Snapchat made a name for itself as a cool gadget. It lets teenagers send exploding videos to other users. That way, if the video is too racy it cannot be resent to people the video was not intended for. The company went public a few years ago, but that doesn’t mean the business model works. Shortly after its IPO Snapchat realized it could not make money with its current business model. It had to rapidly grow revenue or cut costs.
To grow revenue the company had to grow its user base or amplify engagement. It chose the latter. In March Snapchat ran an incendiary ad for a game called “Would You Rather”. The game posed tough questions to its participants. The choices the Snapchat ad gave were “Slap Rihanna” or “Punch Chris Brown.” Brown pleaded guilty in 2009 to assaulting Rihanna during an argument when they were dating. Snapchat users questioned whether the company was tone deaf to domestic violence or simply dumb. Rihanna clapped back immediately and things have gone downhill for the stock and the company ever since.
