Facebook Boycott Helped Snap Find Advertisers Amid Pandemic

An executive walked gingerly around questions whether Snap's ad revenue is benefiting from the Facebook ad boycott. It’s "difficult to ascertain exactly what the impact of the Facebook boycott is on revenue,” said Chief Business Officer Jeremi Gorman on a Q2 call Tuesday. Gorman speculated some of Facebook’s lost ad revenue could be "related" to cuts in advertisers’ “overall content marketing budgets, just given the environment” of COVID-19. The Facebook hate-speech “conversation has opened the door for us” to “engage” with potential new advertisers, including with CEOs and chief marketing officers, he said. Facebook didn't comment Wednesday. The global health crisis “accelerated the shift to a more digital economy,” said Gorman. Snap’s advertisers “are exploring more ways to offer services digitally, including at-home fitness apps, online education programs, retail stores and restaurants offering online ordering and delivery services, and mobile-first banking and trading,” he said. The pandemic is encouraging business owners “to adopt digital marketing methods to engage with their customers globally,” said Gorman. Daily active users grew 17% year over year in Q2, with 238 million people using Snapchat “every day on average,” said CEO Evan Spiegel. Ad revenue grew 17% to $454 million, despite “extreme dislocations,” said Spiegel. As hard-hit industries like travel and theatrical entertainment “pull back spend,” he said, "we have transitioned to helping them plan for a future recovery led in part by our audience." Other industries like streaming and e-commerce that have thrived from “some of the COVID-related changes in consumer behavior” have been “leaning in as advertisers on our platform,” he said. “The path to this outcome was not a straight line,” said Chief Financial Officer Derek Andersen. “The operating environment has remained challenging as COVID-19 continues to impact macroeconomic conditions, and the businesses of our advertising clients." Advertisers hardest hit in the pandemic are those that “rely on in-person interaction with their customers” he said. The stock closed down 6.2% Wednesday at $23.20.