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Though AR hasn’t demonstrated the world-changing capabilities that were touted in its circa-2017 hype cycle, it’s finding success in specific areas. Those include enterprise productivity and brand marketing, both of which were examined in recent ARtillery Intelligence reports.
Zeroing in on the latter, one company leading the way in providing – and generating meaningful revenue from – AR marketing is Snap. Congruent with its “camera-company” label, it made an early commitment to social AR lenses and continues to double down on the technology.
In fact, of all the players cultivating consumer-based AR products and business models, none have achieved traction of Snap. Though social AR competitors like Meta and TikTok have greater global reach, they haven’t achieved the AR usage and revenue that Snap has.
This includes 6 billion AR lens engagements per day, among other metrics. But what are the lessons and takeaways? What’s Snap doing right in terms of product and platform development? This is the topic of a recent ARtillery Intelligence report, which we’ve excerpted below.
Evolutionary Steps
Snap’s AR success can be broken down into a series of stages. It all started with seeding consumer demand and cultivating behavior through interactive lenses. And it did this by letting AR piggyback on familiar user activities – in this case, media sharing and status updates.
Snap first did this with lenses that it created in-house – including whimsical and now-infamous selfie adornments such as dog ears and rainbow vomit. Seeing the success of those AR lenses, Snap was emboldened to take AR to the next level: a creator platform. Lens Studio was born.
With this platform, Snap was able to then scale up AR development and broaden its use cases through the crowdsourced creativity of far-flung developers. And it continues to attract them through an ever-broadening set of features for creating, promoting, and monetizing lenses.
The scale and creative breadth that resulted have driven even greater lens usage. That user demand in turn attracts more exposure-driven lens creators. This virtuous cycle has brought Snap to the lens-leading position it enjoys today, including 6 billion daily lens engagements.
To put that into perspective, it’s the equivalent of one lens engagement for every human on earth, per day – exceeding any other AR product. Snap also boasts 250 million daily active lens users, which is about 75 percent of its overall users – the highest ratio among AR providers.
The Camera Company
All the above has led to the real endgame for Snap: ad revenue. Brand advertisers continue to be attracted to the scale that Snap has achieved with its AR lenses. Beyond sheer reach, brand marketers are drawn to AR’s creative capacity and dimensional demonstration.
Stepping back and looking at this entire AR evolutionary sequence and “virtuous cycle,” much of it flows from Snap’s focus on AR. The technology is emphasized in the company culture, public comments, and business goals to a greater extent than any other company we track.
To be fair, Meta’s broader commitment to AR, VR, and the metaverse is greater. But when it comes to consumer-based social lenses, it’s a central focus at Snap. This is deeply rooted in its “camera company” DNA and can be felt in its corporate culture and throughout its ranks.
But to make an important distinction Snap isn’t keen on the metaverse to the degree that Meta (and the rest of the inhabitable world these days) seems to be. In fact, Snap mostly shuns the m-word with the thought that it’s a distraction from its core mission that’s ill-defined and overhyped.
Snap would rather maintain focus on what it’s done all along – cultivate AR products and revenue. In the long term, this means priming demand and developer skills around AR’s endgame: Smart glasses. In the near term, AR lenses fuel Snap’s core ad business and are bearing fruit today.
We’ll pause there and circle back in the next installment with more lessons from Snap’s AR lead. Meanwhile, read the full report here.
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