Snapchat Is Changing Its Revenue Model; Marketers Go Straight To The Platforms

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A Snappy Twist

Snapchat is planning an overhaul of its revenue model by paying media companies a licensing fee instead of a rev share on ad sales. The messaging app has been informing publishers of the change for the past month, anonymous sources tell Recode’s Peter Kafka. Facebook and Apple have each experimented with paying flat fees to content producers, but this change would put Snapchat more squarely in line with the TV revenue model. Bear in mind, Snapchat just hired former Viacom exec Jeff Lucas to lead global sales and the company clearly sees broadcast potential as a selling point for its expected 2017 IPO. More.

Tell Mama

Marketers increasingly are “partnering” directly with Google and Facebook separately from their agencies to gain platform expertise, writes Jack Neff for Ad Age. Platforms don’t face the same pressure to deliver as an agency, and despite being the biggest media sellers in the world, marketers don’t view them as sales reps. At a time when agency trust is low and marketers need their hands held more than ever, the platforms are taking advantage – because, well, they can. “Ten years ago it would have been impossible for me to have in-depth relationships with NBC, ABC, CBS, ITV, country by country,” said Keith Weed, Unilever’s chief marketing and communications officer. “But technology loves scale. It doesn’t see country boundaries.” More.

No Guarantees

More broadcasters are making their upfront inventory available through programmatic pipes, Digiday reports. Through automated guaranteed deals, buyers can automate the direct IO process and reserve inventory in the ad server. The process allows broadcasters to supplement their sales on digital platforms, while advertisers benefit from more granular targeting. Supply-side platforms are evolving to make automated guaranteed easier to execute, but the buying process is still nascent and advertisers often don’t get what they paid for. “The publisher sales team and operations team [need to] become more strategically aligned, and the industry [must] adopt a standardized means of verifying priority in the publisher waterfall,” said Trevor Mengel, director of programmatic product at Horizon Media. More.

Scheduling Live

Sometimes live streaming is just too spontaneous. Facebook rolled out an API that lets broadcasters schedule their live feeds so users can plan to tune in. For now, only verified pages can use the tool. Upon scheduling a broadcast, networks automatically publish a post to the news feed that gives their followers the option to receive a notification before a broadcast begins. The update gives networks the obvious opportunity to advertise their live broadcasts beforehand, and Facebook the benefit of drawing more eyeballs to its shows through that advertising. More at TechCrunch.

The Hot Seat

It’s hard to overstate the importance of the NFL to the TV industry. Aside from the Macy’s Thanksgiving Day Parade, NFL games usually represent every single one of the 30 most-watched time slots for fall broadcast television. CBS, ESPN, NBC and Fox each rely on pro football games for a significant, double-digit percentage of overall viewers. Which explains why the market has reacted with fear and trepidation to football broadcast audiences unexpectedly dropping 15%. Pivotal Research Group senior analyst Brian Wieser sent out a note saying “our biggest takeaway is that viewing declines of NFL Football are significant relative to both the sport of football and TV more generally, and that declines are relatively widespread among different groups of people.” Not a very actionable or optimistic diagnosis. Expect far more anxious takes if NFL numbers haven’t ticked up by December.

Stuck In Traffic

Some may have been surprised to hear that Yahoo traffic ramped up after the Sept. 22 disclosure over a major email account data breach. “We’re working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends,” CEO Marissa Mayer said in a statement on Yahoo’s third-quarter earnings. But is that loyalty? The news coverage likely reminded many people they had Yahoo accounts, and others probably returned to change their passwords. More at The New York Times.

But Wait, There’s More!