Snap Sales SVP Peter Naylor On Upstart Competition, Why Snap Avoids Exchanges And The Wide Release Of First Commercial

Snap’s First Commercial, a reach product that advertisers can use to position their message so that it’s the first ad Snapchat users see when they open the app, is now generally available, Snap said on Tuesday during Advertising Week.

The ad is up to six seconds long and unskippable. First Commercial launched in the United States in April but was only made available to select advertisers at the time.

Peter Naylor, Snap’s SVP of sales in the Americas, spoke with AdExchanger about First Commercial, how Snapchat is differentiating as more competitors vie for TV budgets and why Snapchat inventory won’t be coming to an exchange near you.

Here are the highlights.

First Commercial is a product for broad reach

One of the main selling points of the First Commercial product is that it’s able to queue up the entire Snapchat audience at the start of a session. Snap researched how performance differs between being the first commercial someone sees vs. the fifth or sixth.

“That first impression packs a wallop,” Naylor said. “All brand metrics go up: message association, purchase intent, recall.”

But Snap still wants to serve the full marketing funnel 

Snap is touting its unskippable commercial and First Commercial ads as a means to gain reach.

But Snap also has performance-based ad models, with offerings such as Dynamic Product Ads, which allows retailers to upload their product catalog and dynamically position different types of creative for each product. It’s the sort of product that appeals to DTC.

“There are so many brands in the DTC space that have been with us all year,” Naylor said.

The quest for DTC dollars is getting progressively hotter. On Monday, for instance, Group Nine Media released a product designed to attract that ever-growing pool of advertisers.

There’s still some division between digital video and TV buyers 

For all the talk about bringing digital video and TV together into a single department, that consolidation isn’t universal.

“It’s funny because for a long time, we talked to chief investment officers who proclaim, ‘We don’t have TV or digital buyers, we have video buyers,’” Naylor said. “That sounds good, but when you go shop by shop, you still find subject matter experts steeped in traditional GRPs or steeped in IP-based video assets. The truth is, it really depends shop by shop or client by client, who’s making these purchases.”

But regardless of the format, all buyers want to know about reach and the makeup of Snap’s impressions, Naylor added. Most buyers buy Snap inventory based on impression.

Snap can enable Nielsen measurement, Naylor said, but usually advertisers opt for served impressions.

Back when Naylor was at Hulu, he was trying to sell multiple viewers per stream. But Snapchat is a one-to-one medium, and he longer has to worry about impressions served to a potentially empty living room.

Snap faces more competition, but it’s focusing on its stickiness and diverse offerings to differentiate

 A few years ago, Snap was considered the baby of the social media family, but now it’s entering its adolescence as upstarts such as TikTok and Quibi (although maybe not for long) try to cut into TV budgets. Meanwhile, YouTube is continuing its long mission to grab those dollars.

And Snap faces growing pressure with the arrival of new AVOD services, including Peacock from its content partner NBCU and HBO Max’s ad-supported offering slated to launch in 2021.

But Naylor said those new entrants haven’t changed Snap’s go-to-market strategy.

“We’re continuing with the momentum campaign,” he said.

That means emphasizing the size and scale of the Snap audience. Snap has 238 million daily users, mostly Gen Z and millennial, who return to the platform an average of 30 times per day – in large part because of Snap’s range of functions, from talking to friends and sending video messages to consuming content.

“We can be multipurpose for the marketers,” Naylor said.

But don’t expect to see Snap inventory in an exchange

Snap doesn’t have any inventory on exchanges and it won’t anytime soon, said Naylor, because there’s simply no reason to. “We’ve got demand, and our product is unique,” he said.

Instead, Snap is focused on teaching more people how to use its advertising tools and on building advocacy. It has an education platform called Snap Focus, Naylor said, where people can become certified after learning about Snap’s audience, ad models, how to navigate the ad manager and how to work with augmented reality.

“We’ll go longer on helping outsiders become insiders before we open ourselves to a third-party exchange,” Naylor said.

The upfronts has its place, but auction-based buying saves a lot of headaches

Snap lets advertisers buy based on the show, although most advertisers buy its audiences through Snapchat’s buying platform, which Naylor said can accommodate a number of different marketing objectives.

One thing that’s nice about an auction-based buy as opposed to going through the upfronts is that the market dictates pricing.

“So when people ask how they know they’re getting a good rate, they’re getting the market rate,” Naylor said. “With the upfronts, they always wonder who’s getting a better deal than they are.”

But upfronts can also be useful. Naylor thinks of them as preferred partnerships, and that’s how Snapchat got its roster of early testers for First Commercial.

And the upfront can also ensure advertisers get access to services, including creative or research.

“Upfronts, preferred partnerships, whatever you want to call them, will continue to exist, not only in traditional media but here as well,” Naylor said. “And when it comes to the actual television upfronts, there will always be some gamesmanship because demand outstrips supply. That will continue on even though the supply [ratings] just keeps going down by double-digit percentages every single year.”

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