'Black hole of nothingness': Metrics concerns dog Snapchat's ad expansion

This story has been updated. Please see below.

As Snapchat tries to reach the top tier of platforms, it is grappling with convincing brands of its virtues.

Multiple brand execs have told Digiday that the hardest thing to swallow about Snapchat currently is that in a marketing landscape obsessed, ostensibly, with measurement and transparency, Snapchat worries them because it doesn’t provide the kind of metrics platforms like Facebook and Google do. One small-company marketer said that it’s hard for him to convince his bosses to spend on Snapchat because of that lack of measurement. Another marketer joked that his company should take the money they may spend on Snapchat, burn it, and Facebook Live that experience. “At least I’ll get measurement out of it.”

Currently, Snapchat provides location information but nothing on clicks or other metrics that show whether the ads work, including first-party data that allows brands to track certain users.

For one media buyer who declined to be named, Snapchat has improved on measurement but still has a ways to go. Brands comfortable with the old way of measuring engagement are befuddled. “They really don’t have the kind of data Facebook does,” this person said. “They’ll never have the depth Facebook does, and to get that depth, marketers have to overlay third-party data on top of it.” That kind of in-the-weeds stuff is hard for brands.

“As a brand or as an agency, you need to prove that the ad is achieving a particular outcome,” said Mike Dossett, manager of digital strategy at RPA. Questions about shifts and purchase intents are “the questions buyers have been asking Snapchat and other platforms since day one,” he said.

A Snapchat spokesperson defended the platform, saying that it has built measurements faster than any other companies. The platform offers measurement via 11 partners, including Moat, Innovid, Nielsen Mobile Digital Ad Ratings and Google Doubleclick. Purchase intent, for example, is provided by Millward Brown and Oracle Data Cloud.

Another worry, though, is how much data Snapchat is willing to share about its users. The company claims that according to Nielsen research funded by Snapchat, it reaches 41 percent of 18- to 34-year-olds in the U.S. And, supposedly, the vast majority of its users are under 40. But beyond that level of nuance, things become unclear. One brand-side executive said he asked Snapchat what the breakdown was, and it was closer to 90 percent of those users were between 14 and 22 — not exactly demographics brands what to target. “It’s a black hole of nothingness,” said this executive.

Snapchat initially declined to share an age breakdown; a Snapchat spokesperson told Digiday after this story was published that 21 percent of its audience is between 13 and 17; 32 percent is between 18 and 24, and 28 percent is between 25 and 34. About 20 percent are above 35. About half of new users in the U.S. are above 25.

It’s true that the platform is evolving: A 2015 campaign by McDonald’s using geofilters — one of the first paid geofilter campaigns — was sold, according to this person, on a CPV basis. Those views still haven’t been fulfilled, which suggests McDonald’s lacks an understanding of Snapchat user behavior. Now, Snapchat has largely moved away from CPV as a metric, since it’s hard to know what constitutes a view, and sells ads on a CPM basis.

Paul Matson, director of social engagement for the U.S. at McDonald’s, said that geofilters were and are a way to add an experience to the company as a brick-and-mortar retailer. “Because we were the first brand, we took on the added benefit of not knowing what we were going to learn,” he said. The brand continues to have geofilters, but it has heavily focused on making sure it is getting that measurement — did people use it, what did they do, and ultimately, did they buy more Big Macs?

‘The critical growth stage’
Snapchat needs brands on its side. Its parent, Snap Inc., is in the process of preparing for an IPO that may happen as soon as March next year, per reports. “Snapchat is on the critical growth stage, where it can continue its titan-like rise or jump the shark,” said Rohit Thawani, director of digital strategy at TBWA/Chiat/Day L.A., which worked with Gatorade on a Snapchat Discover game.

That process necessitates cozying up to brands. Snapchat has bulked up its ad sales team, created category-specific groups to service clients, and snapped up agency talent. And it’s also created a pitch that should make its products more attractive to brands. Those include the very expensive Snap to Unlock, which is available to advertisers who spent $750,000 in advertising in the quarter. The expense is manageable for bigger brands, but smaller brands balk.

Another common complaint from brands is that Snapchat, which is very secretive, often doesn’t communicate changes. For example, no one was given a heads-up before the introduction of autoplay in Stories, which changed how and when ads are shown. “That change wasn’t done in a way to help brands understand,” said a media buyer.

And in an attempt to create a more unified sales experience, Snapchat recently introduced a new ad deal where it gives publishers an upfront fee and keep ad money for itself. “That cut off the training wheels for brands because they could previously go to a publishing partner like Hearst and ask them to help it make brand content,” said a buyer. “Now, brands have to go straight to Snapchat.”

For Thawani, Discover has long been the place for new advertisers to dip a toe into Snapchat. “Snapchat definitely doesn’t communicate platform changes, maybe because they sort of don’t need to at all,” he said.

Ultimately, the reason marketers don’t want to acknowledge that Snapchat may not work for them is because nobody wants to be “that” marketer who pooh-poohed it — only to find that it completely blows up later, said one marketer.

Update: A Snapchat spokesperson offered an audience breakdown by age. This story has been updated to reflect that addition.