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Advertisers prefer Instagram over Snapchat

News, 17 March 2017
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NEW YORK: Even though Snapchat has more than 150m users and recently listed with a market valuation of $25bn, it seems advertisers prefer to allocate their budgets to Instagram by some distance.

That is according to a series of studies published recently by RBC Capital Markets, in partnership with Ad Age, which found close to twice as many marketers expressed interest in advertising on Instagram, the Facebook-owned photo-sharing app.

Based on responses from 1,600 marketers, the RBC Capital Markets survey revealed almost two-thirds (64%) were most interested in Instagram compared to just 37% who said they were interested in advertising on Snapchat.

The disparity appears to stem from lower return on investment (ROI) that marketers have experienced with Snapchat on top of other issues, such as poor targeting, difficulty measuring key performance indicators and declining user engagement.

When asked to rank various leading social platforms in terms of ROI on a scale capped at eight points, marketers allocated Snapchat a score of just 3.43.

Only AOL fared worse with a score of 2.88, while Google (6.98) and Facebook (6.72) were well ahead in the opinion of respondents.

Nevertheless, the survey did find that 119 marketers said they plan to significantly or modestly increase their budgets allocated to Snapchat. Although, by comparison, around 450 said the same about Google and 461 will boost their spend on Facebook.

Advertising Age noted that when Snap, the parent company of Snapchat, went public last month it warned that its popularity might plateau.

The app is facing a growing challenge from very similar, or almost identical services, now provided by the likes of Instagram Stories.

And just last week Facebook announced the launch of Messenger Day, which allows users to share photos and videos as they happen before they disappear after 24 hours.

Data sourced from Advertising Age; additional content by Warc staff

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