Commentary

Is A Quarter Of Snapchat's Users Viewing Ads Enough?

After looking like a cross-section of the Alps, during its first month after floatation, Snap's share price seems to have plateaued just a shade under its opening value. Things would appear to have settled down. Many reports have suggested that the company is a good bet because no other service has such a strong hold over Millennials.

All this is true -- only there is a catch. I have blogged about it in the past, and now the latest J.P Morgan figures, reported on in eMarketer, appear to back up the suspicion. Millennials are indeed an elusive audience that in theory should be highly prized. The trouble is that they're not all that keen on advertising. 

Now, we should qualify that advertising is never a reason why anyone turns on the television, logs on to a site or picks up a paper. It's an accepted accompaniment that people understand keeps the proverbial lights on. But even when Snap goes out of its way to make advertising fun, through branded filters, the response is pretty mixed. The research shows an even three-way split of roughly a quarter of users frequently using sponsored filters, while another quarter do so sometimes. Half of all users never engage.

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Furthermore, three in four say they never swipe up to view an ad, and nearly that same proportion never watch video ads.

So is the cup half empty or half full? That's the question that will haunt Snap and its investors. What is clear is that even when it makes advertising a fun way of adding a photo effect to a picture or video, half of its audience won't even consider it as an option.

When we're talking about more conventional advertising messages, the proportion of people who are simply not interested rises to around three in four. Remember, we're not talking about annoying ad formats here. These are not pop-ups -- these are formats that require purposeful interaction.

What that ultimately means is that it's up to brands to establish as they see how interaction goes. It's worth pointing out that a quarter -- or, at a push, nearly a third -- of Snapchat's audience that may be open to interact with an ad is still a pretty massive assembly of Millennials that would be hard to find anywhere else. 

However, this comes with a huge caveat. The generation that is the biggest adopter of ad blocking -- which every piece of research shows is the most opposed to seeing advertising online -- is there in droves, but getting interaction will be a very tall order.

That's not to say it can't be done with compelling content, but brands using the channel need to be aware that roughly only one in four is receptive. 

This column was previously published in the London Blog on April 4, 2017.

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