How messaging apps make money: Snapchat vs Line

Mobile messenger apps arguably offer the most intimate and engaged advertising opportunities available to brands right now.

Canadian messaging app Kik and its more conspicuous rival Snapchat in the past 6-9 months have launched product updates and advertising solutions that have helped see their valuations skyrocket; with the latter recently being valued at $19BN. They have cracked the code of monetising their platforms without alienating their users. 

Following the outcry that greeted Snapchat initially asking for $750k USD a day to advertise, brands have recently been flocking to the app due to the opportunities it provides to serve contextually relevant content to 60m under 25’s in the U.S. daily.

However in Asia, messenger apps like LINE, WeChat and Kakao Talk have been offering brand solutions for years. They have impressively built ecosystems that integrate brands into conversations, commerce and communities.

The advertising solutions offered by Asian apps (that were far quicker to monetise their platforms) are very different to the new wave of ad formats that have been created for the in-the-moment video first Snapchat audience.

In this post I’ll cover:

• East vs West; LINE vs Snapchat user experience and ad formats
• Implications for start ups in the next 12 months

LINE – Character Crazy!  

I’ve taken LINE as Asia’s representative as they already have more users than Facebook in Japan, Taiwan and Thailand, embedding themselves in culture through the creation of LINE characters. I’ve seen first hand the Narita express packed with Asians clutching bags containing all sorts of LINE character paraphernalia purchased from the LINE Harajuku store.

A key component of the LINE user experience are the stickers that are used to express users emotions. Initially used by millennials in Japan as part of kawaii culture, stickers now appeal to all ages and interests and are surprisingly addictive! Brands pay to put stickers in the sticker store that consumers can then download and use in their peer to peer conversations. Burberry’s stickers even made it into Vogue! 

Of further interest to brands is the ability to send content to brand followers who have downloaded stickers, linking to in-store through QR codes and their LINE pay micropayment solution. LINE’s product is very much built around an integrated ecosystem with products like LINE taxi, food ordering and their music streaming service in Japan. As such, sticker sales only make up a small proportion of their revenue with the bulk coming from their games portfolio.