It’s been a month of pain for Snap — the parent company of messaging app Snapchat — but its stock is shooting up on Friday after a leading advertising exec reiterated his confidence in the company.
Martin Sorrell — founder and CEO of WPP, one of the preeminent ad juggernauts worldwide — said his company will be putting $200 million into Snap this year, doubling WPP’s investment of $96 million in 2016. Still, the marketing tycoon said it would be at “very low levels” in comparison to more established digital ad platforms like Facebook.
“It’s $200 million versus $6 billion or $2 billion for Facebook. So, you’re talking about a flea on the elephant’s backside,” said Sorrell.
Sorrell had originally shared his $200 million Snap earmark back in April with financial news site Cheddar. But his Friday comments were a needed jolt for Snap, reminding investors its youthful 166 million user base is still an attractive bet for advertisers. Snap shares were up more than 4 percent to about $13.50 a share — a welcome change for shareholders after its stock fell 20 percent in the last month.
It also didn’t hurt that Snap was in the news after it emerged Google offered to pay $30 billion for the app before its IPO.
At the same time, Snap continued to bolster its ad tools, releasing “Advanced Mode” for its Ad Manager platform on Friday. It’s not as exciting as a new selfie filter or a dancing hot dog, but from a business standpoint it’s an important move. A Snap spokesperson outlined to TheWrap its ability for advertisers to quickly target Snapchatters with hundreds of ad permutations, as well as use Snap spreadsheets and audience data for future placements. Giving advertisers another reason to turn to its platform will only help Snap as focuses on adding users internationally.
Coupled with Snap’s recent acquisition of a startup using location-based technology to measure if ads generate foot traffic, the company is starting to address issues that flared up during its anemic Q1.