Amazon Loses Ground in Social Commerce

Amazon Loses Ground in Social Commerce

by Clare O'Shea Amazon

When it comes to social commerce, Amazon isn’t the only dog in the fight anymore. While Amazon may still be the top product search channel for consumers, it is ceding ground as consumers increasingly turn to social platforms for shopping. In fact, social media is shaping up as a real competitor. 

Less Market Share

Declining numbers tell the story: according to Insider Intelligence, in Q1 2023, 56 percent of U.S. adults started their product search on Amazon, a drop from the 63 percent evidenced in Q1 2022. So where are consumers initiating product searches instead? One need look no further than platforms like Tik Tok, Instagram, and YouTube.

The defection from Amazon is currently a generational phenomenon that skews young: a February 2023 GWI survey reveals that for Gen Z product research, social networks have lapped search engines annually since 2020. In the United States, Gen Z is definitely the biggest group turning to social. As Insider Intelligence points out, 43 percent of Gen Z uses TikTok to search products online. By contrast, only 2 percent of Baby Boomers do so.

Money Talks

When it comes to actually making purchases on social platforms, Gen Z again leads the way. As a recent Capgemini survey points out, influencers introduced nearly 50 percent of Gen Z adults to a new brand or product in the six months prior to the survey’s publication; almost one-third of them went on to purchase that product.

Story of a Social App

Snap’s foray into shopping offers a glimpse into the real challenges Amazon faces hanging on to its share of the social commerce pie. In March 2023, Snap announced the launch of a new business unit, called ARES, to help retailers use—and make money from—AR and AI shopping tools.

According to The Verge, AR Enterprise Services (ARES) will furnish retailers with a suite of tools that will make it easy for consumers to virtually try on products like clothing, sunglasses, and shoes  — from home. On a practical level, Shopping Suite features allow users to shop and make purchase decisions just as they might in a brick-and-mortar store. For example, a shopper can upload a photo of themselves, then see how a product looks on them, in real time, at home, with that fresh cup of coffee still hot from the kitchen on hand.

Other ARES tools provide recommendations, based on body size and shape, to help ensure shoppers get the right size and fit on the first try. The goal: reduced return rates, which translates into a win/win for both consumers and retailers. Finally, a 3D Viewer tool allows shoppers to examine products from different angles — again, from the comfort of home. According to Snap, more than 300 customers, including Gobi Cashmere and women’s clothing/fashion retailer Princess Polly, have embraced various Shopping Suite features.

More to Come

In the face of shopping tools such as those touted by Snap, Amazon will likely continue to feel the squeeze. TikTok appears to be a particularly strong competitor for the tech behemoth. As a February 2023 Bizrate/Insider Intelligence survey indicates, nearly 20 percent of U.S. adults aged 18 to 34 shopped (and dropped cash) on TikTok in the past month.

And the prediction is that this shopping trend will only intensify: Insider Intelligence forecasts that TikTok will enjoy an uptick in social buyers in 2023—a jaw-dropping 9.6 million, in fact. That’s more than the net increase of Facebook, Pinterest, and Instagram combined. 

All This Despite the Drama

Advertisers are certainly paying attention. And even though there’s been talk of a straight-up ban of TikTok, marketers are still spending there. As Ben Jankowski, the former head of global media at Mastercard Inc., shared with The Wall Street Journal, “A lot of marketers are getting really good value out of TikTok and if something is performing really well, marketers are typically super slow to try to find alternatives.” And TikTok, by beta-testing search ads, is making it hard for advertisers to ignore the promise inherent in the platform’s 150 million American users.

Contact True Interactive

If Amazon is currently being invited to share the wealth when it comes to social commerce, that only means more opportunities for marketers to explore. Eager to get a better handle on social shopping? Contact us. We can help.

Image source: https://unsplash.com/photos/YddMIRck34I

 

Why Walmart Connect Expanded Its Advertising Partnerships

Why Walmart Connect Expanded Its Advertising Partnerships

by Tim Colucci Walmart

As the 2022 holiday season kicks into high gear, retail analysts are watching closely how much consumers will spend during a time of inflation. But it’s equally fascinating to understand how people shop. Walmart Connect, Walmart’s fast-growing advertising arm, believes that holiday shopping online – indeed all shopping online — will increasingly happen via social media, television commerce (t-commerce), and livestreaming. That’s one reason that Walmart Connect has expanded its advertising partner program to encompass social apps such as TikTok and streaming platforms such as TalkShopLive.

What Is the Walmart Advertising Partner Program?

Walmart Connect wants to help businesses advertise across the digital world beyond Walmart.com. To do that, Walmart Connect’s partnership program works with platforms to help brands scale, automate, and optimize their Walmart Connect advertising. These include partners that make it possible for Walmart Connect to expand self-service advertising through an application programming interface (API). Those API partners can be found here.

The partnership program is becoming more important to Walmart as it positions itself as a strong retailer-based ad platform alternative to Amazon Ads. And Walmart says the program is increasingly delivering value. For example, when BirdRock Brands turned to Pacvue (an enterprise software suite for eCommerce advertising) to scale its manual Walmart Sponsored Products campaigns, BirdRock was able to help design a campaign that ultimately experienced a return on ad spend 11 percent greater than its target, and an 83 percent increase in sales quarter over quarter.

What Did Walmart Announce About Its Advertising Partner Program?

Walmart has added a slew of advertising partners known as innovation partners. According to Walmart, these innovation partners will provide test-and-learn opportunities with formats such as social, entertainment, and live streaming throughout the entire holiday season. The newly expanded offering includes additional touchpoints and channels to reach customers wherever they are with new ad formats:

  • TikTok: this partnership provides an opportunity for advertisers to connect with potential shoppers on the red-hot TikTok platform. As Walmart noted, more than 50 percent of TikTok users say they watch ads on their feed instead of scrolling past them. The first-to-market pilot between TikTok and Walmart Connect will provide advertisers with the opportunity to serve in-feed ads on TikTok. This will leverage TikTok’s sound-on full screen video format together with Walmart Connect’s targeting and measurement.
  • Snap: the partnership with Snap enables advertisers to buy ad units including augmented reality, Collection Ads and Snap Ads through Walmart Connect and take advantage of the Walmart Connect’s geo-based measurement. This is the first time advertisers can buy Snap ad units through Walmart Connect and get in front of the unique Snapchat audience (75 percent of 13-34 year-olds in the U.S.), who hold over $1.9 trillion in spending power.
  • Firework: this partnership enables supplier-funded shoppable livestreams and short shoppable videos on Walmart.com/live. Walmart Connect is testing how brands can leverage Firework’s capabilities to create premium, engaging, mobile-first video experiences and, to start, has partnered with Johnson & Johnson and Procter & Gamble.
  • TalkShopLive: Walmart Connect is expanding its relationship with TalkShopLive to partnership enable supplier-funded shoppable livestreams on Walmart.com/live, TalkShopLive’s platform, brand and publisher sites, as well as across the web. Walmart Connect is testing how brands can amplify their content and connect with shoppers at scale. To start, it has already executed livestreams with Johnson & Johnson, Procter & Gamble, and Samsung, among others.
  • Roku: Walmart wants to help make TV streaming the next e-commerce shopping destination. Walmart touts Roku as America’s Number One TV streaming platform (citing Hypothesis Group research). So, Walmart has become the exclusive retailer to enable streamers on Roku to purchase featured products and have the transactions fulfilled by the chain. Walmart Connect will connect brands to customers through the Roku platform, and checkout will be seamless for customers, while advertisers receive insights on effectiveness via Walmart Connect measurement.

In announcing these partnerships, Walmart discussed how online search and shopping has become more diversified especially in the post-pandemic age. Seth Dallaire, Executive Vice President and Chief Revenue Officer, Walmart U.S., wrote in a blog post:

Consumers who turned to online shopping during the pandemic have chosen to stay there, with those returning to in-store relying on online research to guide their decisions. Consumers realized the importance of “connection” and were forced to adapt and connect in new ways including social feeds, livestreaming, mobile and more, specifically across video and connected TV. In fact, the predicted growth of social commerce from 10% of all e-commerce to 17% by 2025 will be driven by Gen Z and millennial consumers and nearly two-thirds (64%) of social media users — an estimated 2 billion social buyers — said they made a purchase on social media in the past year.

Now, Walmart Connect intends to do its part in connecting social media discovery to actual sales. So far, Walmart Connect’s partnerships have been hands-on in nature. Brands get custom reporting about their campaigns, based on activations on Walmart.com’s live shopping, TikTok, Snap, and Roku. But Seth Dallaire told Advertising Age that the partnership program expanding to the point where it would be more automated and widely available within Walmart Connect, so that brands could better target ads on social media and connected TV.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here and our Walmart Connect expertise here.

For Further Insight

“Why Walmart Connect Is Winning,” Tim Colucci, February 25, 2022.

“Why Retailers Are Launching Ad Businesses,” Tim Colucci, January 11, 2022.

“Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.

“Amazon Unveils New Ad Units Across Its Ecosystem,” Kurt Anagnostopoulos, May 4, 2021.

“Why Macy’s Launched an Advertising Platform,” Tim Colucci, March 3, 2021.

“Walmart Asserts Its Leadership in Advertising,” Tim Colucci, February 8, 2021.

Why Snapchat Launched Dynamic Travel Ads

Why Snapchat Launched Dynamic Travel Ads

by Amanda Cortese Snapchat

Just in time for a crazy 2022 travel season, Snapchat has introduced Dynamic Travel Ads. This ad unit was developed for airlines, hotels, online travel agencies, and tours. It’s the first time Snapchat has introduced a category of Dynamic Ads outside of eCommerce. The ad unit comes at a time when the travel is roaring back from a slowdown caused by the COVID-19 pandemic.

According to a Snapchat blog post, 76 percent of Snapchat users in the United States are making plans to or already have returned to their pre-pandemic behaviors, and Snapchatters are more likely to travel than users of other platforms.

What Are Dynamic Travel Ads?

Dynamic Travel Ads are a form of Dynamic Ads that Snapchat launched in 2019. Dynamic Ads make it possible for businesses on Snapchat to automatically create ads in real-time based on their own product catalogs. Dynamic Travel Ads, per se, allow a business to upload a travel-specific catalog or feed, and dynamically serve up relevant trip information to users, based on an individual user’s travel preferences and intent.

Dynamic Travel Ads offer the following features:

  • Customized Catalog setup that’s built to meet the needs of travel advertisers with different product attributes than traditional eCommerce advertisers.
  • Advanced audience targeting based on a Snapchatter’s intent to travel to specific destinations.
  • Locally-relevant campaign delivery to serve relevant trip details based on popularity, leveraging Snapchat’s visitation data.

Snapchat says that this ad unit delivers benefits such as:

  • Reach a broader audience of travelers. The ad unit should help businesses find prospective customers who are interested in traveling, and who may or may not have been to a company’s site or app before. With Snapchat’s machine learning and product ranking capabilities, businesses can serve relevant ads to users based on travel interests, preferences, and popularity of listings and destinations.
  • Drive bookings. Businesses can dynamically retarget users who have been to their site or app before with hotel properties, destinations, or flight routes that are most interesting to them. With locally-relevant retargeting, a business understand where its customers are looking to travel and serve them properties within the area to increase ROI.

The Gen Z and Millennial Connection

According to Snapchat, Millennials and Gen Z – which comprise the majority of Snapchat users — are leading the push toward Dynamic Travel Ads. Snapchatters are 37 percent more likely to book travel after seeing an advertisement. This avid travel audience actively uses location-based features such as:

  • Location Data: Snapchat captures Snapchatter visits to more than 30 million unique places (locations of interest) in the world.
  • Snap Map: the Snap Map reaches more than 200 million Snapchatters every month. More than 70 percent of Snapchatters use the Map because they like to see where their best friends are and what they are doing. Nearly six out of 10 say that the Snap Map helps them find their best friends when they are out and about.
  • Places: Snapchat has added more than 49 million places to the Snap Map, which features stories, hours, reviews, and delivery options for local businesses.

Travel Ad

And it’s no wonder that Gen Z and Millennials are such an important audience. This generation is fueling the rise of the entire travel industry. Travel is roaring back following a difficult downturn, and even though the industry is battling a personnel shortage and inflationary pressure, travelers are going full steam ahead with domestic and international adventures.

Success Stories

Snapchat shared examples of businesses benefitting from this ad unit. For instance, Booking.com used Dynamic Travel Ads in order to dynamically pull images directly from its product catalog and serve users ads with locally relevant listings based on products they had already viewed. This helped Booking.com unlock an incremental audience, resulting in a 20 percent lower cost per purchase than other U.S. advertisers. Etihad Airways was able to reduce its cost per flight search by 4x with Dynamic Travel Ads. Additionally, the business saw a 307 percent increase in return on ad spend and a 76 percent decrease in cost per purchases, compared to its non-dynamic campaigns.

What Businesses Should Do

At a minimum, travel brands should become more familiar with Snapchat and its audience before trying ad units.  Start with the creation of a Snapchat Public Profile (similar to a Facebook page) to understand how to interact with Snapchat’s audience. And understand how the Snapchat audience interacts with content. According to Snapchat, its user base has these characteristics in common:

  • 150 percent more likely than non-Snapchatters to prefer to communicate with pictures over words.
  • Four times more likely than non-Snapchatters to gravitate to immersive video and mobile games, including augmented reality experiences.

If your brand already rocks Instagram with visual content, chances are you are well positioned to succeed on Snapchat. If you are on Snapchat already, it’s worthwhile to try this new ad unit as part of your paid media strategy. True Interactive can help you.

Contact True Interactive

Is Snapchat a good partner for your brand’s reach? Contact us. We can advise. Learn more about our expertise with social media platforms here.

Why Snapchat Is Attracting More Advertisers and Users

Why Snapchat Is Attracting More Advertisers and Users

by Amanda Cortese Snapchat Social media

Snapchat’s turnaround in 2020 was no fluke. The company recently reported a monster quarter, reaching its highest year-over-year revenue and daily active user (DAU) growth rate in four years. It’s time for businesses to seriously consider Snapchat as part of their game plan for reaching Gen Z and Millennial audiences. Many are already, which is why Snapchat’s ad revenue keeps rising. Let’s take a closer look.

Snapchat Reports Stunning Quarterly Growth

Snapchat’s growth for the second quarter of 2021 was nothing less than stunning. Its revenues increased to $982 million, a 116 percent increase compared to the prior year. That growth was accompanied by an increase in DAUs, an important metric because more people using Snapchat means a growing audience for advertisers. DAUs were 293 million for Q2 2021, an increase of 55 million, or 23 percent year over year. DAUs increased sequentially and year over year on both iOS (Apple) and Android (Google) platforms.

Evan Spiegel, CEO of Snapchat’s owner, Snap, said in a statement, “Our second quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years. We are pleased by the progress our team is making with the development of our augmented reality platform, and we are energized by the many opportunities to grow our community and business around the world.”

Why Is Snapchat Is Growing

Spiegel noted that Snapchat is succeeding for three reasons: a growth in augmented reality (AR) features, new content, and new advertising features. Examples of all three:

New AR Features
  • Connected Lenses, enabling Snapchatters in different locations to interact with each other through AR.
  • Several try-on capabilities with Lens Studio 4.0, including multi-person 3D body mesh, advanced cloth simulation, and a new visual effects editor for more realistic Lenses.

These are significant because AR has always been an important competitive differentiator for Snapchat, as we noted on our blog recently. Medium recently commented, “One of the reasons that Snapchat is able to carve out its own niche in the increasingly combative social media arena is its singular focus on AR-powered visual communication, which differentiates Snapchat from its competitors.”

Source: Snap investor presentation

Indeed, businesses have capitalized on Snapchat’s embrace of AR and are doing so as they gear up for the 2021 holiday shopping season. In a recent webinar, Snapchat shared example of Ugg boots, which is part of Deckers Brands. A spokesperson from Deckers Brands said that Deckers used AR in Snapchat for their holiday campaigns in 2020 to allow customers to use Ugg filters to “try on” their boots. This year, Deckers will probably do something similar with apparel, since Ugg is expanding its products into all kinds of apparel. (Deckers is no stranger to Snapchat. In this 2020 investor call, Snapchat describes how Ugg has successfully applied Snapchat’s dynamic ads feature.)

New Content
  • Eight new and renewed Snap Originals, including Swae Meets World, a documentary featuring American musician Swae Lee as he prepares to launch a solo album.
  • A record 177 new international Discover Channels, including 36 in the UK and 24 in India, one of which is a partnership with Sony Pictures Network to launch five Shows.

These developments arrived on top of Spotlight, which is Snapchat’s feature for monetizing individual creator content, launched in November 2020. New content features geared toward businesses and individual creators alike are important because they provide advertising sponsorship opportunities for brands and the growing creator economy.

Source: Snap investor presentation

New Advertising Features
  • Public Profiles for businesses, which allows any business to create a profile on Snapchat showcasing their Lenses, Highlights, Stories, and shoppable products.
  • An integration with Salesforce, allowing brands to leverage their first-party data to reach Snapchatters with relevant ads.
  • The Creator Marketplace (within self-serve Ads Manager), connecting advertisers with certified Lens Creators and facilitating the AR development process.

The Salesforce integration is especially noteworthy. With Google phasing out support for third-party cookies on the world’s most popular browser, Chrome, businesses are under more pressure to figure out how to maximize the value of their first-party data. Snapchat is sensing and responding to this need.

The news media reacted positively to Snapchat’s strong quarter. The “Yes, but can they do it again?” tone that characterized coverage of Snapchat’s positive results in 2020 subsided. For example, Meghan Bobrowsky of The Wall Street Journal portrayed Snapchat as a feisty and innovative company successfully fighting back at is copycat rivals.

She wrote, “The company, best known for disappearing photos and messages on its Snapchat app that is popular with teens and young adults, has impressed investors with its growth during the pandemic, outpacing much larger rivals. It has introduced new features to appeal to businesses beyond traditional social-media advertising, including a push into augmented reality.”

What Advertisers Should Do

We believe advertisers should take a closer look at Snapchat. Start with the creation of a Snapchat Public Profile (similar to a Facebook page) to understand how to interact with Snapchat’s audience. And understand how the Snapchat audience interacts with content. According to Snapchat, its user base, which skews toward Gen Z and younger Millennial generations, has these characteristics in common:

  • 150 percent more likely than non-Snapchatters to prefer to communicate with pictures over words.
  • Snapchatters are three times more likely than non-Snapchatters to say they are using AR more than they did last year to try on products.
  • The Snapchat Generation is 1.4 times more likely than non-Snapchatters to gravitate to immersive video and mobile games, including AR experiences.

If your brand already rocks Instagram with visual content, chances are you are well positioned to succeed on Snapchat!

Contact True Interactive

Is Snapchat a good partner for your brand’s reach? Contact us. We can advise. Learn more about our expertise with social media platforms here.

For More Insight

“How Snapchat Keeps Innovating with Augmented Reality,” Bella Schneider.

“Snapchat Spotlight: Advertiser Q&A,” Max Petrungaro.

“Why Snapchat Keeps Growing,” Bella Schneider.

How Snapchat Keeps Innovating with Augmented Reality

How Snapchat Keeps Innovating with Augmented Reality

by Bella Schneider Social media

As we’ve blogged, Snapchat has been demonstrating a profound appetite for investing in augmented reality (AR). It could even be argued that Snapchat is the most AR-driven platform out there, continuing to reimagine what AR experiences might be on mobile and beyond. Let’s take a look at how Snapchat is leading the pack when it comes to AR innovation.

AR: the “Ace in the Hole”

AR is such an area of strength that it might be considered Snapchat’s “Ace in the Hole.” As Medium observes, “One of the reasons that Snapchat is able to carve out its own niche in the increasingly combative social media arena is its singular focus on AR-powered visual communication, which differentiates Snapchat from its competitors.”

Snapchat Data

Recent Developments with AR at Snapchat

That’s a message Snapchat has energetically promoted, and underlined with a commitment to new AR features. Consider the following additions:

  • The Connected Lens allows two Snapchat users to share an interactive AR experience, whether they are sitting side-by-side in the same room or located miles apart from one another (in a demo, Snapchat partnered with Lego to show how two people can build a virtual Lego set together using the AR lens). In a post-pandemic world where social interaction has become a sort of Holy Grail, AR facilitates connection. And that makes AR more relevant than ever right now.
  • Snapchat has also worked to improve Scan, its built-in visual search tool. Scan, which helps users ID everything from songs to car models, now has a new feature, Screenshop, which recommends clothing purchases based on photos of outfits.
  • Snapchat also hasn’t forgotten the importance of sometimes . . . just having fun. The Cartoon 3D Style by Snapchat lens scans your face and then imposes upon it a 3D cartoon look — as if the user has just stepped out of a Pixar film. The lens uses AR technology, and results are impressively realistic.

Calling All Creators

Snapchat isn’t just expanding its AR features willy nilly; its investment in AR is informed by the desire to grow a vigorous creator community. It does this by giving creators useful tools—and the possibility of rewards.

Consider the standalone iOS app, Story Studio, which provides a suite of vertical video editing tools. Or the new Gifting feature, which attracts creators with the promise of monetization. Gifting gives users a way to tip their favorite Snap creators. Also new: a Creator Marketplace, which allows businesses to locate and pair up with Snapchat creators. 

AR Platform for Brands

So, are businesses spiking an interest? There’s certainly reason to: according to Medium, Snap has said its users “are two times more likely to make purchases if they have interacted with a product via AR lens than not.” That’s a powerful incentive for brands.

 

Snapchat data

Some, like Estée Lauder, have already risen to the challenge. According to Medium, the cosmetics giant has been recognized as “one of the first companies to integrate their product catalog through Snapchat’s API, which makes it easy to create and publish new Dynamic Shopping Lenses that include price, availability, and a path to purchase.” Other brands that have successfully employed AR try-ons and shoppable lenses include Gucci, American Eagle, and the eyewear brand Clearly.

What Should Advertisers Do?

Could your brand likewise benefit from a partnership with Snapchat — and an exploration of AR? Ask yourself the following:

  • Might AR provide some fresh opportunities for your advertising? If so, Snapchat is an excellent platform to try it on.
  • What do you know about AR? According to Threekit, a tiny one percent of retailers are currently using AR or virtual reality in their customer buying experience. And yet a whopping 61 percent of consumers indicate that they prefer retailers that incorporate AR experiences. Does it make sense for your brand to get in on the ground floor?
  • Finally, are you hoping to reach the Millennial and Gen Z audiences? The Threekit stats also note that 70 percent of consumers aged 16 to 44 are at least aware of AR. Snapchat — and AR — can be a meaningful way to reach this group.

Contact True Interactive

 AR can be a powerful go-to in a brand’s toolkit. Contact us to learn more. We can help.

Snapchat Spotlight: Advertiser Q&A

Snapchat Spotlight: Advertiser Q&A

by Max Petrungaro Social media

When Snapchat launched in-app feature Spotlight in November 2020, the company opted to flex its muscles — and take on short-video-making app TikTok—by making daily disbursements of cash to participating Snapchatters. The rationale: to spark public creativity, incentivize public sharing amongst influencers, and build a following. Their efforts were successful: by January, the platform had grown to more than 100 million monthly active users. Curious to learn more about Spotlight and why it matters to your brand? Read on.

What Is Snapchat Spotlight?

Spotlight is a space within Snapchat where users can watch a vertically scrolled feed of short, engaging videos (up to 60 seconds long) backed by music. Rather than the day-in-the-life content traditionally associated with Snap, Spotlight offers content with a meme-like, jokey feel.

Why did Snapchat launch Spotlight?

Spotlight’s raison d’être may go beyond the obvious move to take on behemoth TikTok. It is also the place where Snapchat can branch off from the strategies that made the app a household name in the first place. Snap’s mandate since its inception in 2011, of course, has been privacy first, with photos and videos simply disappearing in 24 hours. It was a successful formula, and one that completely reimagined what online sharing could be. But the app seems to be acknowledging that some permanence can be a positive: with Spotlight, viewers can tap on favorite videos and save them.

Why Is Spotlight Popular?

Although comparisons to TikTok are inevitable, users claim the two are in fact different beasts. As Ad Age reports, CJ OperAmericano, who goes by her online name, explains that “Snapchat and TikTok have pretty different users and I am seeing higher rewards for originality and creativity on Snapchat Spotlight. You’re more likely to pop off on an original idea [on Spotlight] than just following along with a cookie cutter trend like you are on TikTok.”

Another difference: unlike TikTok, Spotlight does not have a function allowing public like counts or comments. But right now contributors are being rewarded another way. Based on a formula which includes number of views and length of views, among other factors, Snap is recognizing Spotlight contributors by awarding cash to the most popular creators. Users might make a minimum of $250 per Snap, but if someone has an extremely viral video, they could take home a big chunk of the pot. The approach has gotten attention because it’s not just existing influencers and TikTok stars who are benefitting. Average users are also making a profit after their videos go viral.

Consider Andrea Romo, who works at a Lowe’s in Albuquerque. Romo was shocked to find out that her Spotlight video—her sister deep-frying a turkey at Thanksgiving—was so popular it had earned her approximately half a million dollars. “You don’t have to ask to be paid, you don’t have to join any program, you just post a video and if it does well you get paid,” 19-year-old Dax Newman, a ceramist who has made about $30,000 on Snapchat, tells The New York Times.

What Should Brands Know?

Spotlight doesn’t show ads yet — with the operative term being “yet.” While Snapchat is, for the time being, simply giving Spotlight space to become a habit with users, the early surge of creators are exactly the people brands partner with and sponsor online. And it could be argued that Spotlight’s egalitarian approach — the fact that you don’t have to be a celebrity or have famous parents to get a leg up — is bringing attention to a new crop of budding influencers. Influencers that brands can look forward to partnering with down the line: according to Ad Age, “advertisers expect to be able to tie into the program and its creators in the future.”

Contact True Interactive

While Spotlight may not be open to advertising yet, digital opportunities for brands abound. Eager to learn more? Contact us. We can help.

Why Snapchat Keeps Growing

Why Snapchat Keeps Growing

by Bella Schneider Social media

Snapchat has experienced its ups and downs in the past few years, but one undeniable truth prevails: the app continues to flourish. Snapchat is, in fact, exceeding growth expectations: eMarketer, for one, expects Snapchat to gain more than 63 millions users by the end of 2023, as contrasted to an original estimate of 52 million. In addition, according to The Street, Snapchat is on course to be profitable in the very near future, after years of losses: “Analysts expect Snapchat to soon reach its ‘break-even’ point in profits, most likely by 2022. A group of 34 technology analysts estimates the company will earn a profit of $48 million in 2022.”

Why the Growth?

Why is Snapchat continuing to grow despite increased competition from apps such as Instagram and TikTok? Some possible reasons include:

1 Continued Innovation

Snapchat’s owner, Snap, was just named Fast Company’s most innovative company in 2020, which speaks volumes about why Snapchat has rebounded from the brink. TechCrunch also reports that new products are bound to boost engagement with Snapchat and, crucially, ad views. Snapchat’s recent innovations include Cameos, which allow users to edit their own face onto an actor in an animated GIF. And Bitmoji TV features comical cartoons that star the consumer’s customizable Bitmoji avatar. For users who have always dreamed about being a secret agent, say, or a zombie president, Bitmoji TV brings those fantasies to life via episodes featuring a main story as well as shorter, single-gag clips. User avatars appear in the regularly scheduled adventures, which range from sit-coms to soap operas and infomercials. “It’s scripted but its personalized,” Bitmoji co-founder and CEO Ba Blackstock has said. “First and foremost, I hope that everyone who watches this has kind of a mind-blowing experience that they’ve never had before.”

2 Excellent Timing

Snapchat came along at the right time, as the Millennial and Gen Z population began to swell—and come of age. Launched in 2011, the app appeals to the Millennial and Gen Z populations with its promise of content that is both ephemeral and authentic. As co-founder Evan Spiegel noted in the company’s first blog post, “We’re building a photo app that doesn’t conform to unrealistic notions of beauty or perfection but rather creates a space to be funny, honest or whatever you might feel like at the moment you take and share a Snap.” And the platform has captured a sizable demographic. As Statista notes, Millennials and Gen Z, together, now comprise about half the U.S. population.

3 International Expansion

Snapchat continues to expand effectively into international markets, one profound example being the uptake of Snapchat in India. As TechCrunch observes, “Snapchat’s user growth has been on [a] tear thanks to international penetration, especially in India, after it re-engineered its Android app for developing markets.”

The Challenges

It’s not all smooth sailing, of course. As 24/7 Wall St. points out, Snapchat’s features can be—and in fact have been—easily copied by competitors like Facebook. When Snapchat introduced Stories, which allows users to share snaps in a narrative style, it was making a successful bid to keep users engaged and coming back for more. Facebook’s response? Its own version of Stories on both Facebook and Instagram; and the release of Instagram Threads, a camera and messaging app for “close friends.”  As Wired notes, Facebook chairman and CEO Mark Zuckerberg has made it clear to employees that doing what’s best for users might include replication: “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy.’”

Furthermore, Snapchat lacks the reserves of cash that Facebook enjoys. 24/7 Wall St. opines, “While it’s still too soon to assess the impact of Instagram Threads on Snapchat, the salient point is that Instagram’s owner (Facebook) has a virtually unlimited war chest and a seemingly visceral need to stomp on Snapchat, if not to stamp it out entirely.”

Staying Viable

The key for Snapchat? Staying nimble and creative in the competitive and ever-evolving social landscape. In short, the app will continue to thrive if it keeps on generating features that both users and advertisers will love – especially advertisers, whose revenue Snapchat needs. One example of courting advertisers with more features: Snapchat’s Swipe Up to Call ads, which give users the opportunity to swipe up on their screen and immediately and directly call or text the advertiser.

Contact True Interactive

To succeed with online advertising in 2020, contact True Interactive. Read about some of our client work here.