Snapchat’s APAC prospects shrink

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Japanese messaging app Line has nearly doubled its stake in Korean Snapchat clone Snow from 25% to 48.6%, in a deal that values Snow at around $207 million, TechCrunch reports.

Snow is broadly popular in Asia, and Line’s investment in the company is sure to deal a blow to Snapchat’s ambitions in that region.  

The Line-Snow combination should propel the two companies onward and upward: 

• Snow will get Line’s camera assets. The Line Camera app, selfie app B612, food-focused camera app Foodie, and makeup preview app Looks will all be given to Snow. Consolidating Line’s and Snow’s photo apps make them more competitive against Snapchat’s parent Snap, which defines itself first and foremost as a camera company.  
• Line’s user growth is languishing. Monthly active users (MAU) have stagnated since the start of 2016 and dropped for the first time last quarter, with MAU falling from 220 million to 217 million from October to December. Snow, on the other hand, is reportedly adding 10 million new users a month — momentum that Line will no doubt look to latch onto.
• Line and Snow are popular in Asia. Line’s four core markets are Japan, Taiwan, Thailand, and Indonesia — 77% of its 217 million users are located in these countries. Meanwhile, Snow passed 40 million to 50 million monthly users in January, up from 30 million in July, with China being the largest market in terms of users, and Japan and Korea following next.
• Snapchat is more absent in Asia. The app has barely made a splash outside of the West. Over three-quarters of Snapchat’s 158 million daily active users (DAU) are in North America and Europe, with just 39 million DAU spread across the rest of the world (RoW). Furthermore, Snapchat’s user growth in RoW markets was flat from Q3 to Q4 2016.

As aversion to advertising continues to grow and as ad-blocking adoption increases across the globe, publishers and brands are turning to immersive video — namely 360-degree video, augmented reality (AR), and virtual reality (VR) — to win back some of their lost market share.

Immersive video can provide the impactful, emotion-driven storytelling that’s needed to capture the attention of consumers and cut through the saturated ad space.

Already, brands across numerous industries have seen significant success. For example, Hong Kong Airlines’ 360-degree ad was 35 times more effective than the same traditional 2D ad. Meanwhile, Lionsgate’s Blair Witch VR campaign elicited a 57% voluntary replay rate. And consumers are confident in the future of immersive video – 63% of US consumers who’ve tried an immersive experience feel it’s the “next big thing” in video, according to a YuMe study.

Dylan Mortensen, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on immersive video that breaks down the benefits of each immersive video format and outlines the ways in which brands and publishers can implement each format into their digital strategy.

Here are some key points from the report:

• Google and Facebook continue to dominate the digital ad space. Excluding Facebook and Google, the digital industry saw a 2% ad revenue decline year-over-year in H1 2016, according to the IAB.
• Marketers are falling behind on the consumer shift to mobile. Consumers in the US spent over a third of their total media time on mobile devices in 2016, while only 17% of advertisers’ digital spend went toward mobile.
• 360-degree video presents an opportunity for advertisers to reach massive audiences, while allowing viewers to engage with ads as they see fit. The format also has the potential to generate longer viewing times.
• AR blends the physical and digital worlds. The global AR market is forecast to grow at a nearly 81% compound annual growth rate (CAGR) from 2016 to 2024, according to Global Market Insights.
• VR is the most complex experience, but also the most rewarding. VR content was found to elicit higher emotional engagement and longer engagement periods than traditional 2D, according to YuMe and Nielsen. BI Intelligence predicts that global VR headset shipments will increase 359% over the next six years, from 12 million in 2017 to just over 55 million in 2022.

In full, the report:

• Highlights the rising popularity of immersive video with consumers and brands.
• Explores why immersive video advertising growth will help publishers buck the Google and Facebook digital duopoly.
• Outlines successful use cases that have propelled brands’ overall reach and retention.
• Forecasts the growth of the virtual reality market.

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
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