Model promoting is coming again, Snap, suggesting the Fb boycott helped the third quarter
In this screengrab, Evan Spiegel, CEO of Snap, Inc., takes the stage at the virtual Snap Partner Summit 2020.
Snap said it is seeing positive momentum in the ad market, including the branded advertising segment, which struggled in the early days of the coronavirus pandemic. The company also said its third quarter results were supported by advertisers looking for "platforms that share their corporate values," a skewed reference to Facebook's practices for moderating content at major national events like the George Floyd protests.
The company's shares rose more than 20% in after-hours trading after the company reported third-quarter earnings, sales, and daily user counts that all exceeded expectations.
Jeremi Gorman, chief business officer, said in prepared remarks that Snap saw the third quarter "the beginnings of a rebound in brand advertisers and continued resilience from direct-response advertisers."
Snap worked with advertisers during the quarter to adapt to a time when many consumers were shopping at home. For example, Snap's augmented reality tools have been used to offer consumers virtual "try-ons" as locker rooms at many retailers remain closed and new precautions are taken when sampling items such as makeup.
As the economic fallout from the pandemic weighed on advertising budgets earlier this year, performance-based or direct response (DR) ads remained stronger than other forms of advertising. These DR advertisements include methods that encourage consumers to take immediate action, such as: B. Downloading an app or buying something from an ecommerce website.
In contrast, branding advertising usually conveys more of what a company is about or doing than trying to increase sales immediately. UBS analysts said in a recent statement that while the direct reaction has led to a rebound, branding has returned more slowly.
In their prepared remarks, Gorman also said brands and other marketers were using the "period of uncertainty" as a time to evaluate their advertising spend. Facebook, in particular, has come under fire in recent months for handling hateful content and misinformation and has prompted some advertisers to boycott the company this summer.
"We saw a lot of brands trying to target their marketing efforts on platforms that share their corporate values," she said. "This gave us the opportunity to get in touch with advertisers and agencies in real time to ensure that our existing partners as well as new prospects understood our offer in terms of our values."
She said the company's sales team had meetings with executives to discuss the company's branding and privacy principles.
"We have implemented a strategy to ensure that advertisers who invest in Snap have early and sustained success on our platform as they scale with us. We believe that our teams' customer service needs to align with our principles Brand security and the strong ROI we achieve All of the advertising partners we have achieved have contributed to our growth this quarter, "said Gorman.