đź‘» Snap gives creators a cut

Tuesday, February 15, 2022 by Robinhood Snacks |
When the Snap ad checks hit [Issarawat Tattong via Getty Images]

When the Snap ad checks hit [Issarawat Tattong via Getty Images]

[SOPA Images / Getty Images]

[SOPA Images / Getty Images]

Yesterday’s Market Moves
Dow Jones
34,566 (-0.49%)
S&P 500
4,402 (-0.38%)
Nasdaq
13,791 (-0.002%)
Bitcoin
$42,700 (+1.49%)

Hey Snackers,

Tesla is recalling nearly 600K cars because of a feature that lets drivers play fart and goat noises outside their vehicles. Regulators said the sounds could pose a threat to pedestrians, while Elon blamed “the fun police.”

Investors weren’t feeling the love on Valentine’s Day: stocks ticked down yesterday as looming rate hikes and escalating Russia-Ukraine tensions weighed on markets. The US closed its embassy in Kyiv, citing a “dramatic acceleration” of Russian troops on Ukraine’s border.

Streak

A new chapter for Snapchat… Snap has had a wild start to the year: its shares plummeted 24% in a single day after Meta’s disastrous earnings earlier this month, before spiking 60% the next day after reporting its first profitable quarter. This week Snap introduced a feature that gives creators a slice of ad revenue — something YouTube and Instagram have been doing for years. The deets:

  • Snap is dropping ads in the middle of Stories (videos that disappear after 24 hours) and giving creators a cut of the revenue. For now the feature’s available only to verified influencers (Snap calls them “stars”), but it will soon roll out widely.
  • Previously stars could make $$$ by receiving tips from fans, teaming up with brands, or winning prizes from the little ghost.

Cash for content… As new users become harder to find — Meta (fka FB) just saw its first drop in daily users — social platforms are focusing less on growth and more on creators who bring their followings with them. Last year Snap doled out $1M a day to top creators to promote its TikTok competitor, Spotlight. Some creators made $1M in two months (Snap ended that promo but still pays out millions monthly). Other social companies have showered creators with cash:

  • TikTok launched a $200M creator fund in 2020. The following year YouTube started a $100M fund and Insta a $1B fund.
THE TAKEAWAY

The Creator Cash Boom is just beginning… Now that creators are seen as crucial to social companies’ success, those companies are racing to build new monetization models to attract them. Beyond generic “creator funds,” Snap, Twitter, TikTok, and Insta aim to help creators sell merch and attract sponsors. In January Insta and TikTok started testing paid subscriptions that let creators charge fans for access to exclusive content. As the $100B+ creator economy grows, we’ll likely see social apps get more creative with creator tools.

Wings

"Lose Yourself"... still slaps. Millions tuned in Sunday to watch the LA Rams beat the Cincinnati Bengals in a nail-biter. While the players battled it out on the field, some of the biggest brands fought for our attention during time-outs. This year’s commercial themes shifted from the pandemic and politics to the future:

  • Crypto’s debut: Coinbase's 60-second spot featured a bouncing QR code and $15 bitcoin sign-up bonus, which the company claimed drove 20M+ visitors to its site before it crashed (while the app jumped from #138 to #2 on the App Store overnight). Meanwhile, FTX and Crypto.com tapped Larry David and LeBron to star in their commercials.
  • EVs go mainstream: GM brought back Dr. Evil and Meadow Soprano to promo its new EV fleet, which includes models from its Hummer, Cadillac, BrightDrop, and Chevy brands (FYI: only two are actually available to buy.) Bowl stalwart Kia and Volvo-owned Polestar joined the electrified action too.

Free bitcoin during the bathroom break… the Super Bowl is one of the few places left to reach 100M+ consumers at once, and brands are paying more every year for that opportunity. The price tag for a 30-second commercial has jumped 3X since 2000, hitting a record $7M this year. Bowl spots are a chance for newer companies like Coinbase to introduce themselves to a wider demo, while legacy brands like Chevy can show they aren't just making your dad’s pickup truck.

THE TAKEAWAY

Commercials aren’t the only option... OG Bowl advertisers like Pepsi and Nike ditched commercials altogether and were still among the most-viewed brands thanks to sponsorship deals (think: Nike team jerseys and Pepsi’s halftime show). Similarly, in-game sponsored brands (think: Bose sponsoring coaches’ headsets) earned $170M worth of exposure this year and generated over one hour of screen time — more than all the ads combined.

What else we’re Snackin’

  • Postponed: The FDA delayed its review of Pfizer’s Covid vaccine for children under 5, reportedly because of a low number of cases in its clinical trial. An updated timeline is expected in April.
  • Blocked: The SEC fined crypto lender BlockFi $100M in connection with launching interest-earning accounts without getting the OK from regulators. BlockFi says that customers are no longer able to add funds to their interest accounts or open new ones.
  • McDash: DoorDash will hike fees for McDonald’s locations that keep delivery drivers waiting (past your Big Mac ETA). Food-delivery apps are notorious money-losers, and DoorDash is trying to cut losses.
  • Avo-crime: Treasure that leftover Super Bowl guac while it lasts: the US suspended all avocado imports from Mexico after a US safety inspector received a threat amid drug-cartel turf battles.
  • Tag: Texas is suing Meta over its old practice of using facial recognition to suggest photo tags. FB quit doing that years ago, but it could be on the hook for hundreds of billions in privacy violations. Meta says the claims are without merit.

Snack Fact of the Day

CoComelon’s “Baby Shark” is the first YouTube video to cross 10B views — more streams than there are people on Earth

Tuesday

  • Earnings expected from: Airbnb, Marriott, ViacomCBS, and Ecolab

Authors of this Snacks own: Bitcoin and shares of Snap, GM, Pfizer, Twitter, Tesla, and Google

Correction: This newsletter has been updated to reflect a correction. We originally misstated that BlockFi planned to close its interest-earning accounts in the US. The company said existing customers of its BlockFi Interest Accounts would be able to maintain their accounts and receive interest as they always have, but cannot add to their positions as of February 14, 2022. BlockFi also said US customers would not be able to open new BIAs. The company added that it planned to register a new product under SEC rules. We regret our error.

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