WPP CEO Sir Martin Sorrell said the network is planning to double its investment in Snapchat this year. The world’s largest advertising group spent about US$100 million on Snapchat last year, and Sorrell said this amount could rise up to US$200 million this year. That said, he added that this US$200 million is actually considered a “very low level” ad spending.
“It’s US$200 million versus US$6 billion (on Google) or US$2 billion for Facebook. So, you’re talking about a flea on the elephant’s backside,” Sorrell said in interview with CNBC’s Squawk Box on Friday.The network forked out about US$1.7 billion on Facebook last year and it will be “well over” US$2 billion this year, Sorrell said. However, the advertising mogul also added he likes Snapchat over Facebook and that the photo-and-video-sharing app is potentially “more competitive as the third force.”
In fact, Sorrell already hinted in January this year that Snapchat could become a threat to Facebook in the ad industry. This came after he revealed that its clients spent US$90million on Snapchat last year in advertising on the Snapchat platform, which was three times of what was initially forecasted by the network. This placed Snapchat in a stronger-than-expected position in capturing the marketing and advertising pie.
This latest news drove Snapchat shares closing higher on Friday (4 August), up about 4.6% as it prepares for this second quarter results this week. Snap, which has been struggling on its stock front has had a tough year amid rising competition from Instagram and Facebook. According to FactSet, its stock is down about 42.8% over the past three months.