Snapchat Woes: 96% of Senior Ad Buyers Say They Prefer Instagram Stories

A new survey of senior ad buyers by Cowen found that 96% of of respondents prefer to buy ads on Instagram rather than Snapchat.

The survey, which asked the ad buyers to rank social media platforms based on metrics such as user targeting, return on investment and campaign measurement, saw Snap ranked last in every category.

“On the whole, Snap was the lowest rated relative to other Social networks, given low relative marks on return on investment; targeting; and data, analytics and measurement,” wrote analyst John Blackledge in a note. “Ninety-six percent of ad buyers would prefer to advertise on Instagram Stories vs. Snap Ads (4 percent), but underscoring the opportunity ahead, more than 50 percent has yet to purchase Instagram Stories ads or Snap Ads.”


Cowen additionally found that 48 percent of ad buyers who placed an advertisement on Instagram Stories in 2017 plan to repeat in 2018.

On the user side of things, Cowen’s findings were more positive with Snapchat managing to increase user engagement throughout 2017. A survey of 2,500 consumers found the average time spent on Snapchat grew from 33 minutes per day in the first quarter of 2017 to around 38 minutes per day by the fourth quarter.

Those between 18 and 24 years old used the platform 53 minutes per day in the fourth quarter, according to the analyst, leading to an overall uptick in engagement for those already using the app.


And while Snap should be pleased with increased engagement Blackledge did note that Snap may have only so much room left to grow.

“We dug a little deeper into the time spent numbers and found that Snap’s strong showing was highly influenced by the strength of the younger age cohorts,” said Blackledge. “This poses an issue as Snap has already reached 70 percent penetration of 13- to 34-year-olds in the U.S., France, the U.K. and Australia. The challenge for SNAP is whether the user base can age up.”

Snap Makeover

The company’s recent redesign of the Snapchat application

“We believe investors are eager to hear a response to the recent app redesign, and in particular whether or not it can jumpstart daily active user growth,” wrote Blackledge, adding that Snapchat users are also spending more time on the application.

Snap is in the process of rolling out its biggest redesign which is intended to drive active user growth with a simplification of the interface as well as an algorithmically sorted feed.

The redesign also aims to more clearly divide content from users’ friends and from celebrities and brands.

Cowen lowered their view on Snap stock to a $11 price target – which represents a 28 percent drop over the next year.



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