As Snapchat’s (SNAP) stock continues to tumble, and
investors question its ability to compete with Instagram, the company has taken
steps to improve its advertising metrics. In addition to SNAP’s recent purchase of Placed, a
location-based services company, it has started a metrics program “…that
specifically addresses marketing mix modeling, or MMM, with four data
companies: Neustar Marketshare, Nielsen, Analytic Partners and Marketing
Management Analytics.” One of the major criticisms of SNAP has surrounded its
inability to attract and monetize advertisements. In the digital marketing
landscape, Google, Facebook and others have proven the importance of detailed,
reliable customer data and how it corresponds to better ad placement and higher
revenues.
With SNAP, this program, along with its other acquisitions
and partnerships has two goals: “Increase the likelihood that big brands will
buy ads on Snapchat and attach those campaigns to third-party measurement that
confirms the results of a campaign.” This effort will ideally result in greater
ad revenues, yet from a competition perspective these techniques and data
programs have existed at Facebook, Google and Twitter for years. From an
advertiser’s viewpoint, these metrics programs are about “…measuring sales lift
and return on ad spend (or ROAS) on Snapchat—two key metrics that advertisers
use to make big, broad decisions about their advertising spend.”
At this point in time, SNAP is simply trying to catch up
with its biggest competitors and hopefully convince investors it has a long-term
growth strategy around advertiser. The perception that SNAP has been difficult for
advertisers to work with still exists, and until they can dispel that with
these programs, it’s market share is in jeopardy.
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