Literally everyone on the planet would likely accept that offer—everyone except Evan Spiegel, co-founder of Snapchat, who infamously turned down Mark Zuckerberg’s offer to buy his then-two-year-old app for a whopping $3b. 

Almost a decade later, it’s clear that Spiegel knew what he had and that $3b was just a drop—no, a penny—in the bucket. 

Snap Inc.’s (Snapchat’s parent company) current market cap is closing in on $50b and Spiegel is worth more than $6b.

How did Snapchat get there? 

You guessed it. 

Advertising. 

Virtually all of the company’s $4.1b in revenue comes from ads. 

Seriously. 

Ninety-nine percent of Snap’s revenue comes from companies buying ads—and they did a lot of that in 2021.  

Last year, advertisers spent 16% more than they did in 2020 as those from 580 companies promoted over 1.4k brands on the platform. 

Of the companies that advertised on Snapchat in 2021, 63% didn’t do so in 2020. 

That said, 32% of the companies that advertised in 2020 returned last year.

But that’s the past. 

What about now? 

How are advertisers spending so far in 2022? 

Let’s find out. 

How Advertisers Spent on Snapchat in Q1 2022 

To help you better understand how advertisers are thinking about Snapchat in 2022, we pulled data from 190 companies (396 brands) that bought ads on the platform during the first quarter of the year.  

Of these brands and advertisers, 46% and 27% (184 and 52) of them didn’t buy ads on Snapchat in 2020 or 2021. 

It’s impossible to know precisely why this is the case, but it may have something to do with Snapchat’s maturity. 

While Snapchat’s far from new, it’s still relatively early in its maturity curve compared to other digital ecosystems like Facebook and Google. 

This may have been enough to keep some advertisers away until now, especially those with smaller budgets that restrict their ability to experiment. 

For other advertisers, Snapchat’s impressive growth last year may have finally wooed them. 

According to Snapchat’s February 2022 financial results, Daily Active Users (DAUs) increased by 20% year-over-year to 319mm. 

That said, 47% of the companies we looked at had bought Snapchat ads before, indicating the stickiness of the platform’s ad products and the impact they can have. 

Snapchat advertising to the moon

Of the companies that advertised during Q1, 5% (nine) of them increased their spending by more than 1000% YoY.

The most well known of these companies was Samsung, which increased its spending to promote its Galaxy phones. 

This significant increase comes on the heels of a year in which Samsung already increased spending by 62x from the year prior.

UVNV, the company that owns Mint Mobile (yes, the one owned by Ryan Reynolds), is spending big, too. 

So far in 2022, UVNV has spent 87% of what it did last year—an impressive development considering it increased its spending by 43x in 2021.  

Finally, after a busy 2021 that saw it increase its Snapchat ad buys 14x YoY, Johnson & Johnson Services poured more dollars than ever into Snapchat to promote its brands, Stelara, Tremfya, and Zyrtec Allergy during the first quarter of the year. 

Q1 2022 Snapchat Top 5 Categories

We looked at a few brands that increased their spending in big ways this year, but let’s take a step back and look at Snapchat’s top 5 categories—after all, they accounted for 75% of the ad buys in Q1. 

• Media & Entertainment: These advertisers increased their spending by 20% in the first quarter of the year, thanks largely to Amazon upping its ad investment in its Prime streaming service, Audible and Twitch TV. 

The big spending from Amazon helped offset QoQ decreases by other names like Paramount (down 19% QoQ) and Warner-Elektra-Atlantic (down 86% QoQ).

• Apparel: These advertisers spent 25% more in Q1 than during the same quarter last year. 

Kering (Balenciaga and Gucci) and VF (Vans and Timberland) led this charge, increasing their buys by 116% and 308%, respectively.

• Travel: Advertisers for travel brands increased their investment in Snapchat by 119% QoQ compared to Q1 2021. 

Propelling the Travel category into the top 5 for the first time were Carnival, Royal Caribbean, the State of New Hampshire and Southwest Airlines, which makes sense as the world tries to make up for two lost years of travel.

• Tech: Despite only increasing by a modest 3% QoQ in the first quarter of 2022, Tech once again made it into the top 5. 

While Samsung was down 66% in Q1 compared to last year, Apple (beats Earbuds, iPhone and iPad) helped offset this with an increase by almost 1,000% QoQ.

• Pharma: Even though pharma advertisers decreased their spending by 29% QoQ—primarily driven by Procter & Gamble decreasing its spending by 95%—the category remained on the list of Snapchat’s top categories.  

Helping to keep it there was Novartis, which increased its spending on Snapchat by more than 100x QoQ as it promoted Kesimpta (used to treat certain forms of multiple sclerosis (MS) in adults).

What to Expect from Snapchat Moving Forward

Snapchat’s had an impressive run and has identified ways to attract brands to its platform despite a seemingly endless list of alternatives. 

That said, it’s certainly not resting on its laurels. Snapchat continues to up its advertising game to keep new advertisers coming in the door and existing ones inside its walls. 

A good example of this came earlier this year when it launched Catalog-powered Shopping Lenses, which give brands real-time results on SKU-level AR product engagement. 

Another improvement came when Snapchat rolled out multi-format delivery of ad creatives, allowing advertisers to use a single ad set across multiple ad formats and for Snapchat to optimize delivery. 

Said another way, advertisers can batch their Snapchat campaigns under the same roof and Snapchat’s ad technology will optimize them together rather than doing so in siloes. The result is better performance and efficiency. 

When you look at what Snapchat’s doing from an advertising standpoint and combine that with its proven ability to carve out market share, especially with the highly influential Gen Z, there’s no question what the future holds for Snapchat: a lot more ad revenue.

For more insights like these, sign up for our blog.

Snapchat is reporting growth in daily active users and subscriptions to its Discover content. What does that mean as publishers continue to find better ways to utilize digital media?

Yes, Snapchat is still a thing — in fact, it’s growing. From Q1 to Q2 2019, the social media platform added 13 million daily active users. With its Discover feature, Snapchat is giving publishing partners the chance to reach an audience of over 200 million users. 

And that format is proving itself for both Snapchat and publishers. 

Snapchat’s Format Proves Itself

“What was once a money pit for some publishers is now becoming more of a gold mine,” writes Deanna Ting at Digiday. Ting is referring to growth reported by a number of Snapchat publishing partners, including Hearst, Whistle, Group Nine, ESPN and NBCUniversal. More specifically, both Snapchat and Hearst both reported 40 percent YoY growth in subscriptions on the Discover feature. 

The growth in audience and ROI is there. 

“We have seen a notable increase in the previous few months and the trajectory of revenue growth we have seen has been particularly encouraging. It is definitely becoming a larger share of our media and social distribution business,” Joe Caporoso, senior vp of content and brand platforms at Whistle, told Digiday. “We have been encouraged by the revenue trajectory across all our franchises, including NewForm and Vertical Network properties, within the last quarter.”

So what does this mean for publishers? 

Emulating the Content and Advertising of Snapchat

Partnering with Snapchat or other social media platforms may not be an option for most publishers, but they can still glean something from the success. 

“It’s an exercise in figuring out what works without wasting too much time, money or effort in the process,” writes Ting. What works, it seems, is content created specifically with social, short form platforms in mind.

Snapchat’s main draw for both consumers and publishers is the personalization. Users get personalized feeds of their favorite content, and publishers use the platform to serve personalized, automatically placed ads based not only on user interests but also their behavior on the platform. Snapchat will show different numbers and types of ads to users who watch longform content versus those who swipe quickly, for example. 

Publishers should be asking both how they can replicate similar content on their own properties and emulate the advertising model for brands. 

“Social is the new cable pipeline,” Ashish Patel, chief insights officer at Group Nine, told Digiday. “Where we want to operate are on platforms where audiences are migrating to and spending time. Snapchat, at that time, was doing well with younger users with Stories product and we saw a lot of success there.”

The format, in other words, is not necessarily limited to Snapchat. TikTok is a more recent iteration of personalized, social content with a much larger (if more narrow) audience than its older counterpart. 

There’s no question that creating social-first content (let alone Snapchat-specific content) requires an investment from publishers. But now, at least, the ROI is clear. 

Krizelman expressed optimism in anticipation for the release of the official report from Snap Inc. He stated, “We are encouraged, but not surprised, to see SNAP have another positive quarter. The company has a healthy mix of both new and returning clients, has the loyalty of major advertisers like Comcast, Adidas, and Disney, and saw their roster of advertisers swell by 15% in Q1 2019.”

Shortly after Krizelman shared his predictions, Snap Inc. released strong Q1 Earnings. Snap Inc. reported, revenue increased 39% to $320 million in Q1 2019, compared to the prior year.

“In the first quarter we delivered strong results across our business with growth in daily active users and revenue,” said Evan Spiegel, CEO of Snap Inc. “Our new Android application is available to everyone, with promising early results. This month we announced several new products that we believe will drive further engagement and monetization. As we look towards the future, we see many opportunities to increase our investments, and will continue to manage our business for long-term growth.”

Snapchat Key Advertising Insights for Q1

MediaRadar reviewed advertising across Snapchat’s platform. Overall, Snap’s advertisers see success on the platform.

• The number of brands placed on premium Snapchat Discover channels is up 15% Q1 year-over-year.

• 58% of Snapchat’s Q1 2019 advertisers renewed from a prior period, which is a great sign of long-term adoption.

• Snap is also breaking new business. During Q1 2019, 42% of advertisers were new to the platform.

According to their earnings report, as of March, Snapchat reaches 90% of all 13-24 year-olds and 75% of all 13-34 year-olds in the U.S. Snapchat continues to defend the title of one of the most powerful platforms to reach them. MediaRadar shared, during Q1, Snapchat saw strength in the following key categories: Media & Entertainment, Tech, Retail, Apparel.

MediaRadar’s breakdown of Snapchat’s 2018 ad revenue by category

Top Snapchat Advertisers in Q1 2019

According to MediaRadar’s data, the top 10 advertisers on the platform increased their investment in Snap in Q1 2019. Snapchat’s top ad buyers are Comcast, AT&T, Mars, The Walt Disney Company, Adidas, Pepsi, Exxon Mobil, Procter & Gamble, Las Vegas Convention and Visitors Authority, and Verizon.

We anticipate the release of Facebook Inc’s earnings report later today. Snap Inc’s Earnings report was released at 4:10 pm, and stock prices jumped approximately 5% in the first 20 minutes after their earnings were released. Will Facebook have the same success in Q1 2019?

“Despite some negative headlines, Snapchat saw strong interest from advertisers throughout the year,” said Todd Krizelman, CEO and Co-Founder of MediaRadar.

The third quarter (Q3) was when MediaRadar saw the highest number of advertisers running ads on the platform.

The top five advertisers on Snapchat in 2018, divided by spend, were:

1. Comcast

2. Mars

3. AT&T

4. Adidas

5. P&G

“Brands in media and entertainment, technology and retail drove most of their ad revenue,” added Krizelman.

The top three product categories advertising on Snapchat, also categorized by revenue, were:

1. Media and Entertainment (~30%)

2. Technology (~13%)

3. Retail (~10%)

Collectively, these three product categories accounted for approximately half of ad spend on Snapchat in 2018, as shown by the second chart below.

5% of all companies that advertised on Snapchat in 2018 ran a sponsored lens. The product category that was most likely to run one of these sponsored lenses ended up being food.

Conclusion

“Snapchat’s user numbers stabilized, which contributed to better-than-expected revenue on the quarter,” said Todd Krizelman, CEO and Co-Founder of MediaRadar. “The good news is likely to drive even more interest from advertisers.”