Snap Inc. is expected to go public on Thursday, leaving many to wonder how the most anticipated tech IPO since Facebook will be treated by investors on Wall Street.
While Snap described itself as a camera company during its roadshow, investors know that its success hinges on its ability to monetize successfully as an ad platform.
AdExchanger reached out to agency executives with the following question about Snap’s future success as a public company:
“What factor will determine Snapchat’s success as an ad platform for you?”
Here are their responses.
- Mark Read, global CEO, Wunderman
- Mike Racic, president of media, iCrossing
- James Douglas, executive director of social media, Society
- Guillaume Lelait, EVP and US managing director, Fetch
- Maikel O’Hanlan, VP of social strategy and relationship marketing, Horizon Media
Mark Read, global CEO, Wunderman
“Advertising and marketing on Snapchat are still in their infancy. The platform has followed a familiar path of driving consumer engagement, forging media partnerships and building an audience. It’s now ready to figure out how to monetize. The IPO is an important signal that the company has reached maturity and is ready to engage professionally.
Just like Facebook in its early days, there are bound to be false starts before Snap figures out how to bring brands on the platform without disrupting the user experience. The short-term issue is whether they can deliver to marketers without alienating a fickle audience. Marketers will give them a break because they can experiment, but as their budgets become more real, Snapchat will have to prove ROI. That can’t be in conflict with keeping their customers happy.”
Mike Racic, president of media, iCrossing
“Snapchat has built an experience that empowers creative advertising. But with short-term expectations from Wall Street, marketers must be concerned about how Snap will balance pressures from investors to deliver results while keeping the integrity of the user experience.
Their future success as an ad platform will depend on how well they innovate on ad products that continue to dazzle while driving performance for brands, as well as how they develop their measurement approach, where their platform will fit into cross-platform plans and how they will maintain steady user growth.”
James Douglas, executive director of social media, Society
“Snapchat’s success as an ad platform will come down to a highly engaged and unique audience proposition, which it has to grow and protect. As for now, it’s the unrivaled place to find super-engaged audiences under 25-30 years old. But it’s a fickle audience that will move elsewhere if relevance, features and excitement decline on the platform, or if competitors replicate and improve its baseline functionality.
In the past five months, Snapchat has evolved very quickly to improve capabilities and support. They seem to have all the pieces in place with great momentum. But concerns about the value proposition of advertising to their audience could disrupt that.”
Guillaume Lelait, EVP and US managing director, Fetch
“Snapchat’s ability to gain international traction and scalability will determine its success – for example, its ability to penetrate markets like China. Its premium pricing model creates a need for full transparency and a suite of products that deliver more entertaining and targeted content. Snapchat’s ability to develop robust tools that allow marketers to build, optimize and report on campaign metrics and performance will also determine its success.
Post-IPO, as Snapchat’s capabilities expand and audience connection deepens, Snap must convince advertisers that it has the right platform to translate user activity to brand engagement.”
Maikel O’Hanlan, VP of social strategy and relationship marketing, Horizon Media
“I don’t see advertisers approaching Snapchat differently than other ad-supported platforms. Platform design lends itself to improving awareness, consideration and sales. If Snapchat can deliver better than competitors on one or all of those metrics, they win. Its success comes down to comparative performance against other platforms on accepted measurements.
The Snapchat platform must ensure that its features don’t get co-opted by competitors with broader appeal, that it can grow while retaining its exclusivity factor, that message distribution and visibility don’t prevent brand reach and that a hipper platform doesn’t come along soon.”
