“They’re going to hit some challenges and marketers are gonna start to ask questions when they get out of the experimental budget phase,” Facebook’s head of adtech said about Snapchat today. While Facebook tries to collect as much data about users as possible to prove its ads work, Snapchat has tried to avoid being creepy, despite that hindering its potential monetization — it refuses to use retargeting and other tracking methods.
Today at Sharethrough’s Native ad conference, Facebook’s Dave Jakubowski was asked by Recode’s Kurt Wagner whether Snapchat would be able to win over advertisers if it doesn’t have the same insights about performance.
Jakubowski admitted that Snapchat is a cool product. It’s hot. All the cool kids are using it.” but then launched into this rant, implying Snapchat doesn’t have the data to keep advertisers happy:
“Can they do things in a new way? Gee, life would be boring if they couldn’t. I hope so.
But they’re going to hit some challenges and marketers are gonna start to ask questions when they get out of the experimental budget phase. I don’t know where they are. I have no idea. But when you start to get to a certain spend level with marketers, it doesn’t matter who you are. Or just when the dollars get big enough, somebody someplace says ‘What am I getting for this?’ As an up-and-coming thing, if you’re the new app, if you’re the new publisher with the greatest content, if you have a sizable audience and you can prove that you can sell products by advertising to your audience and that number is sizable, you can do anything you want. Because every marketer wants to sell more products. And If you can demonstrate value, you can do it.
That’s hard to do out on an island all by yourself because marketers always want to compare you. ‘How is this relative to that? What about my existing customers? Were they gonna buy anyway? I have these customers who got all the way to my shopping cart, I just want to get them over the hump. How are you gonna help me with that?’ Marketers are smart and so they’re going to have increasing demands as they get deeper and deeper into whatever it is that they do. That’s true of Facebook. That’s true of Instagram. That will, I imagine, be true for Snapchat and anybody else. So if you can prove that you can move products for marketers, marketers will listen. But all of that proving comes through measurement.”
Snapchat declined to respond when asked.
Jakubowski’s comments are a wordy way of saying Facebook believes it has the data necessary to prove ads lead to sales lift, and Snapchat doesn’t. This means Snapchat will have to rely on deeper, more attentive engagement to more eye-catching full-screen ads to attract advertisers. Facebook’s methods might be a bit unsettling at times, but its enhanced personalization makes the News Feed and the ads you’re going to see anyways more relevant.
On the other hand, Snapchat’s lack of a deeper permanent record about you seems to coax more frequent ephemeral sharing out of users. Teens feel comfortable being themselves when every detail about them doesn’t live forever in an ad engine.
Plus, Snapchat has been making strides to improve the measurement of its content and ads. It recently added 10 adtech companies as measurement partners, alongside new ad units.
In the end, it may just boil down to where these companies are in their lifecycle. Once upon a time, Facebook refused to implement retargeting based on outside data or put ads inside the News Feed. But as the IPO loomed, it conformed to advertiser pressure to improve targeting and ad visibility.
We’ll see what story Snapchat sings when it’s its turn to go public.