“It goes without saying that Saudi Arabia is one of the most interesting markets that all eyes are on for the past five years; it’s one of our biggest economies,” Abdullah Alhammadi, Snap’s regional business lead for the Middle East and North Africa (MENA), told Arab News.
The popular social media app has a massive stronghold in the Kingdom, reaching 17 million people, which includes 90 percent of 13-34 year-olds — an important demographic for advertisers.
The app has had a successful year with revenue increasing by 52 percent in the third quarter of 2020 compared to the previous year, while daily active users grew by 18 percent year-on-year around the world. A significant portion of this growth comes from Saudi Arabia, which is one of Snap’s top markets. Users in the Kingdom are massively engaged, with 90 percent of them engaging with Lenses on a daily basis and watching more Discover content than any of the top ten TV channels.
“Saudi users have adapted to the platform in a way that we find quite interesting because it became part of that social fabric of daily life of an individual Saudi,” Alhammadi said. “While that is exciting for us, it also puts an onus on us to make sure that our app continues to deliver on the promise of wanting to connect people and wanting people to have a medium in the digital world that is comfortable, safe, and away from social pressure.”
Despite the growth in revenue, engagement and users, Snap also reported a 6 percent decrease in average revenue per user, potentially due to its inability to monetize new users. Alhammadi suggested that as Snap expands into new markets and proves its “value proposition” to users, the top priority is to focus on relevance to the user before going into monetization. “That is why you might see that when users increase faster, the revenue might not be (increasing) as fast.”
For instance, Spotlight, which was launched globally last month, is yet to be rolled out in the MENA region, as Snapchat wants to make sure that it has the right content moderation policy implemented ahead of the launch. The new feature encourages vertical video content from creators that are required to submit their Snaps before getting featured.
Alhammadi doesn’t necessarily believe that the coronavirus disease-instigated acceleration of social media platforms, in particular Snapchat, is likely to slow down as lockdowns lift and normality resumes, because the “value proposition to the user” should not change. On the contrary, as data suggests, new users who may have joined Snapchat during the pandemic are sticking to it even now.
This growth has had brands jumping onto the digital bandwagon much quicker than they normally would have, despite reductions in overall advertising spends and budgets. “While some brands have toyed with the idea of digital investment and innovation, the pandemic turbocharged that entire movement and so they heavily invested,” Alhammadi said.
“As a result, they started seeing the universe of potential integrations that they can do and the impact that they can achieve by doubling down on digital assets and digital advertising.”
For example, Ounass’ Mother’s Day campaign on Snapchat generated a 5.5 times return on advert investment, resulting in a $500 average basket order.
As things start opening up, it would be “interesting to see how this is going to evolve” and how much of the share of digital revenue is going to go back to offline channels, Alhammadi said. He does believe that digital media has an edge because “digital channels have the ability to deliver more transparency and more accurately correlated relationships between spend and return on investment.” 2021 will be an extremely competitive year for not just brands, but also media channels, as everyone tries to recapture or maintain their share of the market.
But, Alhammadi added, “Digital channels are potentially going to secure a significant part of that share because of their ability to be more targeted, more connected with users, and offer a level of innovation that is different from what traditional channels can provide.”