Snapchat's strategy, is not like Facebook's "Go big or go home". It favors well developed markets in North America and Europe in so-called quality-over-quantity manner. It is branded as app for the young. After announcing it earnings in March, it became obvious the app is not as popular among young as Facebook. Well, its reach is still impressive, considering the fact the number of daily active users is eight times smaller compared to its Silicon Valley rival. How good is that?
As eMarketer’s findings suggest, 59 percent of 12- to 17-year-olds, 68 percent of 18- to 24-year-olds and 42 percent of 25- to 34-year-olds use Snapchat at least once per month each month throughout the year.
Facebook’s numbers for those age groups are 64 percent, 77 percent and 81 percent, respectively. Facebook has 1.3 billion daily active users while Snapchat has just an eighth (!) of that, which is 158 million.
Facebook-owned Instagram, is popular among young age groups too. But as Recode remarks, Snapchat has a much tighter hold on 12- to 17-year-old future consumers than Instagram— nearly four times as many! In that matter, let’s not forget Instagram has 400 million daily active users.
Facebook is a bit older than Snapchat and had plenty of time to pick up users of all ages. As Recode writes, the issue with Facebook and even Instagram and Twitter is that “your mom and your grandma are also on it, perhaps making it a less cool place to directly market to the youngs”. Moreover, Facebook has 33 percent of people 65 and over regularly using the app. On the contrary, Snapchat has under 2 percent of that demographic.
WhatsApp, one of the most used messaging apps, introduced a new feature – status updates. The new version of status updates (an old one was also the app’s initial feature) is already available across Europe, and will likely roll out globally in the weeks soon.
When choosing between Instagram Stories, Snapchat and Facebook status updates, users will now be able to share their “feels” on WhatsApp. Launched this Monday, status update lets you share photos, videos, and GIFs with all your contacts at once. As WhatsApp recently redesigned its camera app, you can personalize media – with emoji, text, drawings and everything between. If it sounds and looks familiar, don’t worry. It certainly looks like Snapchat (or other rival apps)! When opening renewed Status tab, you can see updates from people in your WhatsApp address book. And like on rival platforms (Instagram, Snapchat), status updates expire after 24 hours.
“Starting today, we are rolling out an update to status, which allows you to share photos and videos with your friends and contacts on WhatsApp in an easy and secure way. Yes, even your status updates are end-to-end encrypted,” co-founder Jan Koum wrote in a statement. “Just like eight years ago when we first started WhatsApp, this new and improved status feature will let you keep your friends who use WhatsApp easily updated in a fun and simple way.”
So far, it’s been kind of difficult for advertisers and brands to make a business case for Snapchat but that might change as social giant continues to overhaul its advertising offering. Actually, its advertising revenues growth might surge: worldwide, it will generate $366.69 ( €328,53) million in ad revenues this year, with that figure jumping to $935.46 ( €838,11) million in 2017, eMarketer predicts.
“Advertisers are attracted to Snapchat for its broad reach among young millennials and those in Generation Z, which are valuable demographic groups for many businesses,” said eMarketer principal analyst Cathy Boyle. “To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads, and more sponsored geofilters and sponsored lenses.”
Yet we need to take into consideration Snapchat currently generates 95 percent of its ad revenues from the US alone (we’ll return to that later). However, as soon as it begins to monetise users in other countries where it has a substantial user base—particularly the UK—the non-US share of its ad revenues will grow. By 2018, a quarter of its ad revenues will come from outside the US.
In the US, Snapchat’s “Discover” feature generates the largest share (43 percent) of the company’s ad revenues. That seems to shift shift next year, as “Stories” feature overtakes Discover as the dominant ad revenue source, generating 37.8 percent of the company’s US ad business, according to eMarketer.
While Snapchat has a 31.6 percent share of social network users in the US, it only captures 2.3 percent of social network ad dollars, having launched its ad platform in mid-2015. It faces challenges as it competes with more established platforms Facebook and Twitter, particularly in the areas of targeting and measurement.
“Snapchat has improved its targeting capabilities and partnered with 11 measurement firms to address the concerns voiced early on,” said Boyle. “What it has yet to prove is whether it can consistently deliver a better return on investment for advertisers than other social networks.”
Instagram launched its Stories feature two weeks ago and it was quickly declared as a Snapchat killer or at least something that will help Facebook crush its fast-growing rival. New (early) data, provided by marketing intelligence company SensorTower, show Instagram's Stories – for now - have no drastic impact on the use of Snapchat.
SensorTower’s data was collected on base of information from its mobile panel, which is comprised of millions of users in more than 30 countries, giving them an indicative baseline for overall use. Although it’s only been two weeks, the data does suggest that maybe both Snapchat and Instagram Stories will be able to co-exist by appealing to different market subsets – through there are some clear differences and noted usage trends emerging, based on feedback about Instagram’s new tool.
In an article on Social Media Today, Ziad Ramley, who works on the social media team at news network Al Jazeera, outlines there are some important differences between Instagram’s and Snapchat’s Stories which also suggest the two may actually co-exist. Ramley notes that they’ve been getting a heap of comments on their Instagram stories, that multiple people can be logged onto their Instagram account at once (which can’t be done on Snapchat), and that videos are in higher resolution, all great benefits of the new platform. But there is a catch: Ramley says that because Instagram Stories content is delivered in higher quality, the trade-off is that load times on those Stories are slower, and that’s lead to a significant reduction in viewer retention.
In Balkans, although there are many successful sports teams and talented athletes, sports marketing agencies are nowhere to be seen. Bruno Blumenschein, Vedran Vukušić and Marijan Palić, the team behind Zagreb-based company Overtime, are an exception with a deep knowledge and appreciation of all facets of the sports industry.
Many still didn’t recover from Euro 2016 finals yet another big event is officially getting underway today – Rio Summer Olympics. We talked to Overtime team about both from marketing perspective and and they gave us a great insight on the development of sports marketing in ex-Yugoslavia and role of social media in sports as well.
Would you please introduce yourself and your agency for our readers? What’s your mission? What do you stand for?
Overtime Sports Marketing is a company focused on communications in global sports ecosystem (most people would say industry, but we see it as an ecosystem because it is H2H (human-to-human) world and not B2B (business-to-business) or B2C (business-to-consumer) world). Our mission is to help positive individuals, groups and collectives in the sports ecosystem, and to promote the idea that every goal you set your mind to is achievable. That is why our motto, our tagline, hashtag and main message is #ItsPossible
It doesn’t matter if you want to:
Sellout the gym you are playing in (like we are doing for Euroleague basketball club Cedevita & World Cup in gymnastics)
Build an online community (like we did for Grawe insurance company when they entered the world of running as a sponsor)
Find new ways of communication (like we did through the first global ebook about Snapchat in sports)
Let the fans feel the passion (like we did for RTL Television during our award-winning coverage of Men’s World Handball Championship 2015 & Hanza media company (ex-EPH) during our EURO 2016 coverage)
Get your athletes more media coverage and introduce your sport to the broader public (like we are doing for judo in Croatia)
Organize sports camps (like we are doing in Croatia and Switzerland, through a partnership with basketball professionals, Damjan and Ivan Rudež and NBA Europe)
Or any other idea that has a connection with sports.
Along with mentioned activities, we are strongly developing sports marketing education through ItsPossible presentations/workshops/lectures that are a mix of motivation lectures, presentations of case studies and pure education about communication in sports.
We are planning to launch a sports marketing e-learning platform and to continue to develop content interesting for sports professionals.
We believe agencies as such need to develop new business models and it is great to see a number of marketing agencies in South East Europe growing their own development teams/companies, along with their own projects and products.
By not developing scalable products, agencies are sticking only to the revenue stream of “pure clients” and that market will continue to decrease. Number of big companies are changing their processes, moving activities in-house. They will continue to outsource services, but we don’t see it as a main revenue stream for Overtime.
On the surface, it looks like there are not that many sports marketing agencies in Balkans. How come and how would you compare the development of sports marketing from ex-Yugoslavia to, let’s say the West?
South East Europe is a great talent pool, not only in terms of athletes, but also in terms of sport professionals, creativity and sports fans. So, while talent is not questionable, what is questionable is the mentality of people. Most of the marketing done in this region is what we call “political marketing”. People in charge of clubs, associations and institutions are used to pick up their phones and call whoever is in charge of finances in state-owned companies or state-oriented companies and make a deal for i.e. sponsorship. That kind of the system is not based on values but on “belonging to the pack” moment and such practice is not sustainable. Another thing that is bad with such practice is that it is putting a bad reputation on networking. Modern sports ecosystem in the West is based on values and innovation and we see that coming (slowly, but surely) in this region as well. Unfortunately, for now that is mainly visible through financial problems big clubs and federations are having.
Things will get better when they realise sponsorship is not a donation but an exchange of values. They need to define their value and sell potential sponsors on it so market-based companies get interested.
We see a great thirst among young people in ex-Yugoslavia for sports marketing and that thirst and overwhelming desire to improve situation will turn things around.
It is great to see their love for sports doesn’t come from “let’s make millions” but from “let’s do something that we love and that can change things in our society”. Money will come with success, as it is its standard escort.
We had a great lecture in Belgrade in front of the packed student crowd. At the beginning of our presentation we had them standing and shouting “I can do it!” Whatever that “it” is. We published the video on our Facebook fan page so they can turn to it during their low times and see themselves shouting “I can do it” even when everyone around them say “You can’t”.
Some great professionals are helping South East Europe get more knowledge, professional services and campaigns. SPORTO conference in Portoroz is a must-attend for every student or sport professional. Vetturelli company is a beacon in terms of sponsorship in sports. KHL Medveščak and KK Crvena zvezda are providing great experience for their fans. Zadar S event is showing what can be done in basketball terms and there are number of individuals in clubs, associations and institutions trying to push things forward.
We’re well done with the Euros yet Rio is just around the corner. But let’s discuss Euro 2016 first. Portugal won on the pitch, who won and who lost among brands? In one of your blog posts you wrote it was “an advertising war”.
Yes, it was a really interesting battle on social. Adidas is the winner in the category “Most shareable brand” with their campaign #FirstNeverFollows. They generated more than 1.6m shares across Instagram and Twitter, seven time more than the closest competitor. TelcoOrange also included fans in their communication during Euro 2016 with the #OrangeSponsorsYou madness. As you probably know, every matchday fans of countries playing on that particular matchday could show support for their team on social networks. Eiffel Tower would, at the end of the day, light up in the colors of the country whose fans showed the most support. It made a big impact on social media in Croatia, and it seemed like every Facebook user used #CRO hashtag during the matchday, it was ‘crazy’.
Another brand whose presence was felt during EURO is Nike. They made an interesting story about Cristiano Ronaldo, and the video (which is unusually long, 5:57 min) was seen over 52 million times.
For example, Turkish Airlines have also done some great work and managed to change the perception of people answering the question which brands are associated with football. Turkish Airlines increased the perception from 6% to 9%, and in the same time Emirates decreased from 16% to 13%.
Among the losing brands of EURO are Continental Tires, Hisense and Socar, because even though they were the official partners, not many fans heard about them, let alone think they are the official partner.
Social media is becoming complementary in sports. For example, Twitter just signed a contract with Sky Sports and let’s not forget about Snapchat as you wrote an e-book on use of Snapchat in sports. What role do social media play in sports from marketing point of view?
We cannot forget that Twitter also had live coverage of Wimbledon tennis matches. Their new video product showed tweets alongside live video. The view showed live video (which included play by play commentary and interviews) alongside tweets with the Wimbledon hashtag. It was a really cool feature, one that could change the way we follow sports, and people reacted very well to it.
We cannot forget about Snapchat, an app that covers a totally different type of content. Snapchat shows uncensored, practically live content from the dressing room, stadium tunnel or the bus / airplane in a funny, cool way. Snapchat is bringing fans and athletes closer than we could’ve imagined, and the fans love that, especially millennials. Brands can be represented and built very well by using interesting content on social media. It’s important especially because social media today is people’s online living room. People don’t like something they don’t care about. By using sports teams’ / athletes’ content, to involve their brands, companies get a chance to knock on people’s “doors”. Cristiano Ronaldo has more impact on the same content published on his Facebook fan page, than on the brand’s (Nike’s Facebook fan page). The reason is quite simple. People love and believe him much more than Nike. If some content isn’t ‘plastic’, people will believe in content that their sports heroes and clubs publish on social media, even if it’s sponsored content.
Moreover, good use social media enables that even smaller teams and athletes can get some recognition. Could you name one good example from the region?
I believe social media can help athletes and smaller brands in their recognition. Look at athletes with social media, they have a bigger chance that their success will be followed by the media. Why? News portals and newspapers don’t have many people in their office anymore and they can’t call all players and athletes. But they can follow them on social media and write a story based on players’ posts. The same thing is also with smaller teams. There is an interesting project in Bosnia and Herzegovina (Banja Luka) with a small football club Rekreativo. They have hilarious & specific communication on Twitter that is focused on sarcastic view on football world but including achieving their goals. Overtime’s co-founder Marijan Palic even took part in Rekreativo’s campaign of gathering donations for their youth team and their trip to Barcelona.
It seems like fans nowadays are consuming news only on social media. Do you think it could reach the point where the field is over-saturated, especially in football? How would you compare social media use in sports marketing in the region to the World?
Social media are the best possible solution for people, because, at the same place you can find out what is happening to all your friends, bellowed news portals and clubs / athletes.
I think it’s not possible to have an over-saturated situation in football, because this is a number one sport in our region, and people like to consume this content. We still don’t have great examples in sports marketing, and the main reason are the old presidents/directors in clubs, and the thinking: “marketing is only an expense and nothing more”. But, there is a hope in this segment, because KHL Medveščak, Hajduk and Dinamo are doing a great job in this field. Rijeka used to do a great job, but they just stopped at one point. The biggest problem is lack of athletes on social media in Croatia, it’s unusual for players to have an official Facebook page or Twitter profile, and clubs do nothing to help at this time. The only positive example comes from Dinamo Zagreb who created web pages and Facebook pages for some of their players. All over the world you can see that many clubs use their players pages to create content, publish news or to communicate with fans. I think there is a lot of room for improvement in this segment.
Off to Rio 2016. It looks like there is a controversy after a controversy. Ban of Russian athletes, diseases, corruption, etc. How will this affect brands and marketing in that matter?
Interesting question. Brands will need to decide about it, and it must be very tough for them. Why? Let’s look at FIFA at the moment, as they had problems with corruption in the past. Why would their sponsors leave? They are in a great place at this moment, and if they leave, their competitors will take their place. Adidas could leave for moral reasons, but how many people would care about it? In this case, FIFA has many options because there are other suppliers. With this move, Adidas would lose money, brand awareness and they would open up a great opportunity to their competition.
I think that the ban of Russian athletes won’t affect brands and marketing in that matter. Brands will think about it, maybe release a statement for the media, but nothing else.
And now to the biggest controversy of them all: Rule 40. It will get interesting to see how brands are becoming creative, right? We’ve seen some good examples in the past.
Rule 40 is a great example of how the whole world of sports need to rewrite its own values and policies. USOC even sent a letter to the sponsors of athletes who will compete at Rio 2016, but are not USOC’s sponsors, that they “cannot reference any Olympic results, cannot share or repost anything from the official Olympic account and cannot use any pictures taken at the Olympics”. True grey area if you ask us, because Olympic result as a trademark? No way. Great ambush campaigns will continue to be created and so far Heineken is a leader.
Last two questions. What’s the next big thing in sports marketing and what’s your advice to youngsters who want to get into sports marketing?
The next big thing – concept of the altar is history (i.e. Facebook fan page where the millions of us are getting bits & pieces from our idol’s life). We believe in 1-on-1 communication through apps like Snapchat that provide real-time & no-filters kind of communication.
Second thing that can be really huge for sports ecosystem is – virtual reality. Imagine Los Angeles Lakers being able to sell a court side seat not only once for $100,000 but one million times for $50. Each playoff game! Complete new way of fan experience that people will have.
Advice to youngsters – believe in yourself, try, fail, get up and fail again. True difference between a master and a beginner is that the master has failed more times than the beginner has even tried.
Listen to this great 4 minute speech from Alibaba’s founder Jack Ma.
“Before your are 20 years old educate yourself and learn/get some experience. Before you are 30 years old follow someone and go to small company to learn dreams. It is not about which company you work at but which boss you follow. Enjoy the show!”
Snapchat is becoming an ad platform? Make sure your ads are funny, different and short!
This article by Marko Mudrinić was originally published on netokracija.rs.
“Popular app – especially among teens – could soon experience a major change with the launch of the application-programming interface (API). With this it would become a real ad platform. This would mean better and easier ad buying, and targeting for agencies and brands. But there is a question of quality if that happens. Is it possible that Snapchat holds to its ‘cool vibe’ and at the same time become an industry, worth a few hundred million dollars?
Today most of the digital campaign focuses on Facebook and Instagram, but Snapchat left its mark also. We can find some good Snapchat campaigns in Croatia, and Fanta brand in Serbia positioned itself as a leader in mobile marketing.
So, we can’t say that Snapchat its just an app for teens…”