- Snapchat's redesign separates conversations with friends from a feed of content from professional publishers and public figures.
- The redesign is a bet that Snapchat users care enough to seek out news and entertainment in the app.
- Depending on how users respond, the redesign will have an either negative or transformative effect on Snap's young business.
Snapchat has a problem: it's too confusing for many people to use.
Its solution: a major overhaul of the app's design, that could prove to be either a stroke of brilliance or a misguided effort to placate Wall Street's hunger for growth.
With the redesign, which Snap said will be available to users over the coming days, all messages from friends will be shown to the left of Snapchat's main camera. To the right of the camera will be a so-called Discover feed of algorithmically-sorted content from media partners, celebrities, and other vetted public figures.
By separating all professional content from conversations with friends, Snap is betting that its 178 million daily users will seek out the new Discover section for news and entertainment. Since launching in 2015, Snapchat's Discover hub for media brands has been intertwined with disappearing posts shared by friends.
The risks and potential upsides of Snapchat's big redesign:
- People may not swipe right. Discover partners have privately asked Snap in recent days whether users will be enticed to swipe right from the camera when all of their friends are visible to the left. Snap maintains that its more than 70 Discover partners will continue to produce compelling content that makes people swipe right. The company also hopes that showing celebrities and other public figures to the right of the camera will encourage people to swipe.
- Snapchat has no track record with algorithms. The new friends and Discover sections will both use algorithms to surface relevant content, a system that Snap has no history implementing. Conversations with friends will be ordered by who Snap thinks you are "closest to." The Discover section will sort content based on what you've viewed in the past rather than Facebook's approach of also incorporating what your friends are viewing. But because Snapchat has never sorted content this way, the experience for users could be jarring and not well optimized.
- If people stop looking at Discover, ads become less valuable. Media brands that produce content for Snapchat Discover rely on ads to fund their efforts. If Snapchat users spend more time chatting with friends on the app than viewing Discover content, the app's content business implodes. Snap said in May of this year that 100 million users viewed Discover per month on average.
The potential upsides:
- Snap is better to able target users with Facebook-style ads. Until now, Snapchat has lacked the News Feed-style ads that Facebook pioneered. With the new Promoted Stories ad format, Snap could eventually run targeted ads in the Discover feed that look and feel similar to the kinds of ads that already exist on bigger platforms. Promoted Stories are currently screen "takeover" ads that Snap sells directly, charging a premium price for the ability to target all the users in a specific country. According to source close to the company however, the ads will eventually be targetable and available at auction.
- Advertisers are convinced to spend more on TV-style ads in Discover. Snapchat has long focused its ad business on the roughly $70 billion that's spent on traditional TV spots every year. By creating a siloed area for brands to advertise against more premium content and shows, Snap could open the door for more spending. “This isn’t the thing that’s necessarily going to spike user growth, "4C chief marketing officer Aaron Goldberg told Business Insider. "But what it should do is open the spigot to TV ad dollars." (4C is one of Snap's largest outside ad partners.)
- More people eventually turn to Snapchat as a messaging app for communicating with close friends. The company's long-term bet with this redesign is that people will turn to Snapchat as a place to communicate with close friends, rather than with everyone they've ever met. Separating conversations with friends from publishers is a big step towards solidifying that difference. As Snap VP of Nick Bell recently told Business Insider: “We think that we’re going to be able to optimize the two experiences: One to focus on relationships, and one to focus on interests.”