December 16, 2021
December 16, 2021

Evaluating Snapchat’s Return on Investment for CPG Advertisers

There are a lot of products and services out there driven heavily by e-commerce and online purchases. Consumer Packaged Goods (CPG), however, are bought both in stores and on a brand’s website. Because of this, digital analytics alone can fall short when assessing marketing performance. To gain a better understanding of overall performance, advertisers are leveraging market mix modeling (MMM),  a standard, industry-wide practice. MMM is a measurement strategy that applies statistical analysis to certain data such as sales, ad expenditure, or promotions, to help marketers estimate the impact of specific strategies and determine a campaign's effectiveness.
To show exactly how significant Snapchat’s role is in growing sales for CPG advertisers, Snap commissioned two analyses from Nielsen — an industry leader in global analytics and MMM services for businesses — to quantify the sales Snapchat Ads have driven for advertisers in both the CPG and Beauty categories in the US. 
First, we analyzed return on investment (ROI) benchmarks using Nielsen Compass’s MMM Normative Benchmarking database for rolling 104-week benchmarks in Q4 2020 as well as the previous two quarters of back data. Then, we selected a representative set of five US advertisers within the Personal Care and Beauty vertical, and Nielsen constructed an aggregated dataset of each advertiser’s sales, Snapchat ad spend, ad spend on television, and spend on other digital channels using their Ad Intel dataset, pricing information, and other variables. This dataset — constructed at a weekly level — examined information from January 2018 to April 2021. Nielsen measured what drove sales and compared information between businesses.
Snapchat delivers twice the ROI
Snapchat’s impact on driving sales for our advertising partners is clearly significant. Looking at Nielsen Compass’s benchmarking database, Snap Ads earned double the return on investment compared to total media, social, and digital benchmarks.