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Snap has lagged behind social competition in the past, but now the platform is looking to boost its business with a focus on augmented reality. This element is being steadily strengthened. Some say this immersive content will help the platform stay connected with younger audiences and expand beyond traditional social media advertising.
In recent years, Snap has focused more and more on its AR efforts. But the real question the company faces now is whether adding his AR element to the platform will help it continue to grow in the face of competition and uncertainty.
Just as Meta, the parent company of Facebook and Instagram, eventually needed to diversify its slowing social media business, Snap may need to pivot to AR. Additionally, there were challenges for both the company and the industry as a whole. Snap lost its primary advertising leadership last year. They were poached by Netflix to lead the streamer’s advertising business, but the company laid off his 20% of its workforce as part of a major restructuring.
Experts believe that the use cases for AR to engage people are increasing, and that this could form a path for Snap’s growth. Some marketers are testing AR as an easy way to experiment with the metaverse that can attract younger audiences. They also point out that Snap’s ability to quickly roll out and update these types of features makes the app more appealing than others.
Ben James, chief innovation officer at data-driven media agency GALE, said: “The industry doesn’t always value the stable and the shiny new, but Snap does. [in AR] That is what differentiates us from our competitors. ”
Advertising growth
The social media giant experienced an initial slowdown in revenue due to economic uncertainty and a softening advertising sector, but Snap outperformed some of its competitors and showed steady growth in its advertising portals. Last quarter, for example, Snap started driving more traffic to its advertising portal in October as Twitter traffic dropped.
Specifically, traffic to Twitter’s advertising portal, which is distinct from on-platform activity, dropped 19% year-over-year in October last year, while traffic to Snap’s advertising portal dropped 19% year-over-year, according to intelligence platform Similarweb. A 47% increase year-on-year. Traffic to Snap’s subdomain for ad-buying activity also increased by 163% last October as Tesla boss Elon Musk continued to take over Twitter.
With regulators still pushing for a TikTok ban, Meta app user growth stagnant and Twitter’s future uncertain after Musk acquisition, Snap could benefit from rival’s challenge . Based on Q3 2022 revenue, Snap’s revenue increased relatively modestly by 5.7% year-over-year to total $1.13 billion. But even if Snap tries to differentiate himself as a leader in AR, it could be years before those investments pay off. Snap plans to report its fourth quarter 2022 earnings on January 31st.
Still, as agency executives explained, AR has the potential to help Snap attract younger users and brands to experiment with other forms of social advertising on the platform. James Townsend, Executive Global Chief of the Stagwell Brand Performance Network, said:
Additionally, some AR content may outperform other forms of advertising, said James Addlestone, chief strategy officer at performance marketing agency Journey Further.
“AR execution typically involves the constant presence of a brand, or the distinctive assets of that brand, throughout the experience. A well-executed AR offers a huge advantage over digital displays: subsequent brand recall is lower,” added Addlestone.
Snap did not respond to a request for comment. However, the company said in December 2022 that users overall engage in AR experiences an average of 6 billion times a day.
Possibilities of AR beyond entertainment
While many of AR’s capabilities today are for entertainment purposes, like changing your appearance or trying out new fashions, experts say there’s room for more business use cases. Ben Ducker, executive creative director at Journey Further, says his AR capabilities in Snap have allowed the platform to focus on his social commerce, for example.
“We’ve all had furniture and clothing delivered to us, but it’s nothing like a static image on a website,” says Ducker. “The future power of AR in this space is vast. It is inspiring and allows for fresh product advertising techniques. Gone are the days of catalog photography.”
Addlestone added that Snap isn’t currently part of the “standard” marketing mix like Meta’s properties or Google, but could eventually get a bigger share of the budget.
“Snap and AR are generally seen as stunt-based, top-of-the-funnel perceptions, but we see a shift towards products and lower-funnel activities going forward,” Addlestone said. said.
What gives Snap an edge here is that user behavior interacting with AR is already “done at Snap at scale.” “We can expect more brands to embrace AR as part of their broader marketing plans, not just social, which will be key to the success of his Snap next year,” he said. Addlestone said.
With a team of over 300,000 creators and developers worldwide, Snap created nearly 3 million AR lenses last year, the name of the platform’s AR experiences, including games, shopping and other interactive content. said there is. Snap is also experimenting with a small group of creators and developers building Lenses with digital goods, AR items and tools, which will roll out in select markets in the future. am.
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