Snapchat’s New Data Deal Will Equip Marketers With More Third-Party Measurement

The program encourages big brands to buy ads

Snapchat is looking to increase its third-party measurement.
Illustration: Dianna McDougall

While Snap’s stock price has continued to slip and the company has been under fire from investors uncertain that it can keep up with Facebook and Instagram, the company’s measurement game is expanding to arm advertisers with sophisticated metrics that helps Snapchat compare itself with all other media.

Snapchat is launching a measurement program today that specifically addresses marketing mix modeling, or MMM, with four data companies: Neustar Marketshare, Nielsen, Analytic Partners and Marketing Management Analytics. The new program adds to Snap’s existing 15 measurement partners that vet the app’s impressions, reach, targeting and viewability metrics. The goal is twofold: Increase the likelihood that big brands will buy ads on Snapchat and also attach those campaigns to third-party measurement that confirms the results of a campaign.

Snap backs up its new measurement program with one big stat that’s sure to get marketers’ attention: During the second quarter of 2017, 55 percent of every dollar spent on advertising included some type of third-party measurement. Such third-party partnerships include programs with Moat, DoubleClick, Millward Brown and Oracle Data Cloud (formerly Datalogix) and are typically included in ad packages for the brands who spend the most on advertising.

The new measurement program aims to make Snap more competitive with Facebook, Google and Twitter, which all offer similar MMM measurement efforts that aggregate all of an advertiser’s media channels—including TV, print, digital and out of home—and then zero in on one specific channel to measure how effective advertising was in driving sales.

“It’s Snap in the context of all the other things that the brand is doing,” explained Nancy Smith, CEO of Analytic Partners in explaining how MMM will work within Snapchat. “We measure the effectiveness of their marketing in an ongoing way so that they can inform their planning and decisions of allocating budgets based on how effective those budgets were spent in the past and how effective the campaigns that they currently have running.”

To that end, measurement partners are now 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.

“As marketers have moved from traditional channels to newer, emerging channels, the challenge is, ‘Are they really able to understand the impact of sales driven by Snap or Instagram or something else and bringing the impression-level data and all the spend level?’ Now marketers can get a sense of that,” said Julie Fleischer, vp of product marketing at Neustar. “Any marketer that is spending on Snap wants to understand what the impact on it is. The challenge with newer platforms or walled gardens is how do you bring that in so that you can measure them in the context of everything else without blind spots?”

Neustar measured ROAS for two categories within Snapchat: Soda and movie studios. Per the firm’s calculations, every dollar that movie studios (who are some of Snapchat’s biggest advertisers) put into Snapchat advertising results in a $14.33 return on ad spend. For restaurants, Placed calculated that Snap drove a $10.76 return on ad spend while soda generated a $4.76 return on ad spend.

Meanwhile, Oracle Data Cloud and Nielsen Catalina Solutions report that out of 59 studies that measure offline sales, 83 percent resulted in positive sales lifts.

While Snap is only measuring MMM and aggregate data, Analytic Partners’ Smith said she hopes to eventually be able to measure multi-touch attribution with granular impression data provided by the app.

“Ideally we’ll start with impression-level data that’s viewable and robust based on the different types of ads and then we’ll get more granular details—that would be DMA-level, which is where a lot of the other mediums are provided,” she said.

Snapchat has been pushing hard into location-based advertising lately. Earlier this year, Snap acquired Placed, which is already showing some intriguing revenue potential and Snap has its own proprietary tech called Snap to Store that lets advertisers track how many people went to a specific store within one week of viewing a Snapchat ad. Within that program, Snap is now slicing up data by ad format. Instead of solely analyzing Snap Ads or lenses, advertisers can now measure how Snap Ads and lenses drove foot traffic, for example.

Snapchat is also adding new audience data. It’s upping the number of Snap Lifestyle Categories that brands use to target ads based on what content someone watches from 60 to 90 groups. For example, advertisers have been able to target travel enthusiasts within the app for a while. Now they can fine-tune the targeting to home in on family travelers or frequent travelers.

Third-party vetting

In terms of Snapchat’s claim that 55 percent of ad dollars included third-party vetting, agencies had mixed reactions. Noah Mallin, head of social at MEC Wavemaker said that 55 percent is slightly low for the number of clients who ask for third-party measurement on Facebook, Snapchat and Twitter. For Google, MEC included third-party measurement in 100 percent of its buys.

“The trend is to have third-party measurement, so even if those numbers are around what Snap said or maybe even a little higher for us, over time you’re going to see that inch closer to 100 percent,” he said.

However, multiple other agencies said that Snap’s numbers seemed high for how young the app’s ad business is, particularly since third-party measurement only started rolling out earnestly recently.

“My guess is that Snap’s number would be lower because their measurement offerings are still rolling out,” said Gila Wilensky, director of media activation for North America at Essence. “They’ve done a great job with catching up but I think that they don’t have that same head start from Google, Facebook and others for setting measurement standards—they’re just a little bit behind because they’re newer.”

That said, Wilensky said brands are measuring media with more third-party metrics now than they did several years ago when Facebook, Google and Twitter all built their ad businesses.

“If you look at Facebook and Twitter five or 10 years ago, most people were looking at engagement rate and things like that so the fact that Snap is still pretty nascent with its competitors and is already getting that rigorous measurement off the bat is showing that they’re catching up and doing things the right way,” she said.

Wilensky added that the offline-to-online data play is “a really big deal” and that “it could be a differentiator to win back market share.”

MEC’s Mallin added that Snapchat’s focus on measurement reiterates how the app is trying to quickly build an ad business and ditch its early reputation as being a difficult platform for brands.

“They want to counter the perception that’s probably a bit out of date that came out of their early days, which is that they’re difficult to work with, it’s hard to know whether you’re being effective on the platform,” Mallin said. “Rightly, they’re turning around and saying, ‘No, we want to be as accountable as possible and give you as much information as possible.’”