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Snapchat’s ad sales strategy follows Facebook’s playbook

Snapchat doesn’t have to make up the advertising playbook as it goes; it has found a blueprint that works just fine: Facebook’s. As the messaging and media app matures as an ad platform, it is increasingly following the Facebook way of building an ad sales team and appears to be avoiding the mistakes of less successful platforms.

Like Facebook, Snapchat’s ad sales team is built around verticals, not organized by region, with a focus on industries like auto, Hollywood, telecom, retail and fast food. Snapchat also placed an early bet on an ad platform, an application programming interface for marketing developers to help grow the business. Facebook set the standard for such ad APIs, and Snapchat’s looks a lot like Facebook’s, working with a select group of marketing tech partners and creative agencies.

“Snapchat is verticalized. It’s a lot better to start verticalized than to retroactively verticalize,” said one digital agency exec. “Facebook was setup similarly, and Snapchat is taking cues from all the platforms, taking what worked before and avoiding what didn’t.”

Also, instead of going for direct-response ad dollars out the gate, with marketers that demand sales, downloads and web traffic straight from the ads, Snapchat has adopted Facebook’s love of brand dollars. That’s where ads are created for mass appeal, and the sales pitch to advertisers is all about how they can reach an elusive digital audience with messages that raise brand awareness or purchase intent.

Facebook does have a robust app-install business, generating ad dollars from developers who need to meet massive download numbers. Snapchat is working with some app-install marketers, but only very selectively at this point.

Snapchat is not copying what Facebook’s done exactly. Facebook was not without its missteps on the ad front. For instance, Snapchat emphasized the creative aspect of ads when it launched its API last month, because it was learning from one of Facebook’s early mistakes, which flooded the site with crappy ads. Snapchat is looking to avoid that problem. (The company declined to comment for this article.)

Snapchat started with a Los Angeles office and has expanded to sales offices in New York, Chicago and London. The company has brought in big hires from all its major rivals — Google, Facebook and Twitter — to cover everything from ad sales, agency relations, creative services to ad technology specialists. Key hires include Sriram Krishnan, who once led Facebook’s ad network, and Gunnard Johnson, formerly of Google. Also, agency sources said they have seen a few Twitter sales reps head to Snapchat in the past few months.

Snapchat has a ways to go before it is in the big leagues as a sales organization. Buyers say Snapchat is by no means as responsive as Facebook is to brands’ needs or able to staff accounts as robustly. Advertising sources estimated that Snapchat is closing in on an ad sales and support staff of 100 people, a fraction of what an organization like Facebook deploys. Facebook has 35 sales offices around the world with five support outposts, according to its public filings.

“They’re coming to agency meetings, doing presentations, forwarding along case studies, and investing in advertising ideations, giving a level of access beyond ad sales with creative and tech teams,” said Azher Ahmed, director of digital at DDB Chicago.

Other ad industry insiders said they are seeing the same attitude from Snapchat as it goes for more revenue. The company is said to be on pace for a public offering and reportedly expects $350 million in ad sales this year.

Snapchat recently opened more inventory by placing ads among Snaps from everyday users. It also has a self-serve platform for its filters that brands buy and make available to users based on their locations. Snapchat also has 3D animated lenses, which are more sophisticated filters and infinitely brandable.

“Just two years ago, they had no capacity; they just had a platform. Last year, they worked quite diligently to build out the platform, so they could have a future to monetize,” said an agency exec whose clients have worked with Snapchat from the start. “Now, Snapchat is in the process of securing big-dollar partnerships with the Fortune 500 brands, who will show how advertising can be done there.”

The post Snapchat’s ad sales strategy follows Facebook’s playbook appeared first on Digiday.


Source: digiday.com

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