This is the latest in Localogy’s Skate To Where the Puck is Going series. Running semi-weekly, it examines the moves and motivations of tech giants as leading indicators for where markets are moving. Check out the entire series here, and its origin here.
It’s earnings season again. Most of the tech giants we often cover in this Skate to Where the Puck is Going series have announced calendar-year Q4 performance in the past week. And there’s lots to unpack. Today, we’ll just zero in on a few notable items that relate to SMB social and multimedia marketing.
In particular, three points stick out.
— Instagram now has a billion global users, and roughly a quarter of Facebook’s ad revenue
— Snapchat has 218 million daily active users
— Google for the first time disclosed YouTube revenues, which stand at $15 billion for FY 2019.
Taking those one at a time, Instagram’s one billion mark was announced for the first time. This validates what we already suspected: Instagram is a channel that scales significantly and should be considered for any marketing strategies. That usually the case for brands but increasingly applies to SMBs.
As we recently examined, the Stories format in particular can be conducive to SMB marketing goals. The format reaches 500 million global users and has enviable levels of user engagement. It’s also one of the lowest-friction paths to TV-like exposure and branding, but with (paid) options for precise targeting.
The case is similar with Snapchat. Though it has less global scale than Instagram with 218 million daily active users, it has deeper levels of engagement. That includes a greater share of its user base that engages Stories. Like Instagram, the visibility options for SMBs range between paid and free.
There are also demographic considerations when considering Snapchat versus Instagram/Facebook. Instagram skews older, while Snapchat has greater engagement with Gen Z. The latter bodes well for reaching the increasingly buying-empowered generation and future-proofing one’s customer base.
Finally, with YouTube, newly disclosed revenue breakouts for the online video powerhouse are welcomed by us in the analyst corps who otherwise extrapolate those figures when doing market-sizing. But less selfishly, this quantifies YouTube’s operational scale for strategic marketing decisions.
In all of the above cases, these are lower-friction distribution channels for TV-like ad exposure for brand marketing. And when we say “brand,” we include the branding needs of SMBs. In fact, the common paradox is that SMBs need to brand themselves more than established companies do.
Put another way, a longstanding SMB marketing challenge is having to educate consumers on their existence. Well-known brands don’t have that educational barrier, and its more about exposure and repetition. Instagram, Snapchat and YouTube increasingly represent tools to establish that brand equity.
Lastly, regarding earnings announcements, honorable mention goes to Apple for turning around year-over-year declines in iPhone sales. But more notable is the rise of wearables. This feeds into our ongoing examination of wearables and their strategic implications. We’ll be back next week to drill down on that.