76% of ad execs haven't placed ads on Snapchat, study says

Brief:

Seventy-six percent of advertising professionals said they haven't advertised on Snapchat, per a survey that RBC shared with Mobile Marketer.
Future spending intentions on the image-messaging app have improved this month since April, when RBC last surveyed advertising executives. However, spending on the app was weakest among platforms including Facebook, Instagram, Twitter, Google's YouTube and Pinterest.
The survey also found that 95% of ad professionals said they're buying ads on social platforms. More than half (54%) of those surveyed allocate over 20% of their media budgets to social, a record high in the past seven years of RBC's semiannual surveys.

Insight:

RBC's findings suggest that Snap needs to boost efforts to educate advertising professionals about its platform, which has a desirable demographic of young adults and teens. The company estimates that 75% of U.S. consumers ages 13 to 34 are active on Snapchat. Snap CEO Evan Spiegel this week said at an investor conference that younger audiences may be an impediment to adoption among older brand executives who make media-buying decisions, The Wall Street Journal reported. Media agency executives who don't use Snapchat are less likely to see the benefit of placing ads on the platform.

There are some indications that big brands are giving Snapchat another look and finding promising results. Papa John's boosted ad awareness 6% with an augmented reality (AR) lens on Snapchat last Valentine's Day, with more than 25% of users who swiped up on the AR lens buying a pizza. Jack in the Box recently sponsored an AR lens on the app that urged users to customize virtual burgers for a chance to win prizes.

Snap in the past few years has overhauled the Snapchat platform to make it more appealing to advertisers, and hired executives with stronger digital ad experience. The company shifted toward programmatic ad buying that uses software to automate the process of bidding for digital ad placements in real time. That shift made the platform more accessible to a wider group of advertisers who may not have considered running a campaign on the image-messaging app, but cut prices for its ads.

When Snap went public two years ago amid surging user growth, it had been heralded as a possible threat to the digital media duopoly of Google and Facebook. But the company lost significant momentum in 2018 after an app redesign alienated many users. While Snap has shown stronger momentum this year in ad sales and user growth, it now faces competition with social video messaging app TikTok, which is growing quickly with consumers and catching the attention of marketers. Some of Snapchat's gains are attributable to a recently redesigned Android app that broadened its appeal. The company boosted its user base by 8% to 203 million in Q2 this year — handily beating estimates of 192 million. The addition of 13 million users during the quarter marked its best performance since going public.