If someone (Facebook, let’s say) offered US$3 billion to buy your company, would you have the courage to turn it down if you thought the time wasn’t right? Well, I’m glad to go on record saying, “No, I sure wouldn’t!”
But Evan Spiegel, CEO of Snapchat, apparently has the right stuff. At least, we’ll know how right his stuff is as soon as 2014, when Snapchat will reportedly be more willing to consider acquisition offers. Will the instant-messaging app that’s so popular with teens be worth even more in 2014 for an acquisition or in valuation for an IPO? Or will suitors and investors have their eyes on different platforms?
Numerous media outlets have reported information from sources close to the potential transaction confirming Facebook made a roughly US$3 billion cash offer for Snapchat and was rebuffed. The heart of Facebook’s interest in Snapchat lies in the app’s appeal to teens (who enjoy, among other things, the “privacy” afforded by the ability to send photos and messages that are automatically deleted in seconds). Facebook itself has acknowledged some waning interest among teens in its own platform and is mindful of the future. Its own Snapchat-like effort, an app called Poke, has stumbled.
For hoteliers tracking social media platforms, the lesson isn’t necessarily to rush in and create a Snapchat strategy (though several retailers have already blazed the trail with Snapchat promotions). The confidence the upstart app displayed in turning Facebook down, however, is a good reminder for hotels and hotel brands that there are vibrant players out there beyond Facebook. Snapchat handles an astonishing 350 million messages per day and recently surpassed Instagram for volume of photos shared, at more than 200 million per month. And while the Snapchat demographic is young, it’s not only teens. The Pew Research Center’s Internet and American Life project reports 26% of all cell phone owners between the ages of 18 and 29 are active Snapchat users. Those are early brand adopters who are useful for hotels to get to know.
What’s more, while younger teens certainly aren’t decision-makers when it comes to bookings, many hotels and hotel brands are courting that market with brick and mortar amenities such as teen spaces and clubs in order to win over family travelers. A savvy hotel brand could do well to integrate short Snapchat promos targeting this audience while they’re on property. Users could be incented to send a snap to a hotel Snapchat account and in return would receive a coupon sent to them valid at the snack bar or ice cream stand.
I still would have taken the US$3 billion, but hats off to Evan Spiegel, and here’s hoping it’s a snap decision he won’t regret.