Snapchat is considering running branded promotions in shows
(BI Intelligence)
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Snapchat is considering allowing brand integrations in its original programming, according to AdAge.
A brand integration can be defined as content that interweaves a brand into the script or storyline. For example, Lucky Strike cigarettes' global sales grew 44% after being featured in “Mad Men” for five years.
Snapchat has historically been opposed to such promotions — it created policies against partners such as Buzzfeed from selling branded content deals in their publisher channels. However, mounting pressure to combat slowing user growth and recover from a missed revenue expectation in Q1 may be attributing to the company’s change of heart.
Here is how running ads in Snapchat’s original content could affect stakeholders:
Users may be turned off by the in-content ad experience. For example, 69% of over 3,000 Americans surveyed in February skipped Snapchat ads “always” or “often”, while the figure was 80% for 18- to 24-year-olds. If these stats are indicative of reactions of Snap’s user base, original content ads may not be received very well.
Advertisers are in a position to gain. With original programming as an additional channel to run ads in, advertisers may relish the opportunity. Snap’s user base of roughly 166 million DAUs and nearly 30 minutes per day of engagement may bode well for branded integrations. Brand integrations lead to a 16% lift in brand memorability when integrations were aired in the same program as standard ads for the same brand, according to Nielsen.
Show creators will also be winners. Creators may start to see piqued interest from companies wanting to run branded integration campaigns, which provides the creators with additional revenue that can be reinvested into their shows.
Snapchat could initially gain from increased ad revenue. Snap has already signed deals with companies including NBCUniversal, Discovery, BBC, and ESPN to create original shows for Snap TV. This presents a swath of brand integrations and increased ad revenue opportunities for Snap, but the amount of revenue will likely be dependent on how users react to these types of promotions. Additionally, initial ad revenue growth may be stymied by users unhappy with ads.
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