Snap: Back to Reality. (Oh, There Goes Sanity!)

Is Snapchat’s financial report a warning for us all? The four letter word Twitter is blaming for low results (that’s ELON)… Some updates to Google Ads and Google Analytics… And more!

July 22, 2022

Snapchat Ad Revenue Drops 25%

In the menubar of my Mac at work, I have a little app that shows the current stock prices of the main social media and ad tech companies.

Got into the studio this morning to see red all across the board — and Snapchat, in particular, was down almost 40%.

A quick dive into the charts showed why — Snapchat’s parent company released its second-quarter earnings missing analysts' expectations so much that it dragged the rest of the sector down with it.

And worse: the company warned that "forward-looking visibility remains incredibly challenging." Translation: Dig in, we’re in the stink, and we’ll be here for a while.

To be fair, revenue was up 13% comparing this Q2 to last Q2, but was down 25% compared to this year’s first quarter. The revenue hit occurring across both brand advertising and direct response advertising.

Snap Inc.'s net loss rose to $422 million for the period, compared to $152 million last year.

So while this is a revenue thing, it’s not a user thing. The platform saw an almost 20% increase in daily active users, to nearly 350 million, and said gains were also made in North America — not just globally.

Quoting the company:

While we are excited about the progress we have made in terms of community growth and engagement, demand growth on our advertising platform has slowed significantly.

The combination of macroeconomic headwinds, platform policy changes and increased competition has limited the growth of campaign budgets. In some cases, advertisers have lowered their bids per action to reflect their current willingness to pay.

Snap Inc. projected that daily active users will reach 360 million by the end of Q3, but declined to predict its future financial performance due to “uncertainties related to the operating environment.”

Image: Snap Inc.

Twitter’s Q2 Is “Musk’s Fault”

As Snap Inc. blames economic headwinds for its revenue miss, can you guess who Twitter is blaming?

The company released its Q2 2022 results today. Revenue totalled $1.18 billion, down 1% year-over-year, which Twitter attributes to "advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk."

The platform also revealed Musk's waffling acquisition cost the company $33 million in Q2.

Even with Musk's takeover drama, Twitter's advertising revenue grew 2% to $1.08 billion from a year earlier. While the platform's daily active users increased by 17% year-over-year to 238 million. However, both user growth and revenue fell short of analysts' estimates.

According to an analyst from Insider Intelligence, the future doesn't look so bright as the company navigates its legal battles.

Quoting the analyst:

Twitter is now in the unenviable position of convincing advertisers that its ad business is solid regardless of how its court battle with Musk ends, and its Q2 earnings show that the platform has its work cut it out for it to do that...

Will user growth be enough to get a piece of your advertising budget?

Twitter’s New ‘Status’ Option

Twitter appears to be close to launching its 'Status' feature.

Unlike a status on Instagram or Facebook that displays when users are online, Twitter's status will be similar to Reddit flairs. The new Status option lets you add a small, customizable status update to your tweets.

Screenshots show several default status options, including:

  • ‘Shower Thoughts’

  • 'Spoiler alert'

  • ‘Hot Take’, and

  • ‘A Thread’

By tapping on the Status, you can view its discovery page, which lets people Tweet with the same status, as well as discover relevant content. Like a hashtag but different. This could be useful for grouping a series of tweets together, such as your brand's promotions.

Twitter has not officially announced when the update will roll out, however, several users are noticing the option on the app.

Tip vs Review: The Order Matters

Two of the most important parts of a service transaction — other than the sale, of course — are how much a customer feels compelled to tip, and what sort of review they give the service.

Knowing what’s in consumers’ brains during these parts of the purchase is something marketers have tried to decrypt for ages.

One recent study tried to determine whether marketers could change these consumer actions by switching up the order — for instance, how does asking for a review first affect how much consumers leave as a tip? Does the order matter? Review, then tip? Or tip, then ask for a review?

JJ Chen is the co-author of that paper. He is an Assistant Professor of Marketing at City University of Hong Kong. I spoke with him recently, and asked him what they learned.

JJ: What would you guess? I guess you read the paper. But what was your intuition?

TOD: My gut feeling was that if you asked for the review first, that that would indicate ‘we care about what you're thinking’ and ‘we value your opinion,’ and therefore it would increase the tip.

JJ: That's what I think a lot of what consumers thought [when we] ran a pretest… However, that's actually not what we found.

Why do people tip? There are a lot of reasons why people tip from a psychological and social standpoint, one of that is to reward the service professional: ‘I got fantastic service, I want to reward that person.’ The other reason involves social norms. You don't want to be seen as a stingy person, right? But at the same time, you want to save money, because money is a limited resource. So there's this tension going on between how much to tip and how much not to tip, then rating comes into play here.

When you have not rated the service professional, you feel an obligation to actually tip that person to reward or to conform to social norms.

However, rating is very valuable nowadays to service professionals. For example: Better ratings on Yelp is going get you better businesses. Bad ratings on Uber is actually going to get you terminated from the platform

So rating is seen as extremely valuable to service professionals. Once you have rated, you could tell yourself, ‘I've already given something valuable to that person. So I don't have to give you as much money; I have at least partially fulfilled my obligation to either reward you or conform to social norms.

Our full conversation covered how, specifically, marketing managers should change the purchase flow to maximize tips, whether the reverse is true — does asking for a tip first reduce the rating a consumer gives, details on an interesting experiment they did using a Chinese restaurant, and much more.

You can hear the full interview exclusively on the Premium Feed, which you can find at TodayInDigital.com/premiumfeed.

You can also find the study abstract online by searching for “Order Matters: Rating Service Professionals First Reduces Tipping Amount”. JJ’s coauthors on the paper were Jinjie Chen, Alison Jing Xu, Maria A. Rodas, and Xuefeng Liu.

Instagram’s New Reels Features

It occurred to me after I put the newsletter to bed that my snark yesterday about Meta’s announcements may have caused me to gloss over some of Instagram’s announcement details.

I stand by the snark, but this is, after all, a newscast first, so let’s review the three updates to the app they announced, in addition to the whole “every video will now be a Reel” thing:

  • In the coming weeks, you will be able to remix public photos.

  • Expanded Remix layouts: Choose between a green screen, horizontal or vertical split-screen, or picture-in-picture reaction view to add your own video commentary to existing reels.

  • If you have your own hot take? Rather than having your remix appear at the same time as the original reel, you can now add your clip after the original so it plays sequentially.

Auto Upgrades for Smart Shopping

Here is your reminder to upgrade to Performance Max before Google does it for you.

Google Ads announced yesterday that it will begin automatically upgrading Smart Shopping Campaigns to Performance Max.

The company "strongly recommends" using the "one-click" upgrade tool in Google Ads to upgrade your campaigns and not wait for the automatic updates.

Google said you will have access to the self-upgrade tool for two months on average if you use Smart Shopping campaigns before automatic upgrades begin. A notification will also be sent to you in Google Ads 2-3 weeks before your campaigns are automatically upgraded.

There will be some exceptions, such as Smart Shopping campaigns using features not yet available in Performance Max, which will be automatically upgraded in early 2023. Advertisers who are not yet eligible for automatic upgrades will receive more information later this year.

Google noted that once your campaigns are self-upgraded using the tool or automatically upgraded, learnings from your previous Smart Shopping campaigns will carry over to your new Performance Max campaigns.

LinkedIn Finally Launches Carousels

LinkedIn announced yesterday that it is testing a carousel posting option.

Until now, brands and businesses have had to create makeshift carousel posts using PDF attachments to create individual frames, but now, the professional network is finally making it a post format.

When you tap on 'Create a Carousel' you’ll be taken through the creation process, which like other platforms, lets you choose multiple still images and/or video clips to add to your post.

Two Google Analytics Changes

A couple of nice updates to Google Analytics were released this morning.

First, anyone with access to a property can now apply filters to a detail report to see a subset of the report data. For example, you can now apply a filter to see only the data from Android apps while filtering out data from iOS apps. Google Analytics removes the filter when the person who applied the filter leaves the report. Learn more.

Second, anyone with the Editor (and above) permissions to a property can now create filtered custom reports, enabling you to create a more guided reporting experience. For example, you could create two filtered custom reports. In one report, you display only mobile data, and in the other report, you display only web data. Learn more

Images: Google

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