Snapchat Can’t Right Its Advertising Ship

Cynthia Bord

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Digital marketing began in 1994 when AT&T launched a digital ad banner, amid the dot-com bubble where internet-based companies were rapidly expanding at an unscalable rate. Nearly 30 years later, everyone has a computer and a phone, with access to the internet at their fingertips.

With that, digital marketing by technological giants like Facebook, Google, and Snapchat brings in a large portion of overall revenue.

Advertising at Snapchat alone accounts for a staggering 99% of all company revenue.

Technology companies earn money from ads by taking a part in a sale of a product or per click on the advertisement.

Digital advertising is a primary form of marketing for millennials.

Digital advertising in the form of web banners or product placement has been around for almost 30 years. For millennials (Snapchat’s primary user base), this is most of, if not all, of their entire lives. Over time, digital marketing has evolved into product promotion by popular web creators, short videos, or stickers used in geotags on Snapchat.

Marketing in the form of billboards just doesn't appeal to the consumer anymore. The audience includes people rushing to and from work on a busy highway, limiting exposure to the market. Billboards require picking up the phone to call someone (and that’s any millennial's worst nightmare). To call someone, use your voice, hear their voice, and have to connect on something you need, especially in a sales situation? That might be the worst thing imaginable for a millennial's to-do task.

Digital advertising on platforms like Snapchat is accessible and easy to consider on the user’s terms.

In their homes, on the couch. Getting all the information the user needs to see if they want to buy a product on the company’s website or ratings for the products on Google.

Users get customized recommendations based on what they usually buy. Most importantly, not having to talk to anyone, in particular a salesperson who only gives the customer needed to make the sale. The user doesn’t have to cut through the bullshit of sales-speak and can focus on what they want and need in a product.

Technological Innovation

As a part of Snapchat’s push to attract more users and retain the users they already have, Snapchat is working on technology like Augmented Reality.

Augmented Reality (AR) is the digital, visual elements that are applied to the physical world.

75% of Millenials and Gen-Z’ers use Snapchat at an average of 30 minutes per user per day. New technology keeps users interested and moves with the users as they become more technologically sound. As users become more intelligent, the technology they use must as well. If not, tech giants risk losing a portion of their users to their competition who will.

The pandemic has shown customers and users that leaving the house is not just unnecessary but a hassle.

Why leave the house to purchase clothes or groceries when contactless delivery is available?

Even after vaccine approval, contactless delivery for anything and everything has been proven to stay. It offers almost no communication necessary with someone you don’t need to know, nor want to know, especially through small-talk. Snapchat’s digital marketing allows the user to buy everything that is needed in the comfort of their own home without having to talk to another human.

Problems with Dependency

Despite its user-centric focus, Snapchat doesn’t come without its problems. Their Ads, and thus their primary driver for revenue, are highly dependent on Apple’s iOS updates. Snapchat’s CEO Evan Spiegel attributes not meeting revenue expectations to Apple’s recent iPhone update. Their application is not isolated from other technology companies' high-level directions. Snapchat’s Ads are unable to manage technical and operational risks that come from not being compatible with system or hardware updates on devices critical to their applications infrastructure.

Knowledge Gaps

In addition, there are also knowledge gaps on the Snapchat Ads team. The Ads team is responsible for 99% of the revenue at Snapchat. In an interview with a Snapchat Ad’s team member, they state that the team lacks talent that understands reporting flows. Reporting flows are the transferring of information about ads from Snap’s internal User Interface platforms to the advertiser’s third-party platform. Knowing the Snapchat Ads team is crucial to ensuring that advertisers continue to take out digital marketing ad space on the digital platform and ensuring the accuracy of information and return-on-investment for advertisers.

Despite Snapchat’s user-focused digital marketing, severe knowledge gaps and technology dependencies are yet to be addressed. It has already proven problematic to their stock price, shaving off 37% of its share price over 30 minutes in after-market hours.

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writer on love, tech, and politics, lover of coffee and petter of dogs

New York, NY
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