The road to Snapchat’s IPO

Since the formal public launch of Snapchat’s IPO, there’s been great media attention paid to the better than expected opening. Many have wondered whether the stock is worth its price and the debate shows no signs of slowing. However, what we do know is that in the months leading to its IPO, Snap Inc. proved exactly how a company can actively lead to a more successful IPO launch. Let’s take a look at some of the tactics used that led to an IPO that beat most expectations.

Proving you are more than just your core product…

Spectacles
Last year, it came as a surprise when Snapchat, an ephemeral messaging app known for its disappearing messages and augmented reality lenses, launched a wearable video camera called Spectacles. In addition, the company rebranded to become just Snap, and announced globally that they are not a social media company but in fact, a camera company. From there, they started selling Spectacles through pop-up vending machines they called “Bots.” The limited capacities of these activations proved to be effective, as people lined up to try it out. To suffice the demand for Spectacles, the firm opened a pop-up store in New York for a longer span of time, a new pop-up in California and made them available online.

Snapchat Games
During the holidays, Snap launched selfie lens filter games, which allowed users to not only take photos of themselves but also interact while playing a game. These filter games have also been offered to advertisers – Kraft has tried using these sponsored lens as an online activation.

Another offering that Snapchat had under its sleeve were interactive games on Discover. Brands like Under Armor and Gatorade have joined in this wagon and tried out these new options. These games provided a refreshing and interactive avenue for advertisers to try, and definitely upped Snapchat’s game against their competitors.

Customized Filters
Their new personalized Snapchat geofilters have also been all the rage.  Now, Snapchat lets users make their own geofilters for important events, which has been extremely successful in the wedding department.

Innovative Marketing…

Exploiting New Media Channels
In a sea of social media channels all fighting for advertisers’ cold hard cash, Snap has dug its way in to creating its own niche. In addition to the collaborations discussed above, the latter part of 2016 saw Snapchat branching out even more. They began partnering with traditional TV channels for a different form of advertising. A couple of examples include SNL and The Bachelor, both of which debuted Snapchat exclusive shorts in the last few months. Their news blog portal, Discover, also partnered with several major news channels like The New York Times.

Improving Demographic Reach
Snapchat has always been known to be an app targeting the millennial and younger generations. However, a recent study conducted by eMarketer claims otherwise. In the last quarter of 2016, the number of Snapchat users aged 45 and above have seen a steady incline.

Did it all work…?

All these features were churned out by Snapchat, starting in the middle of last year down to the few weeks before its initial public offering. The first day of its IPO release saw a rise of 40% in its stock price, with an additional 11% growth the next day.

Although this surge in stock price has declined in the past couple weeks, all the noise seems to still be revolving around Snapchat. Many will argue that these steps lead to an artificially inflated initial opening. Maybe so, but we can say that in conclusion, Snapchat’s strategy leading up to its IPO was a success. The major issue facing the firm now is how they will maintain this success.

 

Snapchat

Snap Inc.

Kraft

Under Armor

Gatorade

New York Times

eMarketer