Report: Snapchat offers discounts on ad placements
- Snapchat, the camera and messaging application with about 166 million users worldwide, is offering discounts, bonuses and credits as incentives to ad buyers, according to a report in Digiday that cites unnamed sources.
- The offers include a 10% bonus media coupon and discounts on Snapchat’s self-serve platform, according to media buyers who requested anonymity. The deals are being offered through the middle of next month as parent company Snap Inc. starts to wrap up its second quarter.
- The promotions are intended to get more advertisers on the platform so that the company can show investors that sales are growing, Brian Cristiano, chief executive at Bold Worldwide, told Digiday.
Snapchat's parent company Snap Inc. is making the transition from Silicon Valley unicorn to a public company with investors who keep score by the stock price. Shareholders can be forgiving of monetary losses if they see a longer-term future in audience growth and loyalty that will appeal to advertisers down the road. Snapchat has attracted some big brands like Wal-Mart and Pepsi for one-off campaigns as they look to target millennials, but the platform's niche positioning — and sluggish user growth — could hurt efforts to try to build ongoing programs with advertisers.
For its Q1 earning report, the company disappointed Wall Street on almost every metric, with much of its Q1 loss attributable to compensation expenses after its $24 billion initial public offering, the biggest tech IPO since Alibaba's in 2014. Shares plummeted more than 20% after its first-quarter report.
While offering advertisers discounts reeks of desperation to fill unsold inventory, the stock hasn’t moved on those reports. Tech stocks are still hot this year, and Snap can continue to ride the wave of enthusiasm of its March 2017 IPO. But ultimately, the company needs to grow sales and its audience base to avoid Twitter’s fate of seeking a deep-pocketed buyer. After all, Facebook was said to have offered $3 billion for Snapchat four years ago, per The Wall Street Journal.