Chart of the Week: Is Snapchat’s Audience A Liability?
Following Snapchat’s much-anticipated IPO earlier this month, the company’s valuation has surged and flopped as analysts, investors, and advertisers have clashed over the true value of the platform’s prospects as an ad tech and media company. But some brands have already voiced their discontent with Snapchat’s ROI as an ad platform: last week, Heineken announced it would invest a significant amount of its ad dollars in Instagram instead, citing that platform’s more mature demographic, better targeting options, and lower risk factor in inadvertently marketing alcohol products to underage users. So how important are Snapchat’s demographics (or the user demographics for any given app)?
Are Snapchat’s demographics an asset or a liability?
For brands and advertisers who are marketing products or services with strict age restrictions, being able to target the right consumer is not only a matter of smart spending, but one of legal culpability. According to Verto Analytics data (among U.S. adults ages 18 and over), while Snapchat claims only a third of the monthly unique users as Instagram, it skews decisively younger. Instagram’s users are fairly evenly spread across all age groups, especially among users ages 20-49. But our data shows that 64% of Snapchat’s users are under the age of 34, and more than a third (34%) of its user base is between 18-24. While this segment is often seen as a highly-coveted “Millennial” target group by many retailers, it’s a potential liability for a company like Heineken.
Can Snapchat spin its younger audience as an asset to key advertisers? Or will it focus its efforts on better targeting technologies and other features that could improve ROI and offer a more enticing alternative to Instagram’s ad products?