People take pictures in front of the Snapchat Inc. headquarters on the strand at Venice Beach in Los Angeles, Calif.
Is there a
chance Snapchat is becoming a bigger threat to Facebook? Martin Sorrell, the
chief executive of WPP, the world's largest advertising firm, thinks it may be.
Sorrell
first told CNBC Tuesday that the firm's
clients spent a whopping $90 million on advertising on Snapchat last year—about
$60 million more than what WPP predicted would be spent on the app at the
beginning of the year. That amount means Snapchat's 2016 revenues are likely to
be higher than what the market currently predicts, CNBC reports, considering
WPP clients spent $90 million of the original $350 million that was expected.
"It
does become a threatening alternative to Facebook and I think that's the big
opportunity for them. We know Facebook have tried to buy Snapchat a couple of times, we know
that they've made product changes as a result of Snapchat's products,"
Sorrell told CNBC.
He
continued: "I think Facebook is concerned about the potential opposition."
The recent
controversy surrounding "fake news" and how it impacted the 2016
presidential election also gives Snapchat a leg up, Sorrell told CNBC:
"I think
with the measurement issues, with the fake news issues, and the fraud issues that the
internet faces, clients want to try and experiment," he said.
That aside,
Snapchat is also gearing up for an IPO that could reportedly value the company
at $25 billion, and ad spend on the app could
reach nearly $1 billion ($935.46 million) in 2017, CNBC reports—giving it a
chance to raise the stakes among more established companies like Facebook and Google. However, when compared to the amount that clients spent on advertising
on those companies, Snapchat still has a long way to go: In 2016, clients spent
$5 billion and $1.7 billion on Google and Facebook, respectively.
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