As Facebook continues to battle negative news, some advertisers are intently looking for alternative platforms that can deliver similar demographics and market coverage. Snapchat seems to check that box.
As we discussed last month, Snapchat rules with Gen Z, who comprise the vast majority of its nearly 85 million users. Snapchat’s growth is slower than some of its competitors this year, but its desirable demographics (teens to 34- year-olds) and innovative ad products, as well as the inherent higher privacy and data security standards, make it a well-liked partner for ad buyers. Brands, especially those in the direct-to-consumer (DTC) space have found it even more cost-effective since it introduced its advanced Pixel targeting capabilities earlier this year.
Despite years of consistently rolling out innovative ad products, Snapchat’s ad revenue in the first quarter was $662M, somewhat lower than forecasted. The company attributes the quarterly miss to lower ad prices due to the use of programmatic advertising and has not slowed down its ad product development. In fact, many marketers are excited about its continued improvements in augmented reality (AR) and, especially, in the latest direct response ads products. In 2018 alone, Snapchat introduced Shoppable AR lenses, Shoppable Snap Ads, Shoppable Story Ads and most recently, Collection Ads, underscoring to efforts to attract shoppers and ad dollars.
Whether Snapchat’s efforts deliver the desired boost in revenue and user growth remains to be seen, however. Current eMarketer forecasts suggest that marketers expect to spend the same amount on Snapchat next year, as in 2018. And, while they appreciate the efforts, marketers still look for that mass audience reach that only Facebook delivers currently.