger first tweeted about the change. Remember, you can only replay a message right after you watch it the first time before closing the app or moving to a different screen. And senders are able to see if you replay a message.
Battle for chat beyond Stories
Snapchat’s private messaging was proved to be its most resilient feature after a leak saw The Daily Beast’s Taylor Lorenz dump a ton of the company’s usage data. In August, Snapchat users were 64 percent more likely to send a private snap to a friend than broadcast to Stories. While the number of daily users who post to Stories stagnated during Q3 last year in the face of Instagram’s competition, the number of users sending messages continues to rise.
Instagram and Snapchat continue to see distinct behavior patterns despite the former’s attempt to become the latter. Instagram Stories was supposed to let you share more than the permanent feed highlights of your life. But users still seem to prefer to share private, provocative, and ridiculous Stories and messages on Snapchat, while Instagram gets more polished and posed posts and re-sharing of memes.
Being able to block replays or keep messages from entirely disappearing could let Direct encompass a wider range of visual communication.
Snap, Nike, Darkstore and Shopify teamed up in a collaboration of epic proportions to pre-release the Air Jordan III “Tinker” on Snapchat with same-day delivery last night after the NBA All-Star game. This is the first time a brand other than Snap has sold a product via Snapchat.
The thousands who attended the Jumpman All-Star after-party in Los Angeles last night were able to scan exclusive Snap codes to receive the shoes by 10:30pm that same night. Once they scanned the Snap code, they were brought into the Snapchat app, where they could then purchase the sneakers.
“This is the holy grail of the experience [Nike is] trying to intend, which is direct to consumer — to the actual consumer, versus a bot, — and same-day delivery,” Hnetinka said. “The Snap code introduces a new paradigm for commerce.”
Darkstore works by exploiting excess capacity in storage facilities, malls and bodegas, and enables them to be fulfillment centers with just a smartphone. The idea is that brands without local inventory can store products in a Darkstore and then ship them out the same day.
In addition to the exclusive Snap codes, Snapchat geofenced the area over the Staples Center in downtown Los Angeles during the All-Star game. Within that geofence, fans had access to a special 3D augmented reality Michael Jordan lens.
The official release for the shoe isn’t until March 24, but Nike wanted to do something extra special in celebration for the 30th anniversary of Michael Jordan’s slam dunk in 1988. That dunk is often referred to as the moment when Jordan “took flight.”
This isn’t Nike’s first time selling shoes via app-based experiences. Last June, Nike’s release for the SB Dunk High “Momofuku” required people to go a Momofuku restaurant, or to the Momofuku website, and then point their camera at the menu in order to see a sneaker pop up in augmented reality. From there, sneakerheads could purchase the shoes. Similar to what Nike is doing with Snapchat, you have to physically, or virtually, be somewhere in order to buy a pair.
This collaboration also marks Snap’s most aggressive move into the in-app e-commerce game. Snap launched the Snap Store within the Snapchat app’s Discover section just earlier this month to sell the Dancing Hot Dog Plushie, Snapchat winkface sweatshirt and other Snap-related products. At the time, TechCrunch’s Josh Constine noted Snapchat could position itself as a way for top brands to reach their audiences in a medium that bridges both shopping and social experiences.
Despite a lot of backlash over a big redesign for the Snapchat app — which to be sure is a very big deal for a product-centric company like Snap — Snap CEO Evan Spiegel basically said the redesign is here to stay and people need to get used to it.
Spiegel said at the Goldman Sachs Internet & Technology Conference that even people complaining about the app was a sort of validation that the changes the company wants to happen are, indeed, happening. Snap aimed to try to separate the idea of communication and broadcasting with Snap into similar buckets, rather than the features being kind of mixed up (like Stories being on a right swipe).
“The tech is an important piece but I think the harder part you can’t get around is the time it takes to learn,” Spiegel said. “You do need folks to use the product, to communicate wit their friends to learn how to better provide that feed. The tech to some degree is a solved problem, the time to… to learn is a hard problem to solve. Even the complaints we’re seeing reinforce the philosophy. Even the frustrations we’re seeing really validate those changes. It’ll take time for people to adjust, but for me using it for a couple months I feel way more attached to the service.”
Of course, Spiegel can say these things on stage and then end up changing his mind. But as Snap faces increasing competition from companies looking to clone some of its products — Instagram stories, basically — Snap has had to look at some pretty significant changes to see if it can hold onto its users and continue to grow. As with any significant changes, Snap faced a ton of backlash, but maybe found it had to stay the course. Of course, Spiegel said on stage that it’s basically flattering that people want to copy the app. (Founders often call this “validation of the business,” because why not.)
Snap reported its fourth-quarter earnings earlier this month, which beat some expectations and sent the shares soaring at essentially rocket ship status. Snap has come quite close to recovering from the significant crash it had through its first year as a public company, something Spiegel said — like many fresh CEOs often say — has made them a better company. As a public company, Snap is much more beholden to public investors and has a newfound fiduciary duty to get its business in order.
Spiegel also said the company is less focused on specific geographies as it looks to continue to grow, and more focused on making sure its users actually understand the app when the join and are able to start communicating with your friends. “We’re really focused on, how when you come into our service, do you understand stories, do you understand maps,” Spiegel said.
Spiegel has repeated the refrain that Snap is going to be a camera company, emphasizing that the idea of what a camera is used for has changed over time. But Snap has also created a kind of portfolio of products around Snapchat like content and the Snap Maps feature. Spiegel also said, for example, that 30 million people have watched content related to the Olympics at the conference. All this is geared toward getting people to find a bunch of different use cases for the app, which can get them to come back over and over and keep more engaged.
“The thing that drives the business is fundamentally the engagement around the products,” Spiegel said. “That needs to be there first. Even at the time full-screen vertical video ads, no one will make those, what we’ve seen is the value delivered by getting the fundamentals right will drive the business… There’s creation, people making snaps, there’s communication which drives the frequency of use — sometimes people don’t realize, we monetize across all three behaviors.”
Featured Image: David Paul Morris/Bloomberg/Getty Images
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.
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.