NEW YORK: Sir Martin Sorrell, CEO of holding group WPP, has revealed the company intends to double its spend on Snapchat, despite saying the platform is “a flea on the elephant’s backside”.
According to comments by Sorrell in a recent interview with CNBC, WPP plans to double its spend in the photo-sharing social media platform in the coming year, with investment potentially reaching $200m, up from $100m last year.
Projected spending on Snapchat, however, pales in comparison to what WPP is spending on the likes of Facebook. The company spent more than $1.5bn on Facebook last year, and Sorrell anticipated that amount rising to “well over” $2bn in the year ahead.
“(WPP’s spending on Snapchat is) at very low levels. It's $200m versus $6bn or $2bn for Facebook. So, you're talking about a flea on the elephant's backside,” Sorrell.
“I think (Snap is) potentially more competitive as the third force,” he added.
However, with similar ‘story sharing’ products launched by Instagram and Facebook, ad agencies will be looking to Snapchat to up its game. As parent company Snap Inc approaches its second quarterly earnings report this week, Snapchat has faced market jitters with stock price nearing an all-time low and increasing concern from advertisers and agencies alike that their money may be better spent elsewhere.
CNBC cited several ad agencies that complained about Snapchat’s approach to metrics with some being perceived as less than transparent: for example, Snapchat uses an abstract “score” rather than follower counts. And powerful social media influencers – which are increasingly crucial in millennial and Gen Z targeting efforts – are turning to other platforms, especially Instagram which offers more transparent data.
“It felt like they spent all their money at Cannes, instead of doing roadshows and getting in front of agencies,” Andy Amendola, senior director of digital strategy and media at ad agency The Community, told CNBC.
“If they are really interested in making a profit, they should make it easier for advertising agencies to work with them.”
Data sourced from CNBC; additional content by WARC staff