As Business Insider’s Alex Health reported on Thursday, Google has looked into buying Snapchat for as much as $US30 billion.
Who knows whether this deal would ever happen? But in the meantime, it’s worth examining what such an acquisition would do for Google (besides keeping Snapchat away from Facebook).
At top of the list: a marriage of Snapchat and Google’s mega global video platform YouTube could help Google make a serious bid for the biggest prize in advertising — the $US72 billion TV market.
Owning the youth video market
YouTube is already a credible alternative to TV for some advertisers. But the addition of Snapchat, which reaches 166 million users a day, could give Google a lock on the daily video viewing of younger consumers.
If ad buyers have any complaint about web video compared to TV – it’s that for all its faults, TV can still rack up big audiences in short bursts. Need to reach 10 million viewers in one night? Run an ad on “Monday Night Football” or “This is Us” and you’re all set.
Snapchat boasts of average daily users sessions of 30 minutes. YouTube users now average 60 minutes a day on its mobile app. Facebook, by contrast, is doing everything it can simply to convince users to spend 3 second watching a video in its Newsfeed.
The combination of YouTube – which reaches 1.5 billion users a month – and Snapchat could give Google an unmatchable daily “reach machine”; a direct pathway to youngsters who log their screen time hours in front of phones and tablets. It’s easy to imagine a specialised Google ad buy that connects brands with the majority of teens and 20-somethings every day, giving Google a legitimate rival to the reach marketers currently get through TV.
In short, Google could lock up the highly-valued young eyeball market. The combo of Snap and YouTube would be like Google owning both MTV and ESPN circa 1993.
The Instagram playbook
There’s also the synergy impact of such a deal. Why has Instagram proven so popular with advertisers, beside the fact that is has a huge audience? Its data, and its back-end ad buying and tracking systems are all tied into Facebook’s. It’s super easy for brands to buy ads on both platforms and track how they perform.
If Google stitched together YouTube and Snapchat’s ad buying infrastructures, for instance, it could help Snap graduate from being a mere test budget vehicle in the eyes of marketers and instead become a standard option that’s always on the Google ad buying menu. Unlike Snapchat, Google already has all the deep relationships and history with major ad agencies and marketers. The payoff of the combination could be huge.
Furthermore, Google could use its newfound clout to dictate the future of web video ad creative, by leaning into 6-second ads that you can’t skip. While Snap users would likely grumble about having to sit through some ads, that kind of move would help Snapchat better cater to marketers that currently grouse about its custom ads requirements.
Beating Facebook to TV
Plus, Google could make this move just as Facebook is trying to train people to lean back and watch video and seek out shows on its platform. That’s not the way most people use Facebook right now.
Snapchat and YouTube don’t need to train people, becuase people go to those outlets seeking content (more so in YouTube’s case, but Snapchat is trying to push beyond communications with a slew of new series).
The more originals shows that YouTube and Snapchat crank out, the more they could use each other’s platforms to cross promote series.
OK, so there’s a whole bunch of ifs here, starting with the fact that Evan Spiegel may never be happy being just another thing that Google owns while he dreams of making drone camera glasses.
Snapchat must also prove that its app has the staying power to continue mesmerising young internet users. A deal that gives Google such a stronghold in such a valuable demographic might even raise regulatory scrutiny. And if the deal did close, certainly, stealing even a big chunk of TV ad budgets won’t pay off the lofty $US30 billion investment overnight.
But a Snapchat/YouTube hookup could prove to be a powerful ad player. And for that reason alone, the potential for such a deal is worth keeping an eye on.
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