Companies are struggling to figure out Snapchat - Axios
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Companies are struggling to figure out Snapchat

Lazaro Gamio / Axios

Snapchat stories by companies have great engagement stats but the rules Snapchat places on stories mean advertisements must run separately, where the effectiveness is less clear.

Why this matters: Snapchat's parent Snap is preparing to go public with a valuation of more than $16 billion because more than 150 million people use the app every day and investors think that will turn into a gusher of money from advertising. But if advertisers don't feel like the platform is delivering, Snapchat could end up an investor disappointment like Twitter, instead of a home run like Facebook.

A study by Snaplytics finds that Snapchat stories (not ads) have an open rate of 50% and that 88% of people that start watching a story watch it all the way through — up to 11 snaps on average. Those are tremendous engagement stats. But companies can't use those kinds of stories to sell. Snapchat makes companies buy ads if they're going to explicitly push products or market content.

So the question is, are Snap ads effective? We don't exactly know.

  • Maybe yes. Snapchat is private about releasing statistics around their ad campaigns, but ahead of its IPO, they shared a few case studies in its S-1 filing that show the effectiveness of brands using Snap Ads. Han Ma, Associate Director at Ketchum Digital, who works for an array of companies on Snapchat, says overall, companies can leverage more refined targeting methods by buying ads. "Stronger analytics lead to stronger insights, which lead to better opportunities to optimize content and strategies for brands," Ma tells Axios.
  • Maybe no. Some third-party analytics providers say the ads aren't effective marketing tools. A new study by marketing analytics platform Fluent finds that 69% of Snap users report skipping ads on Snapchat "always" or "often," and that number rises to 80% among 18- to 24-year-olds, Snapchat's core audience. Fluent CMO Jordan Cohen tells Axios that millennials use Snapchat as a video messaging service, not a content service, and "that's why advertising in that format isn't that appealing to them."

Snap had revenue of $404 million in 2016, and though the company doesn't break out what comes from advertising, reports suggest that's where it makes most of its money. It ramped up its advertising efforts ahead of filing to go public and last year eMarketer projected the company would gross nearly $1 billion in advertising in 2017, nearly 2% of all social network revenue dollars in the U.S.

The big issue: Timing is a problem here. Snap ads could very well be more effective than third-party studies give them credit for, but ad buyers don't have confidence in the data. Snapchat waited too long to give them the type of measurement and reporting metrics that they are used to getting from companies like Twitter and Facebook, making them skepctical of Snapchat as a good place to buy advertising.

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New Trumpcare amendment would require states to define essential health benefits

(Alex Brandon / AP)

A final amendment to the American Health Care Act was introduced Thursday night by the authors of the legislation, a last-minute attempt to win conservatives over by requiring states to define what services insurers must offer enrollees.

Here's what's in the amendment, which will be voted on in the Rules Committee tomorrow before the bill heads to the House floor for a final vote:

  • Beginning in 2018, states will determine essential health benefits. There are currently 10 federal ones under Obamacare, which apply to the individual and small group markets.
  • The repeal of the Medicare payroll tax on high earners would be delayed until 2023.
  • The original bill's Patient and State Stability Fund would get an extra $15 billion to be used for maternity coverage and newborn care, as well as mental health and substance abuse disorder treatment.
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Apple says flaws in latest WikiLeaks disclosure are all old

Mike Deerkoski / Flickr cc

Although much was made about a new batch of iPhone and MacBook flaws disclosed by WikiLeaks on Thursday, Apple says the issues appear to all be old, since-fixed vulnerabilities.

"We have preliminarily assessed the Wikileaks disclosures from this morning," Apple said in a statement to Axios. "Based on our initial analysis, the alleged iPhone vulnerability affected iPhone 3G only and was fixed in 2009 when iPhone 3GS was released. Additionally, our preliminary assessment shows the alleged Mac vulnerabilities were previously fixed in all Macs launched after 2013."
Apple added that it has "not negotiated with Wikileaks for any information."

We have given them instructions to submit any information they wish through our normal process under our standard terms. Thus far, we have not received any information from them that isn't in the public domain. We are tireless defenders of our users' security and privacy, but we do not condone theft or coordinate with those that threaten to harm our users.
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Trump orders tougher Visa screenings

J. Scott Applewhite / AP

President Trump is ordering tougher screenings for Visa applicants as part of his "extreme vetting" policy. Last week Secretary of State Rex Tillerson sent four cables to U.S. embassies and consular officials demanding scrutiny be tightened up, as originally reported by Reuters.

The new rules don't apply to 38 countries who can be admitted using the visa waiver program, including Australia, New Zealand, Japan, South Korea, and most of Europe.

Profiling and delays: This will include "mandatory social media check" if an applicant has been in a territory controlled by ISIS. Such checks are rarely done at present, former officials told Reuters. Consular officials and immigration experts told the NYT this will make it much more common to be denied a Visa to the U.S. and they fear this might lead to profiling based on nationality. It will likely also extend Visa review times.

Context: The cables were issued to complement the travel ban that was upended by a court in Hawaii, but some provisions were remedied to abide by the temporary restraining order. Namely, questions specifically aimed at applicants from the six countries listed in the ban were rescinded.
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Trump's ultimatum: If vote fails, Obamacare stays

AP

Budget Director Mick Mulvaney has just laid down a gauntlet to House Republicans on behalf of President Trump: pass this bill, or Obamacare remains in place.

Members of the conservative Freedom Caucus want more concessions but, according to Mulvaney, Trump will not negotiate further.

The president demanded a vote tomorrow, and now it appears he will get it. He is all but daring Republicans to vote no.

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Twitter is weighing whether to build a paid version of TweetDeck

Richard Drew / AP

Twitter is considering whether to build premium software geared toward power users of its service.

The company already owns TweetDeck, a program geared toward those who juggle multiple Twitter accounts and spend a lot of time on the social media service. A paid version could offer extra features and bypass advertising.

Andrew Tavani, managing editor of Women in the World, first spotted a message from Twitter about the potential service.



Still pondering: It appears the idea is still in the early stages and Twitter hasn't decided if it'll build this. "We're conducting a survey to assess the interest in a new, more enhanced version of TweetDeck," a Twitter spokesperson told Axios, adding that Twitter is "exploring several ways to make TweetDeck even more valuable for professionals."

Why it matters: Twitter acquired TweetDeck in 2011 from developer Iain Dodsworth, but hasn't done much with it since as far as expanding features and capabilities. This could be a welcome option for users for whom Twitter is a critical part of doing their job.

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Here are the AHCA changes demanded by the Freedom Caucus

Alex Brandon / AP

The key changes to the Republican health care bill demanded by the conservative Freedom Caucus:

  • A repeal of ACA's Essential Health Benefits (like emergency or maternity treatment) guaranteed under Obamacare
  • An elimination of the "single risk pool," which prevents insurers from splitting the market into healthy and sick groups
  • An elimination of rating restrictions, which allow insurers to base premiums only on age, area, tobacco use and family vs individual plan
  • A repeal on lifetime or annual limits
  • A reversal of standard documentation mandates, which make it easier to compare insurance plans
  • A reversal on Medical Loss Ratio standards, which force large insurers spend at least 85% of premiums on claims

Why it matters: These changes would appease the Freedom Caucus, but could see moderates abandon the bill.

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Fox News: GOP expects 'smoking gun' proving Obama admin spied on Trump

Jack Gruber / AP

Republicans in Congress are expecting a "smoking gun" showing the Obama administration intentionally spied on Trump associates, and possibly Trump himself, Fox News reports:

The intelligence is said to leave no doubt the Obama administration, in its closing days, was using the cover of legitimate surveillance on foreign targets to spy on President-elect Trump, sources said.

A source told Fox that the surveillance left a "paper trail" indicating there was "no other plausible purpose... than to damage the incoming Trump administration." No, Trump Tower wasn't bugged, as POTUS claimed, but if the report is accurate his transition team was targeted for surveillance.

What's next: Fox says the House Intelligence Committee expects to receive the evidence this week. Trump said he felt "somewhat" vindicated by Devin Nunes' statements yesterday about "incidental" surveillance of Trump's communications. Expect him to be less restrained if this report proves accurate.




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Marketo apologizes after video promo for its conference panned as sexist

Marketo, which specializes in helping companies promote themselves, apologized Thursday after one of its own promotions fell flat.

The ad, promoting an upcoming Marketo conference, featured a ditzy female newscaster and the company's male CEO, Steve Lucas. Marketo told Axios the ad, which was roundly criticized on Twitter, has been pulled down.

We sincerely apologize for the offense we caused with what was intended to be a light-hearted promotion for Marketing Nation Summit. The video was created to promote the conference, playing off our theme of engagement. Marketo has always had a steadfast commitment to championing diversity and empowering female leaders in technology and beyond.
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Theranos offers shares to investors if they promise not to sue

Theranos

Theranos, the embattled blood-testing company, plans to offer additional shares to existing investors if they agree not to sue the company, according to a report from the Wall Street Journal citing anonymous sources. Theranos reportedly only has $200 million in cash left, but is already facing multiple lawsuits, including from former partner Walgreens and investor Partner Fund Management.

The deal: The shares would come from founder and CEO Elizabeth Holmes' personal stake in the company, which would result in her losing her majority ownership. According to the Journal, early investors aren't included in the deal, and weren't even informed of it.

Murdoch exit: Theranos has reportedly agreed to buy back the stake Rupert Murdoch, the executive chairman of News Corp. and 21st Century Fox, purchased for $125 million in 2015.

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Valeant's ousted CEO made $72.5 million in 2016

Manuel Balce Ceneta / AP

Michael Pearson, former CEO of Valeant Pharmaceuticals, cashed in $72.5 million worth of stock and severance pay in 2016 even as he and the drug company were under federal investigation for accounting fraud and a billing scheme tied to a specialty pharmacy it secretly owned.

Pearson took home $60.5 million in stock and the rest in severance pay and other benefits, Valeant disclosed Thursday to the Securities and Exchange Commission. He also still used Valeant's corporate jet. Joseph Papa replaced Pearson last year, and Papa earned $62.7 million even though Valeant remains mired in trouble.

Valeant's stock has cratered since the middle of 2015, and it has become a pariah in the pharmaceutical industry. Pearson led Valeant since 2008, building the company up on the controversial practice of acquiring drugs and jacking up the prices.