Advertisers say they're not fans of Snapchat — and it's great news for Instagram (SNAP, FB)

Bloomberg Spiegel snapchat

  • Advertisers overwhelmingly prefer Instagram to Snapchat.
  • A new survey by Cowen of ad buyers highlights the challenges Snap Inc.'s ad business is facing ahead of its Q2 2018 earnings.
  • Instagram is even beating Snapchat at its own game, with 90% of advertisers preferring Instagram Stories to Snapchat Stories — a format it invented.


Advertisers are souring on Snapchat, and Instagram looks poised to benefit in a big way.

Financial services firm Cowen published on Friday its mid-year survey of ad buyers, and the results are likely to make uncomfortable reading for Snap Inc., with buyers saying they spent less money than expected on the teen-oriented app and that their clients vastly prefer Instagram.

There are three key data-points that illustrate the challenge facing Snapchat:

  1. "47% of respondents indicating that they spent less on video ads on SNAP than originally expected."
  2. "The ad buyers we surveyed were asked to rank each platform based on the quality of content and SNAP ranked 8th out of 9 possible choices, ahead of only Ad exchanges."
  3. The overwhelming majority of ad buyers indicated that their clients prefer to advertise on Instagram Stories (90%) over Snapchat Stories (10%)."

It's worth noting that the survey was of only 70 ad buyers, so it might not fully reflect broader market sentiment. But it still provides an insight into how some advertisers are viewing the platform ahead of the  release of its Q2 2018 earnings on August 7.

The third stat is particularly brutal: Snapchat literally invented the Stories format, and now Facebook-owned Instagram is beating it at its own game. (Though this is an improvement on Cowen's last survey, in which a full 96% of ad buyers preferred Instagram.)

The picture for Instagram, meanwhile, is much more rosy. It has become a major destination for advertisers in its own right, not just an off-shoot of Facebook. Indeed, Morgan Stanley analysts estimated this week that Instagram now accounts for one third of Facebook's overall ad revenue growth

"In addition to core Facebook being a top Digital ad platform, it also enjoys the spoils of Instagram which is growing into a leading platform itself. Overall, Instagram showed up the best of any company in the Survey," the Cowen analysts wrote. It ranked first in terms of advertisers net spending intentions (advertisers spending more minus those spending less) in 1H18 at +26%, and ranked first for Digital Video net spending intentions at +30%."

There have been growing concerns that teens — Snapchat's core userbase — are beginning to distance themselves from the platform. A recent survey of Gen Z's by Business Insider found that a fifth of those surveys said they are using Snapchat less, citing the social pressures it creates and an ill-fated redesign.

SEE ALSO: Facebook is overflowing with groups offering pirated films — and says it won't do anything about it

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Contributer : Tech Insider https://ift.tt/2uwlYjy
Advertisers say they're not fans of Snapchat — and it's great news for Instagram (SNAP, FB) Advertisers say they're not fans of Snapchat — and it's great news for Instagram (SNAP, FB) Reviewed by mimisabreena on Saturday, July 14, 2018 Rating: 5

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