Snapchat just recently started to include advertisements in its popular ephemeral messaging app, but its advertising strategy is notably different than its competitors' strategies. Snapchat says it has no interest in tricking its users into clicking ads by blurring the line between advertising and organic content created by actual users.
The company's ads are clearly identified as sponsored content, and they aren't placed in users' personal communications, such as "snaps" or chats. "That would be totally rude," the company wrote in a blog post announcing its first ad for Universal Pictures' film "Ouija." "We want to see if we can deliver an experience that's fun and informative, the way ads used to be, before they got creepy and targeted."
The majority of social media platforms purposefully gather as much user data as possible to help brands place relevant and targeted ads. Snapchat calls that strategy "creepy," but the reality is that it can't deliver targeted ads even if it wants to.
"Snapchat is falling back on an old advertising technique -- if you have a weakness, turn it into a strength," says Adam Kleinberg, CEO of interactive agency Traction. "The weakness is that Snapchat doesn't have rich data to collect if they wanted to because the majority of the messages on that platform are visual in nature. And since they have no data, they're doing the best they can with the hand they're dealt -- telling users that they don't collect data because they don't think it's the right thing to do."
Kleinberg says Snapchat could become particularly valuable to marketers due to two things: passion and promotion. "When people are passionate about a brand already -- maybe it's in entertainment or fashion or a brand like Red Bull that people are drawn to -- this is a great platform to be on because people on it are eager to get messages from those brands."
Most brands simply aren't that popular or appealing, Kleinberg says. "Kraft salad dressing releasing a new flavor is not going to have the same success as Eminem releasing a new album."
Snapchat Advertising: Old School Format, New School Delivery
Universal Pictures wasn't the first company to place an advertisement on Snapchat, but it was the first to pay Snapchat for an ad. Taco Bell experimented with the service during the past few months, and it amassed more than 200,000.
The select brands that embraced the platform early are seeing their bets pay off with phenomenal engagement rates. Taco Bell recently told Adweek.com that about 80 percent of its followers open its snaps and 90 percent of those people view the messages in their entirety. It's easy to understand why brands might be willing to overlook some of Snapchat's weaknesses when you compare that success to the low single-digit engagement averages for organic posts on platforms such as Facebook and Twitter.
Of course, as Snapchat attracts more brands that are willing to pay for ads, those engagement numbers could significantly decrease. The company is young and just beginning to evolve into an ad-supported network, and determining performance is a challenge. Brands that consistently attract engaged audiences, however, could want to strike while the iron is hot.
Snapchat also appears to be focusing on linear TV-like ads, which have always fallen under the "spray and pray" category of big media advertising. The 20-second Snapchat spot for "Ouija" is similar to a traditional movie trailer. Measuring accountability for these types of ads isn't easy, but Snapchat brings one clearly unique feature to the table.
Touch as a Game Changer for Snapchat Ads
Snapchat users must keep their fingers on mobile device screens to view snaps in their entirety, and the company's ads work the same way. "The fact that you have to touch the ad to watch it does give a higher indication of engagement," Kleinberg says. "If you don't want to see it, you can just let go."
By eschewing data collection and targeted ads, Snapchat could also solve digital marketing's reach issue, according to Kleinberg.
"Marketers want to reach large audiences and they want to target as specifically as they can," he says. "The problem with that is as soon as you start honing your target, you reduce the size of the audience you reach. By eliminating the capability to target, marketers can buy larger audiences without feeling bad about 'going too broad.'"
For what it's worth, Universal Pictures told MarketingLand.com that views for its first ad were "in the millions," and it doesn't worry about Snapchat's lack of targeting because the vast majority of its users are coveted millennials. Unfortunately, this approach won't work for many brands, and big media campaigns may be the only way Snapchat can drive the revenue needed to justify its reported $10 billion valuation.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.