Unless you are living under a rock you know that Snapchat's stock closed up 44% on March 2, the day they went public. Pretty good for a company that lost $515 million last year. (Balakrishnan, 2017)
But given Snapchat's popularity with Millennials and Gen Z, the belief is that the company will eventually make money. Do you think that's true? Do you use Snapchat? Have you ever bought anything based on a Snapchat post?
Research says that Mills follow brands on social media almost as much for entertainment value (38%) as they do for information (42%). So adding sunglasses to your pics, sending yourself to exotic places, and then sharing with friends seems like it would be right up their ally. (Loechner, 2017)
But, while Snapchat considers this Michael Kors effort to be a success, I can't help but notice that purchase intent only increased by 6%, and there is no mention of a sales increase at all. (Snapchat, 2017). Hmm. I was taught that unless your effort generates a 10% increase in sales it is considered a failure.
I'm not the only one who is skeptical. According to a study published by RBC Capital Markets and Ad Age - Google, Facebook, LinkedIn, Twitter, YouTube, Instagram, and even Yahoo all had a better ROI than Snapchat. And now that Instagram and Facebook have added similar features is it any wonder that Snapchat's recent user growth has been relatively flat? (Slefo, 2017)
Which brings me back to my original question. Have you ever bought anything based on a Snapchat post? What about other social media? Which works best for you? Why?
Balakrishnan, A. (2017, March 2) Snap closes up 44% after rollicking IPO. cnbc.com. Retrieved March 17, 2017, from http://www.cnbc.com/2017/03/02/snapchat-snap-open-trading-price-stock-ipo-first-day.html
Loechner, J. (2017, March 16) Millennials Follow Brands; GenX, Contests; and Boomers, Promotions. mediapost.com. Retrieved March 17, 2017, from http://www.mediapost.com/publications/article/296926/millennials-follow-brands-genx-contests-and-bo.html
Pomerantz, L. Michael Kors Sponsored National Lens. Snapchat website. Retrieved March 17, 2017, from https://storage.googleapis.com/snapchat-web/success-stories/pdf/pdf_michael_kors_en.pdf
Slefo, G. (2017, March 14) Snapchat Receives Poor Grades From Marketers. adage.com. Retrieved March 17, 2017, from http://adage.com/article/digital/snapchat-receives-poor-grades-marketers/308270/