Snapchat Touts Geofilters, In-Store Measurement in $3B IPO Filing
February 3, 2017 | Contributed by: Greg Sterling
By now you’re aware that Snap, Inc., parent of Snapchat, has filed for a $3+ billion IPO that could value the company at $25 billion. Pretty good for an app that many people argue was mostly about sexting when it launched.
The S-1 filing showed that in 2015 the company had $59 million in revenue, which jumped to $404 million last year. Fourth quarter revenue per user was $1.05. The company has roughly 160 million daily active users. Snap lost $382 million in 2015, widening to $515 million last year.
By comparison Facebook has 1.2 billion daily users globally, 180 million of which are in North America.
Throughout the document there are explanations and references to Snap’s ad products, including Sponsored Geofilters. The company also discusses how it sells ads, including using telephone reps to promote Geofilters to small business advertisers:
Our direct sales team works with large advertisers and agencies around the world. Many of our content partners, including publishers like Viacom, also sell our inventory. Advertisers can also work with Snapchat Ads Partners like TubeMogul and 4C . . . Our advertising API empowers brands and agencies to programmatically buy, optimize, and measure advertising campaigns in real time . . . Additionally, our self-serve On-Demand Geofilter platform allows everyone, individuals and businesses alike, to easily create Geofilters for local businesses and personal moments, like weddings and birthdays. We also have an inside sales team that helps small and medium-sized businesses learn about and purchase On-Demand Geofilters.
The company is also doing store-visitation measurement (at least for some campaigns). Smart. The following diagram appears in the S-1 on page 113 (“Snap to Store Measurement”):
It’s not clear whether store-visitation is available with every campaign, if applicable. Snapchant apparently works with third parties to measure store visitations:
We partnered with Oracle Data Cloud to measure how advertisements impact in-store sales for CPG companies. A recent study across 12 campaigns found that 92% of the measured campaigns drove a positive lift in in-store sales, with the campaigns exceeding Oracle Data Cloud norms on all key metrics. For example, two home care campaigns drove over $100 in revenue per thousand impressions—a return on advertising spend in excess of 6x.
In addition to highlighting its ad and measurement capabilities, Snapchat promoted “advertiser perceptions” survey data showing that it beat rivals in overall advertiser satisfaction.
Snapchat (nee Picaboo) began at Stanford University as an “ephemeral messaging” app in 2011. Facebook unsuccessfully tried to acquire the company in 2014 for $3 billion.
It’s now a top 15 app in the US (comScore) and second only to Facebook in time spent in the social networking category. Among the major social networks, Snapchat’s clear differentiator for marketers is its concentration of younger users.
While Snapchat has an uncertain outlook as a public company and ad platform, it has been more successful than most of its competitors in building a strong consumer brand. I would assert it’s second only to Facebook (in the industry at least).
But as more channels and social media sites/apps launch or gain momentum and visibility, the question becomes which ones should SMBs pay attention to and why?
Sorry. No data so far.