Is Snapchat the last untapped advertising channel for direct-to-consumer brands?
Brands are experimenting with placing ads on the photo-sharing platform – but will it take off?
Direct-to-consumer brand launches continue to come in at a steady clip – and following in their wake is a slew of advertising.
They follow us around Facebook and Instagram, litter our email inboxes, and start sending us snail mail. Some have even taken to texting us.
As the pursuit for the next untapped communications channel continues, some marketers are turning to Snapchat.
According to Digiday, ad spend on Snapchat is up by around 10%, with brands doling out a quarter of their ad budget on the 10-year-old platform.
Brands that have experimented on the platform include Doe Lashes, which says Snapchat is now its second-biggest revenue driver (on par with TikTok), and wine-in-a-can brand Bev, which describes the channel as the “highest-performing, highest return on investment platform that we use.”
The platform hits a number of sweet spots for direct-to-consumer marketers, who are on the lookout for a channels that are not so saturated with ads that users simply scroll past them, but which also won’t break the bank in the way a TV spot can.
In 2019, it was estimated that the cost for brands advertising on Facebook had risen 90% year-on-year, as the number of advertisers on the platform continues to increase. Advertising on Snapchat, meanwhile, comes in at around five-times cheaper, says Savannah Sanchez, founder of paid social media management consultancy The Social Savannah.
“A lot of e-commerce brands have only experimented with a small budget on Snapchat, and maybe they haven’t tried all of the different ad formats that you can have,” she says. “But for the brands that are testing, they are seeing a lot of scale and success.”
Blake Driver, head of acquisition at direct-to-consumer hot sauce brand Truff, says the platform is a cost-effective way to raise brand awareness. “It’s a more intimate experience than other social platforms. People are sending private messages to friends and family, so it’s great to be there,” Driver says. “It’s very affordable, and pretty easy to use. So it’s not like these campaigns are super hard to maintain.”
Compared to other platforms it advertises on, Truff says the cost per thousand impressions on Snapchat comes in at 161.54% lower.
The app also presents a happy medium between TikTok and Instagram, with both user-generated content and more polished campaign videos. With Snapchat, brands aren’t under pressure to get weird if they don’t feel it fits their brand persona. “The interesting thing we’ve found with Snapchat is there is a place for both raw, user-generated content, but also users are really receptive to getting highly-produced, very polished ads,” Driver says.
Sanchez says that single-take how-to videos, customer testimonials, and unboxing videos (all formats that work well on TikTok) tend to be successful on Snapchat, too.
But despite Snapchat’s best efforts to appeal to e-commerce brands, there are downsides to advertising on the platform that have made brands hesitant to commit more cash.
Roughly 70% of Snapchat’s 500 million monthly active users are under the age of 25, a demographic that is not normally associated with a big personal spending budget.
But the “number one gripe” brands have with Snapchat, Sanchez says, is that it’s not always clear how many sales the platform is actually driving for brands. “That’s a major challenge for the brands that have tested [the platform],” she says, adding that some of her clients struggle to match up the numbers that Snapchat is providing with what they’re seeing on their Google Analytics or Shopify dashboards.
At Truff, Driver says that Snapchat currently ranks fourth place “in terms of brand awareness for paid social platforms,” behind Facebook, Instagram, and then TikTok.
“Tiktok seems to be a more effective channel for driving sales than Snapchat,” he says, explaining that Truff asks its shoppers to fill out post-purchase surveys that collect information on the journey that took them to the checkout. “While the numbers look great on Snapchat, when we look through Google Analytics and post-purchase surveys, the numbers aren’t necessarily backing out.”
Driver does say, however, that he is optimistic about Snapchat's potential. “Not so much in its current form – but the augmented reality platform on the horizon,” he says. “I think Snapchat has the potential to be a massive player.”
Since 2015, Snapchat has been building out a series of AR filters that scan a users’ face and lets them turn themselves into cartoon characters or – more usefully for brands – test out what a new hair color or style of make-up might look like on them.
In March, streetwear brand Off-White launched a Snapchat AR lens that let users try on the brand’s face masks, while makeup brand Florence by Mills launched in 2019 with a Snapchat try-on filter. Last June, Gucci launched a try-on campaign that let users slip on the luxury brand’s shoes – complete with a “shop now” button which was a first for the platform. At a conference in May, Snapchat confirmed that it was working on boosting its AR tech to help users try on a wider range of products virtually, including watches.
The company is also working on the issue of tracking, and has been beta testing business profiles with a selection of brands to give them more insights on how users are interacting with them.
“I’m very bullish on their future,” Driver says. “In its current form, you know, it’s rough. But five years down the road, I think this [will be] a very different story.”
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