Undervalued Snapchat Worth Another Look, Study Says

Scenes from Snapchat.

courtesy of Snapchat

Trevor Testwuide, Measured CEO, calls Snapchat one of marketing’s most overlooked growth platforms.

It’s true. Snapchat entered the social advertising landscape more than a decade ago. Yet, for most brands, the platform remains a secondary allocation or a reach play behind the platforms that usually dominate quarterly planning conversations.

Last May, Snapchat introduced new goal-based bidding capabilities and expanded formats for Sponsored Snaps, including Chat takeovers and creator-delivered placements, alongside broader AI-powered automation tools across ad delivery and budget optimization.

The changes had a major effect. Snapchat adoption among Measured customers increased 11.1 percent, while median incremental return on investment (iROAS) rose 36.2 percent.

“We’ve really been driving innovation across the industry,” said Adrian Mulryan, head of global agency and strategic accounts at Snapchat. “We’ve launched many products that can close the gap. There’s a range of products that can help marketers reach their goals.

The report demonstrates that Snapchat is a platform that can deliver results at scale, Mulryan said, adding, “Obviously, the study is specifically focused on retailers. We have a number of retailers on the platform, but I think we can always see more. I think this will highlight to the industry, agencies and brands that we rebuilt the ad platform.”

“Snapchat’s been undervalued for a number of years. A lot of the conversations we’ve had were really about demystifying what Snapchat is today,” said Mulryan. “We have a unique audience. If you look at the results and look at our audience, we believe it is unique.”

Mulryan said that 92 percent Snapchat users include friends in their shopping journeys and 73 percent recommend brands and products to friends and family. “Our billion users are talking about purchases every day and recommending purchases every day,” he said.

Sonia Lapinsky, retail partner & managing director and head of Alix Partners fashion practice, said Snapchat can be “used very strategically, but retailers are looking at larger platforms, often assuming that’s where they’re going to get the bigger bang for the buck.”

“We’ve often been asked by retailers how they can access younger consumers,” Lapinsky said. “From our research, we found that teens are spending more time on Snapchat. They spend five hours a day on social in general and Snapchat ranks third, ahead of Instagram and Facebook. If you’re looking to reach a younger audience and capture these consumers earlier in their lifecycle, Snapchat is a good way to do that.”

Lapinsky, who said that Snapchat skews toward fashion, beauty and gaming, categories where peer discovery and recommendations tend to drive purchases, called the platform a social, family-friendly environment.

According to the survey by Measured, which looked across the 130 ecommerce brands in its portfolio, Snapchat accounts for just 5% of social ad spend yet delivers a median iROAS of $2.84, which is 19.3% higher than the blended incremental return generated by all social advertising for the same brands.

For brands that advertised on Snapchat, incremental return across search and social was 12.9 percent higher than for brands that didn’t invest in the platform. The increase is consequential because the brands studied allocated more than 63 percent of their advertising budgets to search and social.

Even modest improvements across channels that consume the majority of a budget can have an outsized impact on marketing efficiency.

“Globally you’ll have over $1 trillion dollars spent on media this year,” said Testwuide. “You still have so many brands that are spending $50 million, $75 million, hundreds of millions of dollars, leveraging these last touch metrics that do not accurately represent the contribution.”

“It seems like the industry is moving toward a stronger measurement, namely incrementality measurement,” said Testwuide. “It’s not just ecommerce. This is what we’re seeing now. I think there’s opportunity for Snap.”

“It’s a sliver of the spend but for folks that are using it, it can be a strong performer,” Testwuide said of Snapchat. “The other insight we identified is a halo effect, a meaningful halo effect. There’s a first order influence that the media has on the outcome, and then there’s a second order halo effect, which we featured in the research.”

These halo effects don’t appear in platform reporting. They become visible only when marketers measure incremental performance across the entire media mix, revealing Snapchat’s contribution beyond the revenue generated within the platform itself, Testwuide said.

“We’re trying to tell the market that the last click is updated,” said Mulryan, referring to the marketing attribution model that gives all the credit for a conversion to the final touchpoint. “We’ll demonstrate across the platform that there’s an incrementality there and that we can drive deeper results.”