This spring, 20 staffers from digital agency PMG Worldwide huddled, virtually, with Snapchat’s team—piped in via videoconferencing—to learn the intricacies of the popular messaging app, with the platform’s best practices for advertisers topping the agenda.
Over the course of two hours’ worth of training sessions, the social media team at the Fort Worth, Texas-based shop—which has clients like Apple-owned Beats—got an edge on other mobile agencies, getting caught up on the constant stream of Snapchat’s new products and features. Moreover, in the coming months PMG will receive additional coaching and support from Snapchat parent Snap Inc.
This workshop is all part of the new Snapchat Certified Partners program, which the company is set to announce this week on the eve of the Cannes Lions International Festival of Creativity. When it comes to agencies, Snapchat won’t just be flipping the switch on its “Open for Business” sign—it also will be knocking on doors and inviting collaborators in like never before.
“[Snapchat is] in our office sometimes it seems like on a weekly basis,” said Angela Seits, director of social media and influencer marketing at PMG. “We’re very closely connected with them in terms of communication because the platform does change so much, so that allows us to be a little bit quicker and more responsive to how we stay up to date.”
One year after unveiling its ads API at Cannes, Snap is again set to make waves on the French Riviera. Snap execs will meet with clients along the Croisette to discuss the new Certified Partners program as well as introduce slick creative tools, a self-serve buying platform and talk about granular measurement tactics—which will take aim at sizable direct-responsive budgets from large and small advertisers.
Clearly, Snapchat has its eye on app-install dollars—a forward-thinking move, as apps are projected to be a $166 billion category in 2017, per App Annie.
If Snapchat’s presence at the festival for the past two years has been about warming up marketers to the app that mesmerizes millions of millennials every day, consider this year to be about proving that the Venice, Calif.-based company—which went through a buzzy IPO in March valued at $24 billion—is growing up and ready to seriously angle for ad dollars alongside Google, Twitter and most notably Facebook-owned Instagram. It’s incumbent on Snapchat to tackle the surge in popularity of Instagram Stories, which has been copying its Stories feature, lenses and graphics that overlay photos and videos. The rivalry may have contributed to Snapchat downloads falling 22 percent during the first two months of the second-quarter compared to the same period the year prior, according to data released by app-analytic firm Sensor Tower. Earlier, in Q1, Snapchat downloads had risen by 6 percent. Snap declined to comment on the report.
Moreover, during Snap’s first earnings report in May, the app missed analysts’ revenue expectations while year-over-year daily user growth slowed to 36 percent, down from a 48 percent yearly uptick during the fourth quarter of 2016.
“Instagram will remain a concern for Snapchat as long as they’re both hitting the same audiences with the same features,” said DigitasLBi’s Jill Sherman, svp, social strategy. “Snapchat has been largely focused on aging up to meet the reach and scale that shareholders demand. The real test will be their ability to reach down again, to compete with the new platforms like Musical.ly, Live.ly, YouNow and Houseparty that are attracting Gen Z in droves.”
Meanwhile, its ad play continues to forge ahead as aggressively as ever. Over the past year, Snap doubled its number of employees to 2,000 and now has sales teams in the U.S., Canada, U.K., France, Germany, the Netherlands and Australia.
“You really want to help your partners grow and learn,” explained Imran Khan, Snapchat’s chief strategy officer. “We’ve always been very focused on, ‘Let’s not onboard advertisers just to onboard. Let’s onboard them to be successful.’ And as a result, we have been very maniacally focused on measurement, ease of buying that brought in things like the API. Our view is that we have to take a long-term approach.”
That vision starts with taking marketers to school. Snapchat Certified Partners will help more than 25 agencies and vendors, including Omnicom’s Resolution Media, OrionCKB, SocialCode and Adaptly become fluent in Snapchat vernacular. Participants undergo two Snap-led training sessions before taking an online exam detailing ad capabilities, optimization strategies and vertical-specific best practices, among other things. After passing the test, companies receive a digital badge and will partake in ongoing coaching and reviews to remain part of the program.
“Our ad business is still relatively new, so educating people on our ad product, our creative, our measurement system—all of those things will help our advertisers to get better performance,” Khan explained.
Only agencies and tech vendors that buy ads can get the certification, and advertisers will be charged, according to sources, between 10 percent and 20 percent of a media buy. (So if they spend $100,000 on a campaign, for example, they’ll pay a Snapchat Certified Partner at least $10,000). Facebook has a similar agency program called Blueprint, which costs a flat fee of $150, while both Twitter and YouTube have free certification programs. Facebook, YouTube and Twitter also offer customized content strategy services for individual and top-spending advertisers.
While Omnicom and a few larger shops are part of Snapchat Certified Partners, it’s also aimed at midsize firms that may have limited budgets.
Direct response shop OrionCKB put its staff of 30 through Snapchat Certified Partners because it resembled “what Facebook did when they first came out,” explained Scott Briggs, co-CEO and managing partner.
Anthony Koziarski, head of media solutions at Resolution Media, added, “This isn’t something that we can enter into on a self-serve basis—it’s something that we need to do in full collaboration with Snapchat. As they continue to iterate at such a speed, it’s almost impossible to keep up. If you think about what’s happening within the platform marketplace at large, it’s critical for our teams to stay connected to what’s happening.”
Meanwhile, bigger agencies report that they’re now spending more on Snapchat because ad offerings have solidified after having received a peek under the hood.
“This [agency program] is a sign of some stability from them that they feel like they’ve codified the platform enough,” commented Noah Mallin, head of social, North America at MEC and MEC Wavemaker. “I would call it a deep dive where they’ve had members of their API team come and meet with our buying and strategic teams to understand what the implications are for the new targeting and how that fits in with the bigger ad ecosystem.”
Getting advertisers to mirror how consumers use the platform is central to Snapchat’s monetization future. When Gatorade wanted to promote tennis star Serena Williams during the U.S. Open last year, Resolution Media helped design a custom ad unit that let users play a virtual tennis game. All told, users averaged 196 seconds with the game with a 14.5 percent “swipe up” rate.
“Those types of advertisers are clearly fully vested into the platform, and they’re looking for repeat success,” Koziarski said.
Snap reports that 20 percent of ad impressions during the first quarter flowed through the programmatic-like API, so it appears that the next challenge will be convincing advertisers of all stripes to get comfortable with its automated systems. Tech vendor SocialCode reports that its advertisers spent 131 percent more on Snapchat in the first quarter of this year compared to the fourth quarter of 2016.
After testing Snapchat Ad Manager with 20 companies, the self-service platform officially opens today to all marketers, allowing brands with any budget to buy and track ads. Until now, spend requirements have limited the number of brands that could afford to buy ad packages.
“Over time as we’ve seen the platform evolve and [as] that cost of entry comes down, more advertisers are prepared to experiment and take a chance,” noted Resolution Media’s Koziarski.
The auction-based ad platform is powered by machine-learning technology that optimizes against campaign objectives and budgets. For instance, goal-based bidding zeros in on people whose behavior suggests they’re more likely to “swipe up” on an advertisement to download a mobile app or watch a video.
While Snap’s auction isn’t at the same scale as Facebook or Google’s ad tech, “the appetite for experimentation is strong enough to prove or disprove its value in the coming quarters,” said Mike Dossett, associate director of digital strategy at RPA.
Hooked, a mobile app that publishes stories in the form of short text message conversations, has been testing the self-serve platform for a few weeks, specifically targeting high schoolers and college students. The company spends seven figures monthly on Facebook, Instagram, YouTube and Snapchat.
“We had thought about perhaps working with one of the Snapchat partners before there was a self-serve tool, but because of our scale and our process—we iterate through dozens of creative [assets] in a given week—it just was not practical,” explained Parag Chordia, Hooked founder and CTO. “Bringing automation and self-serve to the space was absolutely critical for us to be able to test and see results.”
“The cost per install and conversions are very competitive with our other top channels, so we’re investing more heavily in Snapchat,” added Sen Sugano, vp of marketing at online sneaker marketplace Goat, another early tester of the platform.
A campaign dashboard is built straight into Snapchat’s settings, which could help marketers—many of whom are older than Snapchat’s average user—understand the app’s features. Push notifications can even be turned on to alert advertisers about an endeavor’s performance.
So will opening the spigot to more DR-focused advertisers lead to low-quality, spammy promos? “Some level of quality control would be wise,” advised DigitasLBi’s Sherman. “It could come back to haunt the platform—users could find it disruptive to the experience, and brands could infer that it’s the platform, not the creative, that is to blame.”
RPA’s Dossett was less worried about bad creative, based on similar experiences when Instagram threw wide the ad floodgates a couple of years ago. “Over time, the natural market forces of competition for attention and need for effectiveness drove out the majority of the ‘offending’ players in the system,” he said. “The same will likely hold true for Snapchat.”
Fast-moving ad creation
To that end, in July, Snapchat will roll out editing software dubbed Snap Publisher designed to make video ads in less than two minutes. Advertisers can chop their own videos up into 10-second clips or pick from a library of Snap-designed templates. A piece of code identifies video files to detect when a scene changes to help piece together different clips. Brands will also be able to test multiple versions of creative and then, based on the results, purchase Snap media straight through the self-serve platform.
The bevy of metrics and tools exemplifies Snapchat’s big moves into ad tech and measurement over the past year, addressing marketers’ recent concerns that the app was a black box. The company has deals with 13 data players to measure viewability, reach, verification and a proprietary technology called Snap to Store that tracks how many people went into a store within one week of seeing an ad. Just last week, Snap acquired mobile data company Placed for a reported $125 million to beef up its location capabilities. The acquisition “is a demonstration of their commitment to proving the efficacy of their platform in driving offline impact,” said Dossett.
“After severe deficiencies in the early days, [targeting and measurement] is beginning to approach the depth and breadth of those we’re seeing on other more established, robust ad platforms, but isn’t quite there yet,” he added.
In terms of targeting, all three of Snapchat’s ad products—Snap Ads, geofilters and lenses—are synched up so that advertisers can perform granular retargeting. For example, someone who plays with a branded lens or filter can then be served a series of full-screen video ads.
The race for mobile millennials
Despite all the moves, looming competition from Instagram, Facebook and others could continue to plague Snapchat.
“Instagram has displayed a remarkable ability to mimic or enhance a feature first brought to market by Snapchat, with massive and almost instantaneous adoption from its much larger user base,” said Dossett. “This sets an incredibly high and costly standard for Snapchat’s product innovation so it can continue to acquire new users, but more importantly continue to provide a unique, valuable experience for its loyal existing users.”
Snapchat comes armed with hot-off-the-press research to explain why it’s more akin to a peer-to-peer communication tool than a social network. According to commissioned data from research firm Sparkler, 60 percent of Snaps occur between close friends and those folks are three times more influential than celebrities when it comes to making purchase decisions. Furthermore, 95 percent of participants said they trust recommendations from close friends while 62 percent are swayed to buy new brands from their friends.
A second new study conducted by Greenberg Strategy digs into new granular stats specific to where people use Snapchat. Per the research, 81 percent of Snapchatters open the app at home with another 73 percent of folks using it while watching TV or a movie.
Digging into Snapchat and Facebook’s daily active users by region also shows some intriguing stats for marketers. Sixty percent of Snapchat’s 166 million daily active users come from the top 10 ad markets, particularly in the U.S. and Canada. In Canada and the U.S., Snapchat has 65 million daily active users—equivalent to roughly one-third of the 182 million daily active users Facebook reported during its first-quarter earnings.
At the same time, Instagram’s copycat features have actually helped marketers understand parts of Snapchat, argued MEC’s Mallin.
“The irony is as Instagram has adopted a lot of different elements that are part of Snapchat, it’s actually led to some understanding of things like Stories,” he said. “In a weird way, there’s been this kind of backwards education that’s come out of the Instagram and Facebook adoption of things.”