Will Snapchat be reborn as a worthwhile platform to invest advertising budgets in?

First Story, launched by Snapchat

First Story will allow advertisers to reserve video ads that users (Snapchatter) will see first on a friend’s story, with a potential reach of 5,000 per day, according to the rep. It is expected to exceed 10,000.

Officially launch ads on Spotlight

In 2022, Snapchat began an early test of advertising on its sharing feature, Spotlight. This was reported by Snap CEO Evan Spiegel on its fourth quarter 2022 earnings call. In 2023, after expanding the scale of the test, Spotlight Ads will officially launch its services to advertisers globally.

More than 350 million users watch Spotlight every month, according to the team responsible. All that means is that placements allow advertisers to reach mass audiences.

Snap star plans to introduce Collab Studio

Collab Studio is (so far) rolling out in the US. Brands will be able to collaborate with creators as Snapchat helps brands find the best Snap Stars to achieve their goals. In addition to helping create creative content that can be used in sponsor stories, it also helps determine deals and final results.

It’s also evolving its My AI chatbot, which includes early testing of in-conversation sponsored linking and future content partnerships, primarily sports sponsorships. Eligible events include, for example, the NBA, NFL and WNBA, as well as the XXXIX Summer Olympic Games Paris 2024 and the FIFA Women’s World Cup.

Will the relationship with advertisers take off?

So far, marketers have been positive about these new ad campaigns, and with good reason. However, when Digiday asked marketers, they all said they liked Snapchat but couldn’t find a reason to spend money on it. I have a crush on Snapchat, but when it comes to ad inventory, it’s a different story.

“Snapchat, the mobile messaging app, has traditionally been viewed as a dying platform because of its limited advertising options,” said Martin, head of digital at digital PR agency Tank. – It’s Mr. Harris. But Harris said he’s now starting to think about using Snapchat with his customers, given the new tools.

“First Story has special optional placements that should be especially useful for high-profile launches or campaigns that want broad reach,” Harris said, adding that “50 million potential daily reach in the U.S. alone. More than people.If you can reach that many users, your expectations will increase.You can’t underestimate it.”

Compare Snapchat to other second-tier platforms. Pinterest currently has 463 million global monthly active users, while Reddit has around 500 million. Additionally, according to Harris, placing ads in Spotlight is a great opportunity for brands to reach a broader audience who are more ad-receptive.

While spotlight-based mass reach looks promising, Mammoth Media founder and CEO Benoît Batellet previously told Digiday that advertising products are still on TikTok and Instagram. I answered that it was not good enough. He still says that he’s “(experimentally) used Spotlight with no good results.”

The current situation is opaque

Snap has other challenges as well. How will advertisers notice these new ad placements? If you can’t get noticed, you can’t spend your advertising budget. Admittedly, Snap’s efforts are encouraging and give it an edge over its second-tier rival platform. For example, First Story looks like Twitter’s First View and TikTok’s TopView’s one-time-only video ads, and Spotlight’s ads look like Tiktok Pulse’s profit-sharing advertising program. However, it hasn’t sold enough to break into the market, at least for now.

“The only emails I’ve received from Snapchat so far are updates to their terms of service,” Harris said. He has not received any information regarding the content of the new advertisement. “If Snapchat contacts me and it’s something I’ve never seen before, I would definitely consider it,” he said.

Mammoth Media’s Vatere said Snapchat is pitching big brands right now, and he hasn’t given any updates yet. So, while marketers are generally reacting positively to this update, it’s unclear if advertising budgets will roll in.

Adrian Crust, senior manager of paid social at digital agency PMG, said, “Advertisers are really interested in understanding if Snapchat is really coming back. What kind of measurement capabilities?” Can we really use it in Japan? Can we set exceptions?

The road of thorns where snaps go

Snap certainly has to be cautious now. That’s because it just reported a decline in earnings in its earnings call for the first quarter of 2023 on April 27 last week. Revenue in the first quarter of 2023 reached $989 million (approximately ¥133.5 billion), but in the first quarter of 2022 it was $1.063 billion (¥143.5 billion), down 7% year-on-year. Become.

That’s despite a growing number of 383 million daily active users (up 15% year-over-year). Therefore, there must be a tough battle ahead for Snap to turn active users into revenue. That’s exactly what advertisers need.

It remains to be seen if this Snapchat update will have any material impact on the business of both users and advertisers.

“It’s a good thing to look at ad inventory and the new product is going to help,” said Mammoth Media’s Batellet, adding, “Do you think that’s enough? I’m not sure. But I hope it’s enough. I’m a big fan of Snap, personally.”

He added, “That said, Snap is much smaller than Meta and Google, so I wouldn’t expect much of a change. They’re not in such a tough spot right now that they could be bought. I think so,” he pointed out.