As you’ve probably heard, stock of Snap Inc took a pounding last week as it announced its first quarterly results since going public. If you want to know all the details, it’s all over the internet or you can read a comprehensive review here.
The purpose of this article is to focus on is information that didn’t come out in the quarterly report; that Snap is about to expand its advertising opportunities to select Asian markets starting with Singapore this week (w/c 15 May).
Why are they finally launching ads in Asia now?
The simple reason is that Wall Street is piling on the pressure and the shares tanking. They need to increase both its user base and its revenue per user.
On the first point, clearly Snap can only monitise people who are actually on the platform, so launching ads in other markets won’t help grow its user base. However it will help with the second point. Right now global revenue per user stands at a paltry $0.90 globally compared to Facebook at $4.23. One clear way to increase that is to start putting ads in markets where they currently do not and revenue per user is zero, such as all of Asia.
What is good about advertising on Snapchat?
Assuming that platform fits into the overall connections / communications strategy, there are three key considerations I think of when planning channels of distribution:
Content: Snap has created a unique content experience for its users that is vertical, mobile and has a distinctive creative treatment that sets it apart. This means brands can’t just stick a TV ad on Snapchat (YouTube and Facebook moan about this but still take the ad dollars). Production money has to go into creating something that looks and feels native to the on platform experience. If done correctly, that means fully viewable vertical video, or massive UGC opportunities through sponsored lenses and sponsored geofilters which have proved a huge hit in other markets.
Context: Snap ads and the Discover section in particular offer great context. It is literally the glossy interest magazine for the digital age offering a carefully curated collection of publishers that reflect the various interests of young guys and girls such as fashion, food, tech, sport that are (slightly) modified for each market. No fake news. No ads being top and tailed with baby photos or unsavoury live videos. Sponsored geofilters also offer supreme context in terms of location
There is also now the opportunity to target demographics by leveraging third party audience segments through their partnership with the Oracle Data Cloud (in US only for now). This helps for those brands still hung up on demographic targeting, but also provides more meaningful inputs such as past buying behaviour.
Quality: Snap came under criticism when it first launched its ad products for the lack of metrics and verification. However the last year or so has seen them partner with a host of measurement partners. Everybody is aware of the reporting problems at Facebook last year but less so of the challenges Facebook and all feed based ads are having with meeting viewability standards. Snap ads occupy the full screen with sound on and in the case of sponsored lenses and sponsored geofilter, are fully opt in. Word from other markets is they score very well on key viewability metrics.
Brands are increasingly seeing the key indicators of advertising quality being linking to sales and data collection. With the soon to be launched ‘Snap to Store‘ feature, brands will soon be able to track footfall attribution of not only people who use a geofilter but of friends who saw someone else use a geofilter in the past week. Brands can already collect data through website links and attribute video via DCM.
Will marketers in Asia care?
Now that Facebook are focused on wiping Snapchat off the face of the earth through copying their AR camera first strategy and have rolled out a stories like product across all their platforms (with Instagram stories already surpassing Snapchat globally) it would be easy to dismiss Snapchat in Asia.
I don’t think marketers in Asia appreciate just how ingrained Snapchat is in the daily lives of millennials in the US with the average user spending 25-30mins p/d on the platform. This shows the potential it could have with wider adoption. However to succeed in Asian markets, it needs to offer users a utility that other platforms can’t. This could mean local publishers on Discover, more local and culturally relevant geofilters and lenses, but it also needs to get local influencers spreading the word that with Snapchat, they are in their ‘circle.’
My concern for Snapchat here is that when Instagram Stories launched in the US, Snap was already the go-to platform for live ephemeral moments and had scale with millennials; that wasn’t the case in Asia. Hard facts are scarce but despite Snapchat now figuring on many markets in Asia’s GWI reports, Asia hasn’t really warmed to Snapchat. Anecdotally I’m seeing and hearing that people are using the platform less or totally giving it up in favour of Instagram Stories, particularly in Singapore. I understand it’s a developed market with the high connection speeds needed to run Snapchat, but it’s also a market where big brands don’t heavily invest. I’m not sure there is either the budgets or the audience…
Snapchat isn’t going to offer the reach of other platforms. It is going to require investment in made for platform creative. However if you’re a brand with global content to repurpose, or you have a physical point of distribution or event you want to generate talkability and potentially footfall for, it could be worth trying out.
I see the greater near term opportunity in Asia being in Indonesia and Philippines where despite the comparatively poor data networks, Snapchat seems to have held up pretty well with a wealthy, young and in the know core audience who according to GWI reports spend 3 and 4 hours on social media a day.
If you have Snapchat and live in Singapore, be sure to go keep a look out and see which brands took the bait!