Its been somewhat of a ghostly week for Snap.
On Tuesday, it lost two of its top ad executives chief business officer Jeremi Gorman and vice president of sales Peter Naylor who have been poached by Netflix to lead the streaming giants new ads business. (Both are fundamental figures in the ad industry and also have been instrumental to Snaps growth in the last couple of years.)
SNAPS AR ADVANTAGE
- Snap has long pioneered AR lenses in-house and through collabs
- Brands are increasingly testing Snaps AR capabilities to go beyond social commerce and into VR
- Snap can easily experiment and roll out new AR products and formats
On Wednesday, the business announced layoffs for 20% of its employees around 1,200 of its current 6,400 employees within a broader corporate restructuring. Other changes include shelving many other projects including its self-flying Pixy camera drone, newer standalone apps like the social map app Zenly and the music-focused platform Voisey. Snap may also stop producing new content for Snap Originals but could keep demonstrates already exist and shift its Minis and Games products into maintenance mode with minimal investment.
Despite Snaps major restructuring, marketers say the business has a possiblity to refocus the social platform around its key differentiators such as for example augmented reality. And that appears to be area of the plan.
In a memo to staff this week, Snap CEO and co-founder Evan Spiegel said the consolidations are an effort to refocus on three core areas: community growth, revenue growth and augmented reality. (Snap estimates that total savings from the restructuring will undoubtedly be around $500 million set alongside the second quarter of 2022.) Within the changes, the business has promoted numerous executives. Jerry Hunter, who joined the business six years back after nearly ten years at Amazon, has been promoted from senior vice president of engineering to the role of chief operating officer. Ronan Harris, who’ll lead Snaps EMEA efforts, can be joining from Google, where he was vice president and managing director of U.K. and Ireland.
I really believe Jerrys promotion can lead to both better short-term execution in addition to a higher velocity of longterm innovation, Spiegel wrote.
For a long time, Snap has pioneered the usage of augmented reality lenses through in-house efforts and collaborations with creators and brands. In accordance with Steven Moy, CEO of the advertising agency Barbarian Group, Snapchats augmented reality capabilities are almost just like a 1.hands down the metaverse then one brands are increasingly testing because they move beyond social commerce and into virtual reality, Snapchat becomes a lot more appealing.
Its similar to an entry-level metaverse, Moy said. You dont have to go completely into Decentraland and lots of those metaverse experiences which are still just a little clunky.
Its similar to an entry-level metaverse.
Steven Moy, CEO, Barbarian Group
Several advertising executives noted that Snaps capability to quickly experiment and roll out services for augmented reality along with other formats gives it an opportunity to play a straight bigger role in driving innovation with content. (In addition, it gives it an advantage amid the clone wars played by other internet sites.) Within an interview last month concerning the broader social media marketing landscape, Ellie Bamford, global head of media and connections at R/GA, said Snap has been best if you quickly innovate and diversify.
Theres quite a bit that theyve done to attempt to look at these pockets where they are able to provide value and infiltrate, Bamford said. Thats smart, and I certainly in no way think Snap is performed or out from the game or irrelevant. Their product development team is exceptional.
Kelsey Chickering, a principal analyst at Forrester, said Snap has been a business leader with various features such as for example augmented reality. However, she said it hasnt had the opportunity to maintain with the addictive nature of TikTok and hasnt captured exactly the same magic. In accordance with Forresters 2022 Media and Marketing Benchmark survey, 42% of U.S. online adults between 18 and 25 said they thought TikTok was an addictive platform, but just 21% said exactly the same about Snapchat.
Advertisers arent embracing Snapchat with always on social media marketing budgets, like they’re Meta, she said. Snapchat is a superb channel for seasonal or tentpole-based activations, rendering it a nice to possess line item on a media plan. The economic uncertainty where marketers are operating can make them more centered on the old, hardworking channels, leaving platforms like Snapchat behind.
Despite Snaps recent struggles, some marketers praise the outcomes theyve seen on the platform. For instance, its still a high platform in the U.S. for New Balances fashion and lifestyle products, said New Balance CMO Chris Davis. He said the platform continues to eclipse other internet sites with regards to return on ad spend and impressions, especially with lower funnel marketing. This past year, New Balance which includes been a beta test partner for new tech with Snap created an augmented reality campaign starring NBA star Kawhi Leonard for the launch of its limited edition sneaker in collaboration with Jolly Rancher. (The campaign reached a lot more than 7.3 million users and sent 250,000 to the brands website.)
Their team is wanting to incorporate us into new initiatives and technologies, as exemplified by AR activations previously, Davis said. We’ve seen brand favorability upsurge in these launches aswell.
Vinny Rinaldi, head of media analytics, data and technology at The Hershey Company, said Snapchat still continues to attain a huge amount of eyeballs and time allocated to the platform especially from ages where purchase behavior is shifting and that the chocolate companys marketing on the platform is still effective.
I wouldnt say Snap is doomed in virtually any capacity, Rinaldi said. Like everybody else, the ad tech headwinds are real predicated on market dynamics and were seeing hiring freezes in addition to company layoffs, but many of these companies were overvalued in line with the market in the first place.