The Ultimate Guide to Snapchat Advertising – Webinar Takeaways

Snapchat Advertising

In case you missed February’s webinar on “The Ultimate Guide to Snapchat Advertising,” we’ve consolidated the most important information for marketers to gain a better understanding of how Snapchat ads can impact your business.

Snapchat has over 300 million monthly active users who send 2.5 billion ephemeral (disappearing) photos and videos each day. The platform, which reaches 11% of the US’s entire digital population, allows brands and advertisers to buy Sponsored Lenses, Snap Ads and Sponsored Geofilters in order to reach their predominately millennial audience.

In order to streamline the purchasing process of its ads, Snapchat released their beta application programming interface (API) back in June 2016 and has since formally launched in October 2016. Snapchat’s API will allow third party data partners to integrate with Snapchat’s platform and deliver ads on behalf of brands and agencies, which is Snapchat’s entrance into programmatic advertising.

What is the benefit of an API? Better targeting.

Since the millennial demographic is varied, an API improves targeting. Instead of targeting millennials as a whole demographic, you can target individuals who will actually engage your content. Over time, we can interpret data points and strategize how brands might retarget individuals who engage with ads.

Snapchat has announced a slew of targeting options accessible through its API:

  • Email Matching: Brands can use their own customer database lists to find people when they visit Snapchat Interest-Based Targeting (Snapchat Lifestyle Categories and Lookalikes): Construct ‘lookalike’ models to find similar consumers for ad campaigns
  • Custom solutions such as vertical-specific work flows, weather targeting, dayparting and syncing with TV
  • Targeting by age, gender, location, device/operating system and carrier
  • Snap Audience Match: Proprietary technology that brands can use in order to target users by anonymously integrating first party data and mobile device IDs to be overlaid with Snapchat’s user data
  • Sequential Messaging: Users are retargeted and served with new ads after they’ve engaged with an earlier one *Snapchat has hinted that this will be available. *

If you want to learn more about Snapchat advertising, their API and ad formats, read “Everything You Should Know About Snapchat Advertising” and find more information in our webinar deck below or on our YouTube channel.

SNAPCHAT ADVERTISING KEY TAKEAWAYS

  • In addition to granular targeting capabilities, Snapchat ads offer marketers a unique opportunity to engage with users in a more intimate environment. Furthermore, Snapchat ads are about reducing ad friction, which is why the platform doesn’t use pre-roll and why its ads ARE skippable
  • Snapchat ads take advantage of sound since audio is at the core of its offering, and unlike other video ad platforms (like Facebook),  60% of Snapchat users watch ads with the audio on in comparison to the 85% of Facebook users who watch video on mute.
  • Snapchat ads are actionable since they drive brand awareness. Full-screen Snap Ads and Sponsored Lenses (if you have the budget) have the most potential for influencing conversions. 

Webinar Transcription

Andreas:

Today we’ll be talking about Snapchat and Snapchat advertising options. I’m very excited to have Sabrina Blaustein here with us. Hi, Sabrina.

Sabrina:

Hi, Andreas.

Andreas:

Sabrina, for everybody, is our Snapchat expert here at Katana. Before we jump in, and I’ll interview Sabrina a bit about giving you the ability to learn everything about Snapchat, I want to provide a very quick summary of Katana. Katana is a advanced media solutions partner that works with medium- to large-sized brand marketers directly and also with agencies across the country. Part of our setup is that we are focusing around real-time inventory media buying. That includes all different channels, from paid search all the way down to mobile, programmatic television, video and social advertising, as we will be discussing here today. We’re an independently owned group that came together over three and a half years with veterans from the advertising industry. We have built a very strong what we call a media ecosystem that includes the ability for us to enable campaigns with a very large set of different data components and also our own proprietary technologies built by our in-house team.

Clients work with us via two approaches. On the one side, they have the ability to work with us on a campaign level specific where they take advantage of our technologies. On the other side, we do provide end-to-end partner solutions for agencies and brands, such as WD-40 and others as well. With that being said, I’ll get started here. Hopefully I’ll be able within 30 minutes extract out of Sabrina all the knowledge that gives you the ability to plan and engage around Snapchat from an advertising standpoint.

Very quickly, we do have, as always, the opportunity for you to ask questions. Please look at your GoToWebinar panel that is on the right. You’ll see the question option, the chat option. Just enter your question. We’ll capture them. Then, based on how time permits, we’ll come back to it at the end of the seminar. With that, all right, Sabrina. Are you ready?

Sabrina:

Yeah.

Andreas:

All right. Why don’t we start out by giving our audience a little bit about how you look at Snapchat, what it is, and how it has evolved over time?

Sabrina:

Absolutely. Snapchat was first launched back in 2011 after it was initially a prototype for one of Evan Spiegel’s classes at Stanford. Since then, it’s evolved from just being a photo-sharing app to now being a video-sharing app as well. Granted, all of the features within the app are ephemeral, meaning that they disappear. It has just prepared for its initial public offering as well as developed a API, which is an application programming interface.

Andreas:

Which got us to the point to be here today.

Sabrina:

Yes.

Andreas:

The biggest question people obviously ask is, and I’m one of them, I guess, having just recently added myself into the Snapchat life where I actually am able to talk to my son much faster via Snapchat nowadays than via text messaging. The biggest question advertisers obviously ask themselves is, is this just a tactic or channel that is for younger audiences, millennial type audiences? Would you give us a bit of an understanding of what the demographic profile looks like?

Sabrina:

Yeah. Obviously it really depends on who your brand is and what the objective of your campaign is. But the majority of Snapchat’s monthly users are in that 18- to 24-year-old demographic. Granted that it really depends who you’re targeting. If you’re targeting millennials, then you should probably be on Snapchat. But I recently read something that said that the majority of recent Snapchat signups are people over 25. That’s something to consider. If your demographic is solely middle-aged or older adults, I’m not going to say that you should be advertising on Snapchat. That being said, it obviously never hurts to try. Demographics always change and expand. You might be surprised with how your content fits into this new audience.

Andreas:

Right now what I heard is it’s still skewed towards the younger demographics with I guess a growth pattern for older audiences. Do you project Snapchat to follow suit with what happened to Facebook, where all the cool 18-year-old kids were on it and then suddenly the moms and the grandmas suddenly showing up and they disappear. Is that similar to what you see is going to happen with Snapchat over a period of time?

Sabrina:

I think it’s actually interesting. Snapchat has done a really good job of not stagnating, which we can’t necessarily say for some of Snapchat’s social media counterparts. Every couple months, and really actually it’s been every couple weeks, they’ve introduced new features. Whether it’s new stickers or remaining timely to the user. I think that the trajectory of Snapchat will remain very relevant, just because of they have a really good team of developers, who are constantly strategizing and remaining relevant to their demographic.

Andreas:

What I’ve found personally as well, how I think about this, Snapchat is technically I’ll call it more sophisticated and more difficult for people to use. If you put Snapchat in front of let’s say my wife, she might struggle a little bit longer before she even understands how to use it, which is in Facebook’s scenario it was built much more intuitive from a user standpoint. I think the technical hurdle or the obstacle probably has some protectional layer for older demographics really to enter this field.

The other piece that Evan Spiegel, the CEO and founder, or one of the founders, mentioned the other day was that really the message that he’s giving Wall Street right now while they’re preparing for a public filing is that they’re looking at Snapchat to be the new television format or alternative for the millennial or the younger audiences. His approach is younger audiences do not spend as much time on television. Being true or not true, that’s a different story. However, they will be spending more and more time into these more fragmented, short clip oriented environments like Snapchat is as well.

The big news that recently came out, Sabrina, is everything about API. Snapchat API, which then created this large following and interest of everybody. What does this mean? As always, let’s break it down first. What happened and what did Snapchat introduce with the API?

Sabrina:

Basically what happened was trade desks and media agencies especially were interested in having more control of how they’re buying on Snapchat, just because of the original process was a traditional insertion order. In order to mitigate having to go through that traditional process, they introduced what’s called an API, which is an application programming interface. Basically what this is, it’s allowing third-party data partners to integrate with Snapchat’s platform and deliver ads on behalf of these brands and agencies. This is the first step of them going into the programmatic space, which is, for those of you who don’t know, it’s the automation of buying and selling ad inventory.

This is especially cool for the Snapchat API because they have four different buckets of API partners. They are covering everything from the actual campaign strategy to execution and even creative. They’re offering a lot. I think the biggest takeaway is that by introducing the API they’re also improving targeting, especially to that millennial demographic.

Andreas:

You already mentioned that there are four major buckets of API partnerships. Currently Snapchat has a total of 39 API partners that are I guess distributed if you will against these four buckets. Let’s talk about each of those buckets real quick. Bucket number one, audience match API partner. What is that? What do these people?

Sabrina:

An audience match API partner is in charge of developing the software and platforms to actually improve the targeting. They have a couple options through their API. You can integrate with e-mail matching and which brands can use their own customer database list to find people when they’re actually visiting Snapchat. You of course have your targeting by age, gender, location, device, and carrier. Then you also have your inner interest-based targeting. Something that Snapchat introduced was lifestyle categories and lookalike targeting. Brands actually have the ability to construct those lookalike models in order to find similar consumers for ad campaigns.

Something that they recently developed is a proprietary technology, which is the Snap Audience Match. The Snap Audience Match basically allows brands to target users anonymously by integrating that first-party data over with mobile device IDs in order to overlay that with Snapchat’s user data. You also have your creative partner, which is the newest bucket added. They are specifically in charge of developing the creative and content. But then you also have your ads API partner and creative API partner.

Andreas:

Ads API partner, the way I understand this, correct me if I’m wrong, are technology partnerships, so organizations that have given the ability and the right to develop additional tools from a buying analysis optimization standpoint. Is that correct? Everything about the ad buying component.

Sabrina:

Correct.

Andreas:

Then the third component is about the creative API piece. Obviously Snapchat being a very highly creative, stimulated environment, that they’re consistently looking for new ways of creatively enhance the appearance of ads in their ecosystem. They have a partnership of companies that creatively build … they build technology for creative implementations. Is that correct?

Sabrina:

Yes.

Andreas:

We’ve got four buckets, ads API, creative partner, creative APIs, and Audience Match partnerships. Very good. An important piece is that most of you are going to wonder, does it require you having to work with all 39 data partners? At a high level, the answer is yes. The answer is based on the fact, and talking to people at Snapchat specifically, the main orientation at this point in time is control of the campaigns. They do not want to go, similar to Facebook in the past, do not want to go too extreme in terms of introducing advertising components and features into their platform based on the fear of scaring I guess those millennials away that are very high around ad blocking and other things. That’s one. Secondarily, it’s a highly creative environment. The belief is, “Hey. We need to have advertising that’s really good quality and very creatively oriented.” Again, control.

But, at the end of the day, organizations, agencies, and marketers have the ability to license any of these API solutions or bucket providers for themselves. Organizations like us and other agencies and partners, they will have and should have the ability to take advantage of those APIs by working through one of those 39 partners. That is the near term. We already have received indicators and you read this in the press as well that over the course of the next 12 months that those 39 API partners will expand quite a bit and creating a much easier access in order to run Snapchat ads into their platform.

You already mentioned a bit about targeting. I think this is where it gets really cool, because it’s again another new terminology in some new type of targeting abilities that haven’t been out there that are now available. Can you talk to us one by one around what are the targeting capabilities that Snapchat offers?

Sabrina:

When you’re looking at it from a high-level perspective, you see their targeting as reaching millennials. But that’s not necessarily the case, because you’re targeting individuals who are actually engaging. Those people might not actually be in the audience persona that normally interacts with your brand. Over time, you can obviously interpret these data points and strategize how brands might eventually re-target these individuals who are engaging with their ads.

I want to talk about Oracle, just because they recently announced a partnership with Oracle’s Data Cloud. This is important, because no one is leveraging what Oracle has to offer. Now brands, through Snapchat’s API, can actually tap into Oracle’s Data Cloud’s pool of 110 million households, $2 trillion in consumer spending, and access to over 1,500 brands. I guess the big takeaway here is that Snapchat’s able to determine if offline activity or purchases are influenced by the ads on its platform. Eventually this will translate into more advertising dollars. That’s something that is really promising and one of the biggest features for Snapchat advertising, especially since no other social media network is currently using Oracle Data Cloud. Although, networks like Facebook are using things that are relatively similar.

Let’s just talk about the various options outside of the Data Cloud. Of course you can do your standard targeting by age, gender, location, and device type. You can also target by e-mail matching. This just basically allows brands to use their own customer database lists to find people when they are actively visiting Snapchat. You also have interest-based targeting. Interest-based targeting taps into Snapchat’s lifestyle categories and lookalikes, which just gives brands an opportunity to build those lookalike models in order to find similar consumers for their ad campaigns. You also have custom solutions, such as vertical specific workflows. You can target based on the weather, dayparting, and you can actually sync with what’s happening on TV.

I think one of the big things too outside of the Oracle Data Cloud is Snap Audience Match. This is a proprietary technology that brands can then use in order to target users anonymously by integrating that first-party data and mobile device IDs and then overlay that with Snapchat’s user data. There’s a lot of opportunity there.

Something that I recently heard about was that Snapchat was hinting at sequential messaging in which users would then be re-targeted, served with new ads based off the ads that they’ve engaged with earlier. An example of this would … Snapchat being able to re-target individuals who had interacted with a sponsored lens.

Andreas:

Very cool. A whole new set of I guess targeting options that they haven’t been available in other platforms. It’s something for marketers to think about. Let’s move on, Sabrina, around data and reporting, which is obviously a critical component about the viability of using Snapchat as an ad channel. What do you see in terms of what they offer? How can things be reported in terms of accountability of a campaign, and so forth?

Sabrina:

Since the trade desks and media agencies wanted that hands-on experience and ability to optimize campaigns on their own, the Snapchat API has a web-based dashboard. It reveals actually a wealth of information. You can see the number of views, how much your campaign spent, how long the videos were watched, and other relevant, realtime reporting. You can also see things if you … We’ll talk about this later. But if you’re using a snap ad with attachments, which is a deep link, you can see how many people actually were swiping with your ad. Those are some really important KPIs to know, because that’s how you’ll basically adjust your campaign going forward.

Andreas:

The next piece that I wanted to focus on is just to make people aware and give them some understanding of all the different ad units that are available, since we’ve talked now about the targeting ability. Why don’t you take us I guess through the first one that is out there? You list here specifically sponsored lenses. Why don’t we talk a little bit about that? That is probably one of the most well-known ads out there that people love to play with.

Sabrina:

Absolutely. Sponsored lenses are actually the most… They’re the best performing out of the three ad units, the three ad units being sponsored lenses, sponsored geofilters, and Snap ads. Sponsored lenses, for those who aren’t active on Snapchat, are best for national campaigns to bolster an image as well as launch new products. During the beta test, we saw Gatorade actually leverage this.

I think an important takeaway here is that whatever you’re projecting on your sponsored lens has to be indicative of who your brand is. For example, Gatorade, they emulated a football post-victory Gatorade shower. That’s very in tune with Gatorade as a brand and what they offer. That’s just something to keep in mind. Other notable brands that have utilized a sponsored lens are Taco Bell as well as the Peanuts Movie. I think the Taco Bell sponsored lens might actually be the most famous lens that we’ve seen in the past year.

These are actually very challenging to execute, just because of they require a team of developers and creatives to actually develop and code those lenses. That’s a process that can take a couple months. These are by far the most expensive ad unit. You’re looking, it’s around $450,000 per day Sunday through Thursday, and then the price tag reaches $500,000 for Fridays and Saturdays. There’s an estimated price tag of $700,000 for holidays like the Super Bowl.

Andreas:

Anything else you have around sponsored lenses you wanted to add?

Sabrina:

Yeah. I just wanted to talk about the growth of sponsored lenses. They’ve grown from 10 million to 30 million. They’re securing the spot as the platform’s most popular advertising tool. This is just because users will interact with this ad type for about 20 seconds. I think something that’s really important to note about this is that the term “play” is often referred to interacting with these, especially with this type of ad format, which isn’t something that you would necessarily share that sentiment. You don’t share with a Facebook ad. People don’t see a Snapchat sponsored lens as disruptive because they’re enjoying the time that they’ve spent with it. That’s why there’s this monumental opportunity, because people genuinely enjoy being on this ad format.

Andreas:

That’s why I personally love Snapchat so much, because these ad units are so radically different than what we’ve seen in the past. Now with them using APIs, opening it up and then providing this realtime programmatic ability to purchase, I foresee this to be a major, major growth and focus advertisers will have. Obviously with this ad unit the price mark is on the higher end. It doesn’t apply to everybody. But we do project and foresee that sponsored lenses will also create these type of targeting opportunities in terms of geo-targeting, in terms of specifically audience matching, and others. We will see I guess more of a slicing and dicing of this option as well, which then would bring down the price.

As a marketer that does not have let’s say $500,000 for a Friday sponsored lens in their budget. Stay close on this particular one. Check in with us throughout, because there will be dynamic changes specifically on this one that we project. Anything else you wanted to add?

Sabrina:

Yeah. I think especially with the sponsored lens people don’t mind having their sound on. I recently read a statistic that’s 85 percent or so of Facebook videos are watched on mute, but it’s kind of expected that you’re going to watch a Snapchat ad or interact with a Snapchat ad with the sound on, especially if it has the voice manipulation. I think it’s important for advertisers to understand who they are as a brand and who they’re marketing to and just really leverage that opportunity.

Andreas:

Okay. Let’s move on to the second ad unit that you featured, which is the sponsored geofilters. One of my favorite ones from a standpoint of collecting them as I travel throughout the world. Tell us a bit of what it is, how it works, what are the advertising options?

Sabrina:

Historically geofilters were bought on local basis and you just had a defined four-quadrant area. From there, you could, depending on where you were and the time of day, it could be as little as $5. There was a lot of opportunity for smaller brands to use this. Since then, that’s evolved to buying this out as a national campaign, a chain campaign, a shared spaces campaign, and event campaign.

Just a quick overview of each. A national campaign works best for when you’re trying to generate awareness at scale, so aligning this with big events or holidays. A chain campaign is if you’re a retailer like Nike or Adidas and you want to specifically share messages that are relevant to your brand. Then you also have a shared spaces campaign. You see this a lot with sporting events at colleges, where they’ll have a filter that has the school’s mascot. Then, of course, you have your event campaign. Any major music festival, you can leverage that opportunity and send a message through an event geofilter.

I think something that’s cool about geofilters is that, while the cost is a little ambiguous, they’re about a fifth of the cost of a sponsored lens. That margin in price difference, you get the biggest bang for your buck. They’re reaching 40 to 60 percent of daily Snapchatter in the specified region. There’s a lot of opportunity there.

Andreas:

Even if somebody doesn’t use the filter, the geofilter, it doesn’t necessarily mean they don’t see it. They actually do see it as they swipe through all the different options of the filters.

Sabrina:

Absolutely.

Andreas:

There’s the application that you get statistics on now, and then there’s obviously also the swipe through that is almost like free brand exposure that you get. A question about the pricing. What’s the variance? Where does it come from?

Sabrina:

As I mentioned before, Snapchat’s very ambiguous with their pricing model. We do know that it ranges around a fifth of the cost of what it would be for a sponsored lens.

Andreas:

But it does depend on the location that you’re trying to target. It will vary based on the audience. Is that correct?

Sabrina:

Yeah. It takes into account, just like I said, the time of day, how big of a space you’re targeting. Those are some important key factors in determining your price.

Andreas:

To our audience, it’s important to note that with the API Snapchat has declared to almost make themselves part of the entire advertising ecosystem. Coming from a place where Sabrina was talking about, ambiguous, not transparent in terms of pricing, becoming part of a programmatically-led buying mechanic automatically creates some price controls and some transparency around the price. As it is just in the process of rolling out, and we will do a follow-up webinar on this particular topic in the next few months, we do expect, as we have seen it with programmatic television, as we have seen it in video ads even, that there will become a much more stabilized and well-known pricing structure that advertisers can plan around. Anything else around geofilters that you wanted to mention?

Sabrina:

That pretty much covers it. I think another important, I would say the most important ad unit would be snap ads. I’ll go ahead and talk about that.

Andreas:

Absolutely.

Sabrina:

Snap ads, they actually just introduced deep linking. Initially snap ads would offer up to 10 seconds of a full-screen vertical video ad. Now you have options to ad these interactive elements. You could have a snap ad with attachments, snap ad that leads to an app install, a snap ad that leads to a web view, one that leads to a long-form view. Then you also have the option of leading to an article.

I think especially with snap ads versus any of the other ad formats is it’s notable to mention that these ad types have up to two times higher visual attention in comparison to other platforms like Facebook. You also have two thirds of snap ads play with audio. Audio is, as I mentioned earlier, I think one of the competitive advantages that Snapchat has, their advertising formats have over other networks, just because people are okay with hearing what the ad has to say because it’s not deemed as disruptive.

Andreas:

If I can pause you here for a second. This is, when you look at the different ad options, this is specifically for direct-response marketers. Probably the one that will provide the highest accountability and metric that many digital marketers are familiar with. This is the only unit where you can have a, “click through” activity and/or where you can have an install count to an app. There is a chance that you can measure it through the typical digital marketing KPIs via the snap ads.

However, I want to caution everybody that we’ll believe that Snapchat will generate the customer leads, the ROI of a sale when it comes to transactional, and other kind of hardcore KPI. We have, in our experiences in our campaigns we have not seen those two come to fruition. We always encourage all our clients and our marketers to look at this more as a early engagement metric versus a conversion metric. Let’s move on and still stay in the snap ads in terms of I guess the pricing and the options.

Sabrina:

Snap ads, like I said, they recently came out with their deep linking feature, which is just really important because of now that gives users an opportunity to take their engagement to the next level and they can actually engage with a swipe up. Snap ads with attachments will actually receive five times the swipe up rate versus the average click through rate of other social platforms. That’s a really promising metric. Again, you have to understand that Snapchat, the orientation of their ads are really to increase and scale brand awareness. This ad will cost you an estimated $10,000 per month. But again, that’s not an explicit, defined …

Andreas:

At this point in time.

Sabrina:

At this point in time. Yeah.

Andreas:

Got it. Marketers should estimate around $10,000 at the minimum if they want to engage around snap ads. Is that correct?

Sabrina:

Yeah. Absolutely.

Andreas:

Then all targeting abilities apply here, as you had mentioned earlier?

Sabrina:

Yes.

Andreas:

Great. We’re good here? Why don’t we move on and talk about the biggest question people have, very likely, is what makes sense today? For whom does it make sense today to advertise? Let’s start with the latter question. Is Snapchat a medium or channel that makes sense for a medium, call it geographically, regional type of advertising at this point in time?

Sabrina:

I really think it depends on which ad unit you are approaching. If you’re going to go with the geofilter, absolutely. If you are targeting a specific area, geofilters are obviously the way to go. If you have the budget and you are a national brand, a sponsored lens will get you that brand awareness, especially among that millennial demographic. Then, if you are just trying to really drive engagement, I would recommend going with a sponsored lens or a snap ad with an attachment.

We’ve seen this done really well with major publishers in magazines that are offering these exclusive articles. We’ve also seen this done with that cross platform with television. A couple years ago, back in 2014, the HBO show Girls actually did this by … They were offering exclusive content on their Snapchat platform that basically was inviting and trying to get people, enticing people to then later watch the show. We also saw I believe it was the MTV Music Awards. They actually announced some of their winners on the Snapchat platform. There’s a lot of exclusivity that has to do with Snapchat. There’s just a lot of opportunities if you’re a big or a small brand.

Andreas:

Let’s summarize this. I see some of the questions already coming in. In summary, what we have seen and what we advise our clients is if you are call it a medium regional advertiser and marketer, Snapchat is for you under the following circumstances. If you are, first of all, trying to show up innovative, I think is the first one. Are you an innovative advertiser? It’s not about early mover opportunity here. It’s more about do you want to show up in an innovative fashion in a more brand, richer environment in front of, and that’s the second point, in front of a much higher millennial type audience. If you ex out on both of those, meaning that you’re going after baby boomers, you’re going after generation X-er type, probably less of an environment.

The third point here is also we always recommend have at least a minimum of $30,000 in this execution to give yourself a chance not just to do one shot but give yourself the chance to do multiple. Call it multi ad units, multi month type of executions. If you are able to fit this into your budget, into your media plan, I think Snapchat makes a lot of sense. We have seen organizations actually get really stimulated internally as well by going through the process. It is, to Sabrina’s point, a very native-rich type of advertising opportunity versus a push advertising opportunity. It gives you the chance to even rethink your brand and tell your story in short snippets in a highly relevant way that we have never seen before.

We have taken ad campaigns and ad units into other mediums, as well. You can even extend the creative components into your Facebook. You can extend it into your Instagram, into the Boomerang functionality that Instagram has, and you can even go as far as putting into rich ad media units as well. There’s a lot of ability to rethink about your brand. That’s why we like it. Again, only for the right advertiser. But when you go through the process of creating ads, it actually can be used in various different functions.

Let’s look a little bit into what’s there to come. I already mentioned that we’re still early here. It’s not for everybody. At the same time, also, Snapchat will become much more transparent, much more I guess projectable or it can be better estimated. What besides that do you see is going to happen with Snapchat?

Sabrina:

Early projections by eMarketer were estimating that Snapchat revenue would reach about $1 billion by the end of 2017, which would ultimately be making up about two percent of the social network’s revenue dollars in the United States. I think that, while this is still relatively small, the evolution of Snapchat, it’s since 2011 shown a lot of maturity and saw significant growth. Snapchat’s also pursuing a … they’re moving from their revenue share model for premium publishers to an upfront license fee model in which Snapchat would then retain about 100 percent of ad revenue on their Discover platform. Even this transition is really showing the direction that Snapchat wants to move towards.

In terms of things that, hurdles Snapchat needs to be wary of is they just really have to be able to understand and resolve the integration with key tracking partners. With DoubleClick or Atlas, they really need to expand this targeting to include those major giants like LiveRamp. Without tracking integrations, consumer leads can be attributed to the social partner. A lack of multiple ways to blindly transfer that data will likely eliminate several potential partners right off the bat.

Andreas:

For me, also, an outstanding question is, is Snapchat going to remain to be the ad channel that is highly attracting only the large spenders? I’ve been talking about smaller budgets. But, at the end of the day, will they have the ability to really, “democratize” their channel to any type of marketer? That’s probably for me the biggest outstanding question that I have. Then, as with all these social media platforms, how long does Snapchat remain hot?

There’s obviously the concern that with the copying of their functionalities and their features into other platforms. Instagram was obviously a prominent one. What I heard last week, even WhatsApp started integrating filters and storylines. There’s no IP protection that Snapchat has around any of these features. It will remain to be seen if it’s going to stay hot and is going to keep attracting the millennial audience or will it attract the more larger demographic that’s currently out there?

Sabrina:

Just to add to that, when Snapchat did introduce the snap ads with deep links, that was around the time when Instagram actually started introducing the ads in between Instagram stories. That’s really a kudos to Facebook for remaining relevant and being quick to basically mimic what Snapchat’s doing. I guess we’ll really see how Snapchat will sustain their growth and compete with other major networks.

Andreas:

Okay, Sabrina. Thank you, already. Let’s just … Let me look real quick at some of the questions that we’re facing. One second. The most dominant questions seem to be all about who does advertising on Snapchat make sense to? Which is probably something we projected to have here. Let me start, Sabrina, and you can add in here. I do personally feel, especially if you’re a smaller advertiser with smaller budgets, that the most I guess attractive vertical that Snapchat advertising has a lot of potential for and what we have seen is around physical or event-based activities.

We’ve been working with brick-and-mortar retailers that obviously have geographical fences around their stores that if you reach the outer limit of the stores in order to draw them in for a stop-by, we see that. We have done conquest campaigns actually around geographical locations of competing stores. In this case, it makes sense, again, all under the filter of does it fit the millennial audience? The other one that we have seen to work really well around engagement is when it’s event-based. Sabrina mentioned earlier the holiday component. But it could be any type of sport events, concert, venue around a concert, even marathons, so sporting events. Any of those type. If your brand is related to those, it makes a lot of sense.

Just to give you a tangible example of how powerful the API is now in this environment. For us at Katana, working through the API on the ad targeting site has a very large advantage, because we have something what we call the auto-trigger technology that we’ve built where we can overlay any type of let’s say sporting event and location of the sporting event in order to identify where can we put ads in front of people that are relevant to our marketer? In this case, a sports beverage company.

With now Snapchat opening the API and expanding that here shortly to individuals like us directly, we will be able to offer this type of automatic evergreen ad run into the Snapchat ads platform as well. There you can see how third-party technology innovations can be applied into a Snapchat environment just like it has been applied into banners, video, mobile, and so forth. Anything else you want to add in terms of who this would be currently relevant from the marketer side?

Sabrina:

No. I think you pretty much covered it.

Andreas:

Okay. What does the recent announcement of third-party data mean for advertisers?

Sabrina:

This practice isn’t necessarily anything new, especially for social media platforms. Actually I just want to, before I dive into this, I want to mention that Evan Spiegel about a year ago actually denounced the third-party data targeting. As they’re preparing for their IPO, he realized that it’s necessary. What this means for advertisers is that enabling third-party data is ultimately more conducive for granular targeting. This is important because third-party data and offline purchasing data can be then used to create effective segments for audience targeting. It’s just a really important practice that should be integrated into social media targeting.

Andreas:

I don’t think we have time for one more. With that, thank you, everybody, for attending. We hope, as always, that you are able to take this learning, apply it in your discussions and in this particular case in your planning and into your curiosity. We do expect to do a follow-up on this, as Snapchat will evolve, will become more available to everybody, will make more sense for everybody from an advertising side. In the meanwhile, please feel free to reach out to us at info@katana.media for any questions you may have. For all of you that participated, we will be submitting to you this presentation so you have it as your reference and you can use for any of your discussions internally. Thank you very much, again. I hope to hear from you soon. Talk to you. Bye bye.