Snapchat – the app loved by teens and young adults is having a tough year. After its much-hyped IPO earlier this year, the parent company Snap had to suffer two bad quarters. Last quarter it made $181 million with 173 million daily active users. It once again missed out its expected earnings and continued to have a slower growth of users. A major concern for its investors as Facebook’s Instagram has so far had a great run.
Tackling the issues head on, Snapchat announced two major updates last week concerning influencers and advertisers.
For the first time Snapchat is working with influencers and providing them verified accounts. Snapchat Official Stories that debuted last year will be open to influencers; so far it was only open to celebrities. One of the biggest benefits for Official Stories is discoverability of content in search results – a big problem for influencers and brands on the network.
The second development is related to brand safety. After YouTube, Facebook and Twitter now Snapchat is providing new manual tools for advertisers that will give flexibility in deciding where their ads will appear in the network.
Brand safety has been a big concern on Snapchat. Earlier this year WPP owned GroupM had raised concerns about “explicit adult content” on Snapchat after advertisers complained.
Moving forward brands have three ways to limit ad placement on the network. Advertisers can remove six types of content from their media buys within Discover and user-generated stories. News is the most notable category. Advertisers can also target user posts and user generated content. These placements cost less than Discover’s premium cost per engagement model.
Both developments are significant moves from Snapchat to keep content creators on its platform and thereby keep advertisers happy. Snapchat has a history of not cultivating influencers like Facebook’s Instagram. In fact Influencer Marketing which is booming in 2017, has shifted to Instagram from last year since Snapchat hasn’t been successful in building a relationship with influencers.
The new move is encouraging but is it late? Or will it be enough to make an impact on the upcoming quarterly results of Snap? There is some good news from eMarketer – according to its latest report Facebook continues to lose appeal among teens and young adults. Snapchat is leading the race but closely followed by Instagram.
For now we will have to wait and see how Snap’s upcoming quarterly results shape out and what impact the new developments lead to.
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