WPP spent $90m on Snapchat ads in 2016 says Sir Martin Sorrell as he admits it's a 'threatening alternative' to Facebook
WPP clients spent $90m on Snapchat last year according to the network's chief Sir Martin Sorrell — around $60m more than it predicted would be spent on the app at the start of 2016.
WPP spent $90m on Snapchat ads in 2016 says Sir Martin Sorrell as he admits it's a 'threatening alternative' to Facebook / Snapchat
The advertising chief told CNBC that the world's largest network had tripled the $30m it forecast to spend on the platform over the past 12 months, and that based on this figure he anticipated Snap's own revenue to be higher than current market estimates.
Back in September eMarketer predicted that Snapchat, which recently pulled together its products under the parent company Snap Inc, would generate $366.69m in ad revenues for 2016, with that figure poised to be closer to $1bn by the end of 2017. Sorrell noted that if WPP clients had spent $90m then it was likely the figure for this year would be higher.
The WPP boss conceded, however, that spend on Snapchat from the firm's brands is still small compared to the $5bn and $1.7bn they dished out on Google and Facebook respectively in 2016.
He also said he believes Snapchat could poise a risk to Facebook, calling it a "threatening alternative."
"I think that's the big opportunity for them," he told CNBC, "we know Facebook has tried to buy Snapchat a couple of times, we know that it's made product changes as a result of Snapchat's products."
He continued: "I think Facebook is concerned about the potential opposition."
According to eMarketer Snap currently derives 95% of its revenue streams from the US, but by 2018 a quarter of its ad revenue will come from outwith the US. The company has recently been investing in other countries, including the UK where it recently expanded its operations.