Brief:

• Snap updated its photo-messaging app Snapchat with a feature called Spotlight, which shows a customized feed of user-made videos. To urge people to post videos to Spotlight, Snap is dispersing $1 million a day to those creators through the end of the year, per an announcement.
• Snap made Spotlight available first in Australia, Canada, Denmark, France, Germany, Ireland, New Zealand, Norway, Sweden, the U.K. and the U.S., with plans to add more countries soon. The company is dividing the $1 million pool among Snapchat creators whose videos are seen most frequently, and is monitoring activity to ensure engagement is authentic, according to the announcement.
• Resembling the popular app TikTok, Spotlight uses a ranking algorithm to determine which videos are most likely to appeal to users, based on how long people spend watching the video and how often the video is shared and "favorited." The algorithm also considers negative factors, such as how quickly Snapchat users skipped the video.

Insight:

After years of seeing popular features like Stories copied by other social media platforms, Snap's rollout of Spotlight is a sign of how social video app TikTok is driving the latest innovations in the industry. Unlike other social apps that show a news feed based on people's connections and whom they follow, TikTok highlight videos that are most likely to appeal to viewers. TikTok's algorithm determines which videos are most likely to be shared, and customizes a feed based on an individual's preferences and viewing habits. While Snapchat's Spotlight section for short videos doesn't yet allow much opportunity for mobile marketers to participate, it could help the app keep audiences engaged with features that mimic the ones that have proven popular on TikTok.

As a result of those engaging features, the average TikTok user spends about 45 minutes a day in the app, according to internal documents cited by The Wall Street Journal last year. Recent data indicate the coronavirus pandemic led U.S. consumers to use TikTok more frequently while stuck at home during lockdowns, though time spent with the app started to fall as people returned to former activities like going to work, per a CivicScience survey cited by Axios. Despite the decline in reported usage, TikTok has maintained its No. 1 spot in a ranking of the most downloaded non-game apps for the past few years.

For now, Snapchat's Spotlight section doesn't carry advertising, which is a common practice among social media companies when they test a new service or seek to boost engagement before implementing a monetization strategy. Snap also has rules against videos that sell or solicit products or services, and is asking creators to avoid submitting sponsored or paid-for videos — policies that limit opportunities for mobile marketers to participate in Spotlight for now. However, until Snap opens up ad inventory for Spotlight, marketers may see greater engagement with their ads in other parts of the app as the new video sharing feature gives people another reason to check in with the platform.

Snapchat's introduction of Spotlight comes as the company expands its user base, increases ad revenue and develops more features to support e-commerce. Amid its growth in direct response advertising, Snap last week started offering more software tools to help developers market apps on Snapchat. With more people upgrading to 5G smartphones, Snap and wireless carrier Verizon also began to showcase the advanced capabilities of higher-speed cellular networks by hosting a virtual concert in New York.