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The Snapchat Monetization Problem

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There’s no doubt that messaging app Snapchat is on the brink of something huge.

The user metrics continue to impress, and the app just recently passed Twitter with 150 million daily active users. Snapchat has also vaulted past Instagram in time spent by users, making it the second-most used app by iPhone users, trailing only Facebook.

With a median user age of 18, Snapchat’s business premise is that it allows marketers to tap into the mysterious Millennial and Gen Z audiences that continue to perplex many brands. However, the jury is out on whether the app is delivering on this promise.

There’s now more than $2.65 billion of venture capital at stake that depends on solving the Snapchat monetization problem.

The Snapchat Monetization Problem

Today’s infographic shows the results from a survey of Snapchat users by NewsCred, a content marketing platform. The data paints a picture of Snapchat as an app that engages users, while whiffing on the branded content it needs to generate revenue.

Snapchat Monetization Problem

Courtesy of: NewsCred

In other words, if Snapchat is counting on advertising as its main monetization driver, it is going to need to get more users engaging with branded content. Then, Snapchat must able to prove that to advertisers through targeting, analytics, and other useful metrics.

Snapchat is Getting Serious

In the first half of 2016, Snapchat raised $1.8 billion in its Series F round at a flat valuation of $16 billion.

This says two things.

First, with an estimated $59 million in revenue in 2015, investors are worried about the Snapchat monetization problem. Otherwise, the company’s valuation would have risen from the previous Series E which took place over a year prior.

Second, this war chest of new capital is going to be used to pounce on revenue opportunities, as well as providing better analytics to advertisers.

To the latter point, Snapchat is now making major moves to deliver on the revenue front. The company recently poached a key ad exec from Facebook. The app also launched a revamped Snapchat Discover portal that allows major publishers like Cosmopolitan or BuzzFeed to get in on the action to share ad revenue. Snapchat is also finally getting serious about metrics, and that’s why the company signed with Nielsen to start measuring the performance of ads like a television network would.

Will Snapchat’s revenues ever measure up to its user growth and marketing promise to advertisers? For now, the Snapchat monetization challenge remains, and investors are divided on the company’s future prospects.

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Animation: The Top 15 Global Brands (2000-2018)

This stunning animation shows a dramatic change in the world’s most valuable global brands. Watch tech companies like Apple shoot up the rankings in style.

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Animation: The Top 15 Global Brands (2000-2018)

Time travel back to the early-2000s, and a list of the world’s most respected brands might be surprising.

Tobacco company Marlboro is still one of the top 15 global brands with a value of $22 billion, while companies like Nokia and AT&T also help to round out the group.

Aside from Microsoft, the tech companies at the time were mostly focused on hardware and services. HP was considered a top global brand at the time, and even IBM was still making PCs until the year 2005.

The Platform Revolution

How times have changed.

In today’s animation from TheRankings, you can see how the list of the top 15 global brands has evolved over the last two decades or so.

The visible shift: as soon as Google hits the rankings in 2008 (2:21 in video), it becomes clear that the money is on the software side – particularly in coding software that ends up as a dominant consumer platform.

Shortly after, companies like Apple, Facebook, and Amazon enter the fold, quickly climbing to the top. Here are the final numbers for 2018 in terms of brand value, with data coming from Interbrand:

Top 15 Global Brands in 2018

The Problem with Hardware

What’s the difference between the big hardware firms of old, and the successful ones that dot the list today?

From a business perspective, hardware companies need to have a bold and accurate vision of the future, constantly taking innovative strides to beat competitors to that vision. If they can only make incremental improvements, the reality is that their competitors can enter the fold to create cheaper, similar hardware.

Samsung, which finished 2018 as the world’s sixth most valued brand, is a good example of this in practice. The company has had the top-selling smartphone for every year between 2012-2018 – an impressive feat in staying on top of consumer trends and technology.

Despite Samsung’s success, it remains stuck behind four other tech brands on the list – all companies almost exclusively focused on platforms: Microsoft, Amazon, Google, and Apple.

Why are Platforms so Dominant?

Constant innovation is a good barrier to entry if you can keep doing it – but the platforms have an even more bulletproof strategy: being everywhere at once.

Facebook uses the powerful network effect from billions of people as a moat, and then it buys up-and-comers (Instagram, WhatsApp) to cover even more ground. As a result, competing with Facebook is a nightmare – even if you could theoretically acquire new users at $1 per user at a ridiculous scale, it would require a marketing investment of billions of dollars to make inroads on the company’s audience.

Microsoft owns various platforms (Windows, Xbox, LinkedIn, Azure, etc.) that help insulate from competition, while Google’s strategy is to be everywhere you need to search, even if it’s in your living room.

Because platforms have massive scale and are ubiquitous with consumers, it gives them the ultimate pricing power. In turn, at least so far, they have been able to establish the world’s most powerful consumer brands.

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Meet Generation Z: The Newest Member to the Workforce

As Millennials enter their early-30s, the focus is now shifting to Generation Z – a group that is just starting to enter the workforce for the first time.

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Every generation approaches the workplace differently.

While talk over the last decade has largely focused on understanding the work habits and attitudes of Millennials, it’s already time for a new generation to enter the fold.

Generation Z, the group born after the Millennials, is entering their early adult years and starting their young careers. What makes them different, and how will they approach things differently than past generations?

Meet Generation Z

Today’s infographic comes to us from ZeroCater, and it will help introduce you to the newest entrant to the modern workforce: Generation Z.

Meet Generation Z: The Newest Member to the Workforce

There is no exact consensus on the definition of Generation Z, and demographers can differ on where it starts. Some have Gen Z beginning as early as the mid-1990s, while others see it starting in the mid-2000s.

Regardless, Generation Z is the group that follows the Millennials – and many Gen Zers are wrapping up high school, finishing up their university degrees, or looking to get their first real jobs.

Millennials vs. Gen Z

While generational differences cast a wide net and don’t necessarily apply to every individual, here is what demographers say are some key similarities and differences between Gen Z and Millennials.

MillennialsGeneration Z
Raised by Baby BoomersRaised by Gen Xers
Grew up during an economic boomGrew up during a recession
Tend to be idealisticTend to be pragmatic
Focused on having experiencesFocused on saving money
Mobile pioneersMobile natives
Prefer brands that share their valuesPrefer brands that feel authentic
Prefer Facebook and InstagramPrefer Snapchat and Instagram

Generation Z tends to be more pragmatic, approaching both their education and career differently than Millennials. It appears that Gen Z is also approaching money in a unique way compared to past groups.

What to Expect?

Generation Z does not remember a time when the internet did not exist – and as such, it’s not surprising to learn that 50% of Gen Z spends 10 hours a day connected online, and 70% watches YouTube for two hours a day or more.

But put aside this ultra-connectivity, and Gen Zers have some unique and possibly unexpected traits. Gen Z prefers face-to-face interactions in the workplace, and also expects to work harder than past groups. Gen Z is also the most diverse generation (49% non-white) and values racial equality as a top issue. Finally, Gen Z is possibly one of the most practical generations, valuing things like saving money and getting stable jobs.

You may already have Gen Zers in your workplace – but if you don’t, you will soon.

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