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August 26, 2022
August 26, 2022

Evaluating Snapchat’s Return on Investment for CPG Advertisers

MMM Preview Lipstick
MMM Preview Lipstick
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.
Across total CPG, Snapchat drove highest ROI compared to other channels
When evaluating specific advertisers within the Personal Care and Beauty category, the same story holds true — Snapchat provides a higher return on investment than social, online video, or television advertising. In fact, Snapchat showed 1.7x the return on ad sales compared to television advertising and is 2.7x more effective at delivering sales for advertisers. 
Snapchat ROAS exceeds other advertising
Augmented reality isn’t just about metrics — it’s an immersive experience
Impressions are more than simple marketing objectives. They’re also a way to give Snapchatters an innovative, digital dive into what brands have to offer. Sponsored Lenses and Filters allow Snapchatters to “use” personal care and beauty products virtually via Snapchat’s Camera. When evaluating advertisers in the Personal Care and Beauty category, AR Lenses were one of the most effective forms of advertising measured, in part because of the experiential element other forms of advertising don’t offer.
MMM 6x Updated
CPG companies use Snapchat to grow
MMM is a valuable tool in helping advertisers measure the effectiveness of their Snap Ads. The results above show that Snapchat is the platform through which Personal Care and Beauty brands in the US can drive sales and grow their businesses. And because of Snapchat’s immersive nature and engaging ad formats, Snapchatters can discover new products wherever they are — driving them closer to purchase in just a few taps. 

Snapchat can help your business grow.