Why advertisers are excited about Snaps new gaming platform CNBC

Snap made a slew of announcements, which includes a new advert-supported gaming platform, at its first companion summit Thursday because it casts a much broader internet for advert revenue. Although the bulletins additionally covered a new ad network, advertisers say the real compelling opportunity is in gaming.

Snap has proven popular with its young audience. Onstage Thursday, CEO Evan Spiegel claimed the company reaches 90 percent of 13-to-24-year-olds in the U.S. But what has been less clear is how Snap's revenue will grow as its audience growth has sputtered.

One way is making an attempt to get its customers to apply the app even more, which gaming need to assist with if executed proper. The mobile video games marketplace become anticipated to hit $63.2 billion in2019, according to research from gaming, esports and mobile market analytics firm Newzoo. Snap's market cap had risen with the aid of about $600 million Friday to about $15.5 billion.

Advertisers will have the capability to buy non-skippable, six-2d video ads on video games like "Bitmoji Party," an unique sport that shall we users compete as their Bitmoji avatars. The agency will soon also roll out 0.33-birthday party games.

Although advertisers were still curious on some aspect of the game integrations, they were eager about the gaming platform's ability to raise engagement in an area of Snapchat that's actually ad-friendly. It also seems to offer brand-safe opportunities, advertisers said.

For Noah Mallin, head of content and experience at media agency Wavemaker, the gaming component is compelling since he said Snap needs to find engaging places for its user base outside of messaging, which is popular but also "really isn't an advertising-friendly space," he says.

What's yet to be seen is how the ad experience will be designed. Mallin said Snap should make sure the ads aren't too interruptive. He added the gaming space has tried out constructs like being able to watch one full video ad in exchange for an extra life or the ability to play ad-free for the next several rounds.

Details are not clear yet on brand safety measures inside the gaming platform, but advertisers stated it appears probable to have friendly areas for brands.

"The tone of it seemed to be very logo-friendly and very brand-safe," said Meghan Myszkowski, VP of Social Activation in North America for media corporation Essence. But she stated her organisation nevertheless needed greater details. "We'll look into that earlier than we recommend it," she stated.

The new announcements in gaming as well as augmented reality — like a partnership with Photomath that will allow users to point the Snapchat camera at a math equation to see the solution appear within the camera — indicate a focus on keeping people on the app longer, said Ilan Ness, chief strategist at digital ad agency Taktical.

"You'll note that the company proudly touts its active user base and the age demographic, but they consistently seem [to] overlook the time spent in the app, which is probably not that great," he said in an email. "These updates are a step towards increasing the time spent on Snapchat, which is exactly what we as advertisers need in order to effectively run ads. We need extended periods of attention."

According to data from digital market intelligence company SimilarWeb, in February 2019 in the U.S., individuals spent just over 45 minutes on the Snapchat Android app on average, compared with nearly 53 minutes on the Facebook Android app and nearly 22 mins on the Twitter Android app.

Simona Marmina, senior director of social for media business enterprise Mindshare, echoed the desire for more information round brand safety but said the gaming platform appeared promising.

"They manifestly made it clean they have a bonus compared to other even natural-play gaming structures, within the sense that they may be a network already hooked up, and a variety of people use it to talk to their friends," she said.

Morgan Stanley analysts said in a research note they see the mobile in-game advertising as a big opportunity, but say it will be challenging to execute. Research analysts said Snap's challenge will be creating scalable ad units that aren't disruptive to a user's experience. Where a game like "Words With Friends" monetizes well since it's turn-based and creates natural periods to show ads, researchers said Snap's first six games don't appear to be "turn-based." That "could limit ad impression opportunities … and monetization," the research note says.

Also, analysts say if Snap scales its games business, the upside might be limited by the fact that they would have to give 70 percent of any revenue generated to the game developers — using a figure it refers to as the industry standard split.

Let's block commercials! (Why?)

//www.cnbc.com/2019/04/05/why-advertisers-are-excited-about-snaps-new-gaming-platform.html
2019-04-05 18:24:06Z
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