Snap’s first quarter may have been something of a rough ride with the $2.2 billion loss — but that doesn’t seem to be slowing down the firm’s social commerce ambitions.
The Seattle-based social media network and self-described camera company grabbed some headlines this week with its acquisition of Placed, a Seattle-based startup focused on tracking consumers’ locations via smartphones and using that information to power mobile ads.
The acquisition may go to support Snap to Store — a data product that allows Snapchat to track sales from the digital to real world environments — but that service can only make use of Snap’s own data.
Placed allows Snapchat to analyze its performance against rival services like Facebook and Instagram. According to reports, Placed brings in data on millions of locations.
“Over the past 12 months, Placed has measured more than $500 million in media spend to store visits, across thousands of campaigns and hundreds of partners, cementing Placed as the leader in location-based attribution,” the company wrote in a blog post. “By partnering with Snap, we will do even more.”
Snap makes the majority of its revenue from mobile advertising and is clearly trying to break in on the Facebook/Google dominance in that area by showing its ad network to be more effective. The move, however, is a bit surprising, given Snap CEO Evan Spiegel’s feelings on online tracking.
“We really care about not being creepy,” Spiegel said during the advertising festival Cannes Lions in 2015, in conversation with Cosmopolitan editor — now Snap board member — Joanna Coles. “That’s really important to us.”
Will it work — especially since Snap is coming off that rough patch? It is early to say, but as Karen Webster pointed out in her commentary this week, Snap has always been an easy target to misjudge — and an early rough patch isn’t necessarily indicative of anything (Facebook had one too, and now has a market cap pushing $500 billion).
“Snap didn’t invent a new camera — okay, there are those video specs which no one seems too enthusiastic about — but they identified a number of frictions that prevented millennials, most particularly, from engaging with their friends online via existing social networks. Creating that experience was about replicating the things that friends valued most when communicating face-to-face: privacy, non-permanence and the ability to be authentic and honest in what was said — and use a better wheel, called the mobile device, to make it better. Doing that allowed them to refine a better wheel for advertisers too — the ability to create entertaining TV-style advertising that consumers always enjoyed watching but just didn’t anymore since they are abandoning television.”
The take-away? Keep an eye on Snap — it isn’t reinventing the wheel, but it sure is refining it.