Marketing executives and consultants have been brushing off Snapchat as a fad, without a long-term, sustainable business. However, it’s worth taking notice that Martin Sorrell, the Chief Executive Officer of WPP, the largest advertising firm in the world, thinks Snapchat is a threat to Facebook.
On Tuesday, Sorrell told CNBC that the advertising firm spent over $90 million on advertising in 2016– or $60 million more than what WPP predicted they would spend on the messaging app at the beginning of 2016. This staggering sum means that Snapchat’s 2016 revenues are probably much higher than what investors currently predicted it to be. Investors and analyst predicted Snapchat would earn $350 in 2016, but, considering WPP alone spent $90 million, it’s likely that the Los Angeles tech company earned more than that.
Sorrell told CNBC, “It does become a threatening alternative to Facebook and I think that’s the big opportunity for them. We know Facebook have tried to buy Snapchat a couple of times, we know that they’ve made product changes as a result of Snapchat’s products,”
Sorrell also explained to CNBC that he thought that, with the recent controversy and focus on “fake news,” Snapchat may have a clear advantage. He explained, “I think with the measurement issues, with the fake news issues, and the fraud issues that the internet faces, clients want to try and experiment.”
Do you think Snapchat is a threat to Facebook?