• by Tobi Elkin  @tobielkin, March 3, 2017

Snap Inc. began its life in the public markets on Thursday, trading on the New York Stock Exchange at $24 a share, rising 41.2% from its pricing at the open. The opening price of $24 puts the company's market capitalization at about $33 billion—nearly the size of Marriott and Target. For comparison, Twitter's market cap is about $11 billion and Facebook's is about $395 billion.

Published reports indicate that nearly 100 million shares were traded in the first 30 minutes of trading. Trading began on Thursday at 11:20 a.m. in New York. On Wednesday, the company had priced its 200 million share public offering at $17 a share. Note that Snap posted a $515 million loss last year.

A Forrester “quick take” brief noted that while Snap sees an opportunity to be “the next big social media story,” its optimism should come with "a dose of skepticism on the side.” Why? For one thing, while Snapchat has proved itself with mobile video, pursuing TV-style revenues remain untested, according to Forrester.

Forrester projects that between 2016 and 2021, video will account for 77% of incremental mobile display ad spending. “As video overtakes social networks, Snapchat is in prime position to deliver video ads on its visual platform. After relabeling itself a camera company, it made moves reminiscent of a TV network: exploring original programming, selling ads against Nielsen’s ratings (and seeking upfront ad commitments at $100 million-plus price tags), and cutting ad revenue share with its media partners,” the Forrester quick take brief reported. However, it also stressed that all of these efforts remain unproven. “To deliver its new positioning, Snap will need to listen to advertisers as intently as it listens to its new investors,” the brief said.

Another challenge that’s dogging the entire industry will impact Snap as well: measurement. Currently, Snap only offers metrics that tell marketers about content impact (video completions, for example) vs. business impact metrics.

In email comments to Real-Time Daily, Forrester Senior Analyst Jessica Liu put a spin on Snap’s bullish view of its growth trajectory: “Facebook is an anomaly, likely never to be replicated. [Snap’s] attempts at relabeling itself a camera company are interesting, as are its moves to behave more like a TV network. But these efforts are new and untested at the moment.”

Liu maintained that Snap should invest in data and measurement. “Its user data is more limited than other social networks, which means its ad targeting capabilities are weaker and it offers less insight,” she said. “It's no longer acceptable to deliver content performance metrics (e.g., likes, shares, views, screengrabs). Social networks must start delivering business impact metrics (e.g., connecting a social ad campaign directly to sales or brand health).” 

Digital research firm eMarketer recently increased its Snapchat U.S. usage projections for 2017 by more than 5%, forecasting that 70.4 million Americans will use the platform. In June, eMarketer had estimated 66.6 million U.S. users for 2017. The firm defines a Snapchat user as a mobile phone user of any age who accesses their Snapchat account via mobile phone app at least once per month.

Industry executives weighed in on the IPO: “We’re bullish on Snapchat, and not just because we were the first company to release a self-service platform for buying Snap Ads through the API. We’ve seen tremendous results from the 20+ campaigns running through 4C,” Aaron Goldman, CMO at 4C Insights, a data science and media-tech firm, told Real-Time Daily via email.

“Tremendous results” -- but how are those results measured? Snap may find itself confronting the measurement and metrics juggernaut that others are facing. Google’s YouTube and Facebook have agreed to audits by the Media Rating Council as advertisers become more picky about data showing how long users watch ads and whether they’re actually viewing them.