(Snapchat CEO Evan Spiegel.Lucas Jackson/Reuters Pictures)
Snapchat thinks it has better ads than television, and way better ads than other digital video competitors, according to the Snap S-1 filing.
In the filing, Snap tells the story of how it set out to create an "engaging, creative, and fun" ad format for its mobile app.
First, Snap looked at its digital-video competitors and concluded that the existing video ad options were horrible. Here's how the company described it:
"Two of the most popular forms of digital video advertising at the time were pre-roll horizontal video advertisements and in-feed horizontal video advertisements. Pre-roll advertisements played before the content that a user wanted to watch, leaving users feeling like they had been blocked by an advertisement and frustrated that they had to wait to see what they had selected to watch. In-feed advertisements were less obstructive, but they weren't full screen and users often scrolled right past them — just like a banner advertisement on a website."
So the two dominant forms were lacking, according to Snap. But the company found some light in TV ads, which its community of users enjoyed the most "because it was part of the experience, especially when the advertisements were funny, creative, and entertaining" — which sounds suspiciously similar to the ad product Snap wanted to create.
TV, but for young people
TV is where Snap saw an opening.
The demographic that loves Snapchat is also the demographic that is watching less TV, according to Snap — so if the company could recreate TV ads on mobile, it could score big.
"We wanted to figure out how to capture the entertainment and creativity of television advertisements," Snap wrote.
However, Snap made a few changes from TV ads. First, the ads were "vertical video," meant to be viewed when holding your phone vertically. Second, they were skippable to give users the choice of whether to watch them. (To be fair, YouTube pioneered skippable online video ads years ago with its TrueView ad format.)
Like TV, Snapchat showed ads only when users chose to watch a series of videos with sound — a Story. Ads appeared amid the videos, except in Snapchat you could skip them.
Snap declared its ad product, with this formula, "as good as television."
Up and up
But Snap wanted to make its ads better than TV by "using some of the unique features of smartphones and Snapchat."
In the S-1, Snap went over the two main ways it thinks its ads improved on the TV experience:
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Swiping up. "For example, a user who views a Snap ad about a new product can swipe up on the Snap ad to buy the product instantly from the advertiser's website without leaving the Snapchat application."
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Targeting. Snap takes context into account to serve up the ad most relevant to the user.