[adotjdotr]

"Snapchat does not have a clear monetization strategy and the content they have is ephemeral. If a snapchat clone came out tomorrow, snapchat wouldn't be as sticky. Snapchat looks like twitter, the poster child for massive high engagement with disposable content and horrible biz fundamentals. In fact, twitter or facebook could clone snapchat probably super easy and enjoy crazy leverage and synergy. The only reason a 3rd unknown party can't is network penetration."

This is fundamentally wrong. I'm an advertiser and I have seen so many Snapchat campaigns work tremendously well for brand advertisers. All for large established brands who are spending solid amounts with the platform.

Much of the hard work is ahead for the platform in terms of measurement and clear steps to defining and achieving ROI metrics such as awareness, brand uplift all the way through to DR elements such as traffic, leads, mobile installs and conversions.

The company makes huge strides very often updating media packs, incorporating measurement (Nielsen) etc. I expect very smart acquisitions in terms of continuing to drive user growth on the consumer side and build out of measurement / ads API to cater to the agency world in the next 12-18 months.

An IPO for snapchat is some time away but it is building a very real commercial organisation amongst brands, advertisers, agencies, the TV community (look at the viacom deal recently).

Also to your point here:

"FB raised 16B in a horribly botched IPO."

You can't say a company raised $16bn and had a horrible IPO. This really doesn't make any sense irrespective of all the ratchets and clawback clauses (none of which will keep any FB exec up at night let alone the CEO). Look at FB today, you should be kicking yourself if you had the chance or even thought about buying the stock at $17 when it was being shorted like crazy by Wall Street.

[vonklaus]

i agree, you make some compelling points. i would be interested to know more about how big a market the adv/data piece is and how yoh use it. i was wrong when i said they don't have a clear moneyization strategy. I should restate what i think now: it is still not clear to me what strategy would support the growth required from an investment of this magnitude demands

however, like pg said about whatsapp acq, it was like taking the atomic mass of company. who are you going yo believe, mark zuckerberg, the guy who is betting hos company amd his own money and furure on it after extensive talks, internal fb ops kniwl, and access to WA books, or TC pundits. (clearly my summary, not direct wuote. was video interview, tough to find source)

i do believe still, to disagree somewhat, that fb ipo was botched. point i was making is that facebook was a very strong company (at least rel to SC) and the IPO was indervalued because of scandal and technical errors. even undervalued, a comparative IPO for snapchat would still require a huge increase in real revenue and numbers.

it is a steep climb, if we say FB was $100B and dont adjust for the interference of several problems (glitch, scandal, info leak) snapchat would have to justify real profitability and massive rev growth. maybe they have that, but (advanced apologies for no citation) facebooks revenue indicated by their s-1 filing was 3.7 billion with 0.845B users.

This is a real question not rhetoric: Do you think snapchat can achieve these numbers given 3 years?

[adotjdotr]

I believe Snapchat will not grow in three years to be a one billion user company (I'm happy to be proven wrong here though). I do believe that once the ad product matures in terms of ad formats, measurement, ROI across both brand and DR metrics there will be some strong revenue figures all at the typical 70-80% gross margin you would expect from a software business. So from a revenue POV I expect it to ramp significantly and faster than we would expect. They have raised enough money to build or buy the tech needed for a biddable solution, measurement capabilities and a platform of true scale. I would not surprised if they add a third party solution a la Video on Demand for Snapchat ads to be served onto to increase scale of the platform off the core Snapchat platform to drive more revenue via advertising. Lets also not discount things like stickers etc which have been extremely profitable for companies in the Far East like WeChat.

I do expect the revenue to ramp significantly for FB, TWTR, IG, Snapchat etc over the next 3-5 years based on client demand. In five years time, all the strongest aspects and best practices will really be established by brands and agencies and the ad dollars will subsequently follow. Much of the overall digital budget is moving quickly downstream to social platforms. This pace will quicken over time as all brands will need to spend on these platforms to fulfill reach capabilities. All big brands need to be able to reach millions of users at scale which comes with significant media investment or revenue for these social platforms. We're only four years in and it will be an area I am betting the next 5-7 years of my career on.