• by Jeri Smith , Columnist, January 24, 2017

When Sir Martin Sorrell disclosed that WPP clients spent $90 million on Snapchat advertising in 2016, business pundits could be forgiven for wondering if the industry has gone mad. Surely brands and agencies aren't so desperate to court Millennials that they're simply throwing money at the next shiny thing … right?

Wrong. 

I'm not just picking on Snapchat here. The online advertising environment, in general, is over-hyped, misused, and produces a net drain in advertising ROI for many brands. New platforms, in particular, can inspire a specific kind of FOMO (fear of missing out) in marketers, resulting in hundreds of millions of dollars being wasted. 

"Wait," you might say. "I saw a case study at SXSW about a brand that did something cool on Snapchat and everyone thought the CMO was a hero. That can't be based on nothing!" 

In a time of unprecedented CMO turnover, don't be so sure. 

Digital advertising can work, of course. But how many brands can triumph in a jam-packed environment where every consumer is getting blasted face-first with a firehose of branded content for most of their waking hours? 

When it comes to Snapchat, you’re not likely to ever know whether your advertising worked: The platform has famously offered extremely limited data on its users, and won't guarantee a minimum number of ad views for those misguided enough to purchase on those terms. 

I will say something for digital advertising: One of its best qualities is how it can lead a consumer down the latter stages of the path to purchase. Unfortunately, for CPG brands like the ones filling Snapchat's coffers, their products have a much shorter, less considered purchase process. Even worse, that path is less likely to be traveled online. 

I would love to see how CMOs from the CPG brands making up 19% of Snapchat's revenue managed to justify that disconnect. Ditto the beverage brands that comprise a further 16% of the platform's ad buys. And that's without holding to account the first movers who bought Snapchat ads at a 93% mark-up when they debuted, eager to be seen as ahead of the curve.

For that, the culprits are almost certainly agency partners wielding influence on their clients rather than the brands themselves. Many ad agencies will do extremely costly things to be seen as “innovative” — and it's brands who carry that cost. They can call it “test and learn” marketing all they want, but if there are no meaningful metrics, what are you testing and what are you learning? 

One thing you can definitely measure is the amount of money spent developing content for platforms that reach relatively few people. (You can try to measure the time spent on this, but the estimate would likely be off.) With Snapchat specifically, brands are creating vertical video and ad content that can't be repurposed elsewhere, making it an even bigger extravagance. 

The irrational amount of spend on Snapchat is just one more signal that many brands have doomed their marketing by letting agency egos and delusions of "disruption" lead them astray. Investing in brand-building creative, executed in venues that are known to deliver returns, doesn't get you a speaking slot at SXSW and might not attract corporate headhunters when your current CEO fires you. That said, it works, especially for sustained brand health. It might not be sexy, but it's the right thing to do.