How Snapchat is Making a Play for TV Ad Dollars
In the last week, there has been a flurry of Snapchat advertising updates ahead of Snap Inc.’s imminent IPO, rumored to be happening in the spring.
Some of these updates, like being able to leverage 3rd party purchase data in targeting, simply amount to playing catch up to the advertising capabilities of platforms such as Facebook and programmatic DSPs. But Snapchat made three other moves this week that signal something bigger: the company is entering the race for the estimated $70 billion that’s spent on U.S. TV advertising annually.
Creating a more brand-safe environment
On January 23, Snap Inc. announced new rules that restrict publishers from using pictures in article teasers within the Discovery section that do not relate to the content being discussed. Snapchat also will let publishers age-gate content so that The Daily Mail (a publisher notorious for racy content), for example, could only allow people 13+ to view their content.
By taking steps to prevent advertiser messaging from appearing next to risqué or controversial content on Discover, Snapchat is signaling to advertisers that they are a safe platform for their ads — a departure from their previously held “all of Snapchat or nothing” approach to ad sales. This choice in content alignment is akin to the ability of a family-friendly TV advertiser to easily choose not to run TV spots on “Teen Mom,” for example, if they deem it unpalatable for their brand.
Bringing TV buying models to digital
A day later, Snap Inc. said it will allow Nielsen “mDAR” (mobile Digital Audience Ratings) measurement on its ad platform. This partnership with Nielsen will enable advertisers to purchase ads on Snapchat in the same way they purchase TV spots — with GRPs guaranteeing reach against an age and gender target.
Attempting to secure big deals
Another 24 hours later, Snap Inc. shared that the company is in talks with the “Big Four” holding companies (WPP, IPG, Publicis, Omnicom) about the opportunity to secure $100-$200 million in spending commitments for 2017. While this comes ahead of the traditional TV upfront season, it clearly shows that Snap Inc. wants the ad agencies in charge of clients’ advertising budgets to give them the same thing they give TV networks — big spends and upfront commitments.
By touting a safe environment for brand content, offering GRP guarantees, and pursuing upfront-level deals, Snap Inc. is trying to bring more value for advertisers to its ad platform — and in the process, making a play for TV ad budgets. What remains to be seen is whether advertisers will play ball and whether Snap Inc. can continue to grow its user base and increase engagement to truly rival the reach of TV.
