Snap Inc (NYSE:SNAP) is heavily dependent on ad revenue. A big chunk of that comes from the Discover section of Snapchat. So it’s not a surprise that the company is pushing to boost the numbers from Discover by hiring an industry heavyweight to drum up new media partnerships.
What might be surprising is that Snap managed to lure a senior manager from Apple Inc. (NASDAQ:AAPL) to do the job.
Apple News lost its senior publisher relations manager to Snap in February, where she is now the global publishing manager.
Snap Discover
Snap launched the Discover section of its Snapchat app in 2015. The idea behind Discover is to give Snapchat users access to stories from Snap media partners — these can take the form of articles or videos that are published under channels. Current media partners include outlets ranging from New York Times Co (NYSE:NYT) to BuzzFeed. Both the media partners and Snap sell ads that display within the channels, with Snap taking a cut of any partner ad revenue.
It’s a similar basic business model to the Apple News feed on iOS and Facebook Inc’s (NASDAQ:FB) News Feed on Facebook.
According to Business Insider, Snapchat’s Discover generated $58.1 million in revenue its first year — representing 100% of the company’s total revenue for that year. Last year, it was $149.8 million. Projections have Discover generating $243.2 million in 2017 and $401 million in 2018.
To hit those numbers and grow its ad revenue, Snap needs to bring on additional compelling media partners. It’s also pushing them to create short “show” videos of their content specifically for Snapchat. Like the BBC’s Planet Earth II mini show that hit Snapchat in February. And it has to build relationships with advertisers.
It looks like the company decided to boost its firepower on the publishing partnership front by hiring the person responsible for that role away from Apple News.
From Apple News to Snapchat Discover
The hire actually happened in February, but it was kept quiet until Recode broke the news yesterday. The company brought in Donna Ogier, a manager who oversaw media partnerships for Apple News until jumping ship for Snap.
According to Recode, her new role is global publishing manager.
The hire follows several other related big moves from Snap. In June, 2016, it revamped the Discover section of Snapchat, merging it with Live Stories. And in October, 2016 Snap hired the former New York Post president to run business development for the company’s content efforts.
Apple News had over 100 publishing partners in 2016, up from 50 at launch in 2015 and 18 that had signed on when Apple News was first announced at WWDC 2015. Clearly Ms. Olgier was successful in her role at Apple.
Snapchat Discover had 16 publishing partners in 2016, so there is nowhere to go but up — something that will have to happen if that ad revenue growth is going to happen.
In the lead-up to its IPO, Snap was pushing advertisers to commit to a guaranteed level of spending. To get that kind of buy-in from ad agencies, it had to convince them that it’s user base is growing and that those users are more engaged with the content on Snapchat. That in turn requires more content from more providers.
Hiring Apple’s media partnerships head gets Snap the experience and publisher relationships to make that happen.
And it sends a message to advertising partners and SNAP investors that the company is serious about growing Snapchat Discover into a big deal, a la Facebook News Feed or Apple News.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
