CFO World

Why brands are increasingly attracted to Snapchat

Mobile native social media platform offers a ‘feeling of intimacy’ that can’t be replicated elsewhere, according to brand owners and agencies

Is Snapchat becoming the new darling of the digital advertising industry?

The company, which recently recorded the tech industry's biggest IPO in years at US$3.4 billion, has come into the spotlight by brands and agencies alike both for its organic content capabilities, as well as growing advertising options. Already, top-tier US companies are reportedly advertising on its Snapchat Discover media platform including BMW, Gatorade, T-Mobile, Sperry, Under Armour and Sony Pictures.

So what’s the fuss? Snapchat is a popular social messaging app which allows users to share pictures, videos, chat and drawings. Originally a platform predominantly used by pre-teens and teens, today it has transformed into the social media player capturing a significant overall audience share.

Snapchat revealed last year it has four million active daily users in Australia and 150 million users globally. As a comparison, Facebook has 12 million local daily active users and its Instagram photo and video sharing platform has 7 million monthly active users.

According to Bloomberg, Snapchat has surpassed Twitter for number of daily active users - 158 million daily users versus 140 million users for Twitter. Recent local data also shows 31 per cent of Snapchat users are aged between 18-24, 28 per cent of users are aged between 25-34, 23 per cent are aged between 13-17 and 18 per cent aged 35 and over.

But arguably, the growing appeal from a brand perspective was the launch last year of Snapchat’s first self-service ad offering locally, enabling businesses and consumers to create their own images, then select an area for them to be applied to Snapchats.

Meaningful interactions

According to GroupM head of mobile, Vanessa Hunt, many of the media agency’s brands have trialled Snapchat for both content delivery and advertising solutions.

“From Lenses for the AFL grand final, to unlocking GEO filters in stores, to the approach of vertical video, brands are embracing the unique features of the platform and more importantly the mobile phone to bring meaningful interactions with their consumers,” she tells CMO.

For Hunt, there are several main benefits to using Snapchat, along with measureable results.

“Snapchat’s advertising proposition takes advantage of native mobile behaviours. The use of camera, vertical video, short snackable content – are all unique behaviours to mobile,” she says. “Although making it hard to scale in the early days due to unique assets, we’re now seeing a shift from brands to create content with a mobile-first mentality to be able to access the previously difficult teen and young adult market.”

Vanessa Hunt
Vanessa Hunt

Hunt sees Snapchat as a formidable competitor, offering the market an alternative, viable outlet.

“Having a third force with Google and Facebook is a good thing to encourage choice, variety and keep the industry moving ahead. It has a different audience to the alternative social media sites capturing the attention of millennial’s – not an easy task,” Hunt says.

“We have seen social media sites go through product lifecycles with huge growth periods, reach critical mass then plateau in terms of usage. Audiences move and products need to remain relevant and useful to the base. Digg, myspace, friendster all had solid foundations but could not maintain relevance with ever increasing fickle consumption habits. Snapchat is not afraid to move and recreate itself to keep growth and often encourage competitors to do the same.”

Hunt says Snapchat’s growing list of utility features will unlock new audiences. Traditional publishers for example, like CNN, National Geographic and News Corp, are using it as a new way to seed content, while event organisers are providing back stage access to events never seen before. There’s also the launch of snap codes (similar to QR codes) to unlock features, websites or content.

“The more uses for a mobile product in terms of utility, the bigger the audience,” Hunt says. “In mobile, there are two reasons to be needed by a consumer – to waste time (fill in down time) or to save time and Snapchat is in a good place to add both at varying audience groups.”

Mighty customer service

Digital marketing specialist, Mark Hayes, cites customer service as another of the myriad ways Snapchat is evolving as a platform.

“By seeing and hearing what the problem is, your customer service rep will be better able to understand the problem and help find a solution,” Hayes says. “Brands are also using Snapchat to create real-time content such as instructional videos and tutorials of their products, as well as teaser campaigns. GrubHub used Snapchat to find a summer intern, while a cosmetics company, NARS, used Snapchat to release a preview of its upcoming Guy Bourdin colour cosmetics collection.”

Brands like the idea of using Snapchat for the real-time stories and the ability to share raw photos, videos and messages makes it more authentic.

“Brands are able to do teaser campaigns of products, showing only a glimpse, to generate interest,” Hayes continues. “A behind-the-scenes look at brands generates interest not just in the brand but the culture of the brand.”

Measuring ROI for Snapchat, however, hasn’t been an easy task since it is hard to quantify with sales, but Hayes says there are ways to measure audience engagement. “You can measure followers, as well as get a Snapchat Score which according to Snapchat, is a special equation combining the number of Snaps you've sent and received, stories you've posted, and other factors.”

Other ways to measure include getting a Completion Rate (the percentage of total viewers that watched a complete story); unique views (how many people viewed each of the snaps in a story; and screenshots (how many people took screenshots of your stories).

KFC takes a bite

One big brand that’s been using Snapchat for some time is KFC. The fast food group was one of the first brands in Australia to launch its own account in 2015, aimed at engaging a younger audience in an unfiltered, authentic way.

“Today, the brand produces organic content, alongside testing Snapchat’s advertising offering – lenses, filters, and one of its newest ad units, webview,” says KFC CMO, Catherine Tan.

Catherine Tan
Catherine Tan


“In January this year, KFC launched its first Snapchat lens, to celebrate the Big Bash League final, as part of its cricket sponsorship over summer. The lens placed a bucket over the user's head, in the style typical of cricket attendees.

“Then in February, we created Australia’s first Snapchat game to engage the target audience around our new Freeze drinks. Inspired by the work from Gatorade and Under Armour in the US, we created a simple game which was served to audiences with Snapchat’s webview ad unit, and rewarded them with an exclusive Freeze filter.”

Tan says the benefits of Snapchat are twofold. “On the one hand, we have the opportunity to speak to a hard-to-reach audience in a very personal way, and on the other hand, the advertising options allow us to test out newer, innovative formats and ways to engage our consumers,” she says.

Tan says Snapchat is being seen as the new frontier for social. “The way in which audiences interact with the platform is completely different, it’s less about content consumption and more about building a relationship with the brand. This makes it an exciting platform to be trialling, and the results we’re seeing are promising.”

New found engagement

L’Oreal Australia has also engaged with Snapchat users for the past eight months particularly with its Maybelline and L’Oreal Paris brands, according to A/NZ head of digital media, Christophe Eymery.

“Snapchat has mass reach on par with Instagram, captures an audience that cannot necessarily be reached in other social media networks and offers an advertising format that can be very engaging for users,” he says.

Eymery sees many benefits to using Snapchat that offer measurable results. “Snapchat was the first to create filters and the opportunity for brands to engage differently with consumers,” he says. “Snapchat skews slightly more towards the new generation of social media users and given that it also offers age targeting for advertising, it gives the opportunity for brands to engage with a younger audience.

“Results are today harder to measure than in other social media networks but Snapchat is still relatively new and moving fast, enabling to audit viewability and fraud with MOAT ad serving since February 2017 for example.”

The challenge for brands is that Snapchat users expect more than traditional advertising, Eymery says.

“Creative in that environment really needs to add value and entertain the users to achieve a positive impact,” he says. “Like for any new form of media it takes time for advertisers to understand the opportunity and learn how to leverage it. As Snapchat’s user base is now larger than Twitter and similar to Instagram in Australia, it is definitely becoming a consideration for brands.”

Eymery reiterates the belief that Snapchat is no longer just for teens and pre-teens, but has new features that see it attracting a larger following.

“It is moving in the news and content environment in Snapchat discover, offering the news outlets, such as E! news and news.com.au, in particular to share their stories in new formats better suited to a new generation of consumers and those ready to embrace their way of consuming information.”

Up next: How Snapchat is shaking up the content game

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Being ‘in the moment’

Globally, many brands are using Snapchat during events to give followers a perspective of being “in the moment”, according to Oracle APAC, marketing and transformation and strategic director, Wendy Hogan. The most prolific in Australia have experimented with organic and paid integrations, mainly testing branded filters, promoting campaigns and showcasing their latest offers.

“These range from new store openings and product launches to publications that use the Snapchat channel to keep up with what’s happening in the Australian media scene,” she says.

“Some brand campaigns use it very effectively to reach end consumers through a boarding pass themed filter, and some publishers have cited numbers in terms of reach and engagement to their stories. Most brands have experimented with Snapchat as a way to reach the elusive younger generation.”

In a world where digital media has often been quoted as not being creative or struggling to produce emotive advertising, Hogan says Snapchat has changed the game in terms of enabling creative, interactive and memorable brand advertising in a digital environment.

“The results can also be incorporated into a more holistic marketing strategy building a one-on-one connection with customers,” she says. “Another great use case is when there are breaking news moments or globally relevant events such as the Women’s March or the Elections. Brands can insert their messaging into the aggregated stories showing the highlights from those events – giving them the opportunity to be there in the moment.”

Authentic dialogue

Creating authenticity is a major reason why brands are embracing Snapchat, according to Ogilvy Sydney lead social strategist, Jennifer Ngai.

“The brands we work with have really embraced Snapchat for two main reasons – the opportunity to have an open, authentic dialogue with the consumers, and to try out newer, tech-driven ways to engage audiences,” Ngai says. “The webview and article formats are particularly interesting for our clients, as they allow us to experiment with content formats which are not necessarily possible through the more established social channels.

“The lenses and filters are a totally unique way to have your brand seen by an audience. The very nature of the way a person interacts with a lens could change the way a consumer views a brand – especially for brands which aren’t necessarily physical or tactile.”

For Ngai, Snapchat is a great example of how both short-form content, such as organic stories, can co-exist with long-form engagements, in the Discover section, in a valuable way for the consumer.

“From a paid perspective, the platform’s advertising options can provide a highly visual, rich engagement opportunity that is both quantifiable in exposure, as well as time spent with a brand which we think only enhances organic work [and vice versa],” she says.

While more brands are becoming comfortable with Snapchat as a new platform for consideration, Ngai admits Snapchat can still be seen as a riskier option for clients because of how expensive the advertising options are.

“From an agency perspective, what this does is force us to be extra diligent with the creative we propose, as we have to be sure that the ROI makes it worthwhile,” she says. “So far, we’ve seen results for our clients which have outperformed even Snapchat’s own benchmarks, and provide a completely different dimension to our overall social media strategies.”

Unfiltered approach

Switched on Media head of social, Tansa Mehroke, also believes Snapchat is quickly becoming a platform of choice for one-to-one engagement.

“Snapchat has historically been used to speak to the millennial audience on a human level. Positioned as a ‘1-to-1’ platform, it feeds the hunger this audience has for raw, unedited and unfiltered video content,” he says.

Mehroke says sponsored geo-filters and lenses have been the pick of the bunch in the last six months for clients, with McDonald’s and Optus among those to get on board. More widely, the industry is moving towards live streaming on social.

“The explosion of Facebook Live and other rivals to Snapchat, such as Instagram stories, Facebook Stories and now, Whatsapp Status, are an indication that unfiltered, live content will continue to grow in 2017,” he says.

What Mehroke is less sure about is how Snapchat will sustain a leadership position among the pack. “Recent data suggests Stories has been slowly eating into Snapchat's market share since its introduction in August last year. The race for all major platforms to own the live social streaming space in Australia will be one to keep an eye on for sure.”

Over at Webling group, most Snapchat triallists to date have been global brands running a mix of unique localised creative or global creative, says creative digital director, Jay Morgan. He sees the main benefit in Snap Ads as that they’re not in-feed ad units with a bounding box around them.

“They are completely native and don’t really feel like ads as much; they use the entire screen real estate,” he claims. “If the brand has opted for a filter or lens ad, then consumers are actively branding their own social feed with your brand, it’s every brand marketer's wet dream. Even if it only last 24 hours a pop.”

But Morgan says Snapchat has a lot of maturing to do. “It’s the youngest social media platform with any real traction and because of the IPO the company is changing how things work on the platform on a daily basis,” he says. “You could say they’re going from their toddler stage to teens in 3-6 months, a process that took Facebook almost 10 years.

“That accelerated product timeline is good for brands because it’s forced Snap to confront some limitations to the platform. Snap fanatics and industry analysts have regularly argued that the quirks and sometimes baffling UI of Snapchat makes is so popular. I’ve never really bought into that and I see these rapid changes as inevitable. The platform is better for it and I think users will appreciate them too.”

Morgan says what makes Snapchat unique is its exploitation of the native device format. “When you really think about it the way most mobile search sites and social platforms like Facebook design, the layout it feels archaic compared with Snap. It still looks like old-school desktop Web design slimmed down to fit a mobile screen,” he says.

Morgan also notes the implications of Snapchat’s recent FCC filing, which stated the company was a camera company.

“That’s very telling about their future intentions as a company,” he says. “In a way, Snap is showing us a glimpse of the future of digital content, even guiding the way. Whether it survives the IPO or not, Snap will have left a legacy on the Internet age forever.”

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