Snapchat Shares New Insights into the Effectiveness of Snap Ads for CPG Brands

Snapchat has published a new research report which uses marketing mix modeling to provide more perspective as to how Snap ads contribute to sales for consumer packaged goods (CPG), and the effectiveness of the platform for CPG brands.

A key challenge in CPG marketing is that as CPG items are purchased both online and in-store, that makes direct attribution from digital campaigns more complex. Marketing mix modeling, which uses point-of-sale information alongside internal and online data points, provides a more accurate view of overall ad impact, which won’t always be as clear from online data alone.

Snap commissioned Nielsen to conduct a series of studies on this, providing a broader view as to how Snapchat Ads helped drive results for advertisers in both the CPG and Beauty categories in the US. 

As explained by Snap:

“First, we analyzed return on investment (ROI) benchmarks using Nielsen Compass’s MMM Normative Benchmarking database for rolling 104-week benchmarks in Q4 2020 as well as the previous two quarters of back data. Then, we selected a representative set of five US advertisers within the Personal Care and Beauty vertical, and Nielsen constructed an aggregated dataset of each advertiser’s sales, Snapchat ad spend, ad spend on television, and spend on other digital channels using their Ad Intel dataset, pricing information, and other variables.”

So it’s not a massive, comparative data set, given it’s been narrowed down to five advertisers. But still, the results do indicate that Snap ads can be very effective for CPG brands in maximizing reach and resonance for their products.

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First off, based on Nielsen’s benchmarking database, the results show that Snap Ads generated double the return on investment compared to overall media, social, and digital benchmarks.

Snapchat Nielsen report

Snap ads also provided better ROI than social, online video, or television advertising.

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“In fact, Snapchat showed 1.7x the return on ad sales compared to television advertising and is 2.7x more effective at delivering sales for advertisers.”

Snapchat Nielsen report

Finally, the analysis also looked at AR campaigns, and how Snap’s Lens tools can enhance results for CPG marketers by enabling people to interact and engage with product promotions, as opposed to static campaigns.

When evaluating advertisers in the Personal Care and Beauty category, AR Lenses were one of the most effective forms of advertising measured, in part because of the experiential element other forms of advertising don’t offer.

Snapchat Nielsen report

There are some additional qualifiers here, including the audience that you’re trying to reach, and the products themselves being marketed. If you want to connect with older consumers, then none of this is likely relevant, because they won’t be using Snapchat – but if your target market is in the app’s key usage bracket, then the data here does suggest that Snap can be a powerful accompaniment to your CPG campaigns.

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A lot comes down to the creative itself – and of course, not all brands will be able to put together AR campaigns for their promotions. But the data here does suggest that it could well be worth the additional investment.

And as AR continues to become mainstream, that could become even more relevant for more brands in future.

You can check out Snap’s full CPG advertising analysis report here.

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