Snap On Earnings And WeChat Irony In This Week’s Friday Download
May 12, 2017
By FTI Consulting
You’ll remember (or maybe not if you missed that week’s Friday Download) that just over a month ago, teenager Carter Wilkerson asked Wendy’s how many retweets he’d need to get a year’s supply of free chicken nuggets. The company’s response: “18 million”. Well, Wilkerson hasn’t hit the target but his post has been retweeted a record-breaking 3.42 million times, and Wendy’s are coughing up the nuggets. Hurrah! They’re also donating $100,000 to the Dave Thomas Foundation for Adoption in Wilkerson’s name – a thank you of sorts for the kind of publicity that money can’t buy.
After a much-hyped IPO earlier this spring, Snapchat parent company Snap reported its first quarterly earnings on Wednesday, and it’s fair – if not an understatement – to say it didn’t go well. News that the business lost $2.2 billion in the quarter, on revenues of just $150 million, sent Snap’s share price plummeting more than 24% in after-hours trading, and all in all, the company lost more than $6 billion in market value in less than an hour.
Leading up to its IPO, Snap made a huge point that it should be measured by user engagement and more importantly, how much money Snapchat could make from every user. Whilst the growth rate of the user-base was smaller than it has been in every preceding quarter, the company generated $0.90 per user in Q1 of 2017. That’s up significantly from a year ago, when each user only brought in $0.32. So, it’s not all doom and gloom, and with Snapchat introducing a self-serve ad platform, we expect those numbers to increase.
Last week, Russia blocked access to Chinese social media app WeChat for not providing contact details to the Russian communications watchdog – or at least that’s what the social media platform claimed, anyway. The true cause of the block likely lies in the Russian law requiring all foreign internet companies to store Russian user data on servers located inside Russia. Something several tech companies, including LinkedIn and Blackberry Messenger, have been penalised for not complying with.
Some might say the WeChat block rings of irony, since China itself is known for imposing tough regulations on foreign internet companies, and enforcing them with ever more vigour. Facebook, Google, YouTube, and Twitter, which operate in Russia largely without issue, remain blocked in China primarily due to qualms about freedom of information. It seems WeChat didn’t have a leg to stand on in a debate with Russia on the topic, so they complied with the regulations and the platform has been unblocked.
Also This Week
Twitter and NFL sign multi-year deal for live show [Reuters]
Social Media Skirts Censors in Iran as Election Race Heats Up [Bloomberg]
British and Irish Lions players will run social media committee to decide on publishing dos and don’ts [Telegraph]
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting LLP, its management, its subsidiaries, its affiliates, or its other professionals, members or employees.
FTI’s digital practice in EMEA operates as a centre of excellence for digital communications within the firm and is staffed by a team of practitioners with industry experience of consumer, corporate and financial communications. The team runs an active portfolio of multi-sector brands and partners with FTI’s teams and clients to provide a wide range of online reputation management services.