09 March, 2017

Is there a benefit for Media Brands by Investing in Snapchat?


NBC Universal invested $500 million in Snap Inc. during its IPO last week. The move not only highlights the media company’s plans to attract a younger audience, but signals a shift to digital content consumption on social platforms.

Over the past year, NBC has teamed up with Snap frequently. From featuring Rio Olympics content to creating versions of some of its most popular franchises—including “Saturday Night Live” and “The Voice”—NBC has consistently turned to Snapchat to reach its massive and dedicated young audience.

“With the Snap investment, we have invested over $1.5 billion in promising digital businesses in the last 18 months,” NBCUniversal CEO Steve Burke said in a statement. “We will continue to be aggressive as digital content consumption increases. Investing in Snap is a key step in that direction.”

NBC isn’t the only media brand teaming up with the popular mobile messaging company. In February, Snapchat and A+E Networks struck a deal to bring a short-form show to Snapchat’s Discover platform. Snapchat also joined forces with BBC to bring extra content from its “Planet Earth II” show.

While more marketers have been investing in social platforms like Snapchat, TV remains the largest component of an average US adult’s media day, according to eMarketer estimates.

Still, time spent with digital—including social networks—exceeded time spent with TV by 95 minutes per day in 2016. That’s why an equity deal in Snap is a further sign of confidence in this emerging model of video programming, said eMarketer analyst Paul Verna.

“As more teens and young adults continue to choose digital and mobile platforms over linear TV, it becomes increasingly imperative to reach them where they are,” he said.

Snapchat usage among adults of all ages is growing. eMarketer increased its US usage projections for 2017 by more than 5%, predicting 70.4 million people in the US will use the platform.

What’s more, many people are turning to Snapchat’s Live Stories to watch live streaming video. Data from UBS Evidence Lab found that Snapchat held on as the third most popular channel for live video consumption. YouTube and Facebook Live took the top spots, respectively.

The UBS study found that a majority of US social media users watch video on Snapchat. Fully 84% of respondents said they did, though younger people were more likely than their older peers to do so.

Snapchat has been taking strides to make its ad features more appealing to advertisers. Earlier this year, the popular mobile messaging app tested two new ad units, one of which can help advertisers deep link within ads.

Features like this can help media brands like NBC not only promote content, but add a social commerce element to it.

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