Market Overview

Analysts See Facebook, Google Able To Withstand Ad Dollar Competition From Snapchat; Twitter Not So Much

Analysts See Facebook, Google Able To Withstand Ad Dollar Competition From Snapchat; Twitter Not So Much
Related TWTR
Mid-Afternoon Market Update: TTM Tech Climbs On Earnings Beat; Groupon Shares Plummet
11 Funny (And Highly Critical) Tweets About The New Apple MacBook
Apple unveils new MacBook Pro, "TV" app [updated] (Seeking Alpha)
Related FB
It's Beginning To Look A Lot Like A $91 Billion Online Holiday Selling Season
Facebook Live's New Feature Will Look Familiar To Snapchat Users
Please Bring Back QE! (Seeking Alpha)

The rise of Snapchat could be bad news for social media stocks, but some should be more scared than others. According to CLSA analyst James Lee, Twitter Inc (NYSE: TWTR) could be the biggest victim of Snapchat’s success.

CLSA recently conducted an investor conference call with an advertising expert from a leading ad agency. Not only is Snapchat expanding its ad offerings by offering more ads in User Stories, its ads are also priced at a premium to peers.

“The engagement rate, measured by the CTR (click-through rate) of swipe-ups, is above peers at 7.5 percent, which enables the messaging platform to charge a premium compared to peers and is encouraging for the early start,” Lee explained.

Related Link: Twitter's NFL Streaming Debut Draws Positive Social Media Reviews

Snapchat video ads are priced at $20 CPM (cost per thousand), much higher than Facebook Inc (NASDAQ: FB)’s $6 and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)’s $8 for YouTube.

Although the shift in video advertising from TV to online is still in the early stages, Lee believes it will continue to be a secular driver for internet stocks.

Because of Snapchat’s focus on tent-pole advertising (advertising focused on events or product launches), the ad expert believes it is competing most directly with Twitter, which is also tent-pole focused.

CLSA maintains Buy ratings on Facebook, Alphabet and LinkedIn Corp (NYSE: LNKD) and an Underperform rating on Twitter.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for TWTR

Oct 2016Loop CapitalUpgradesSellHold
Oct 2016Evercore ISI GroupUpgradesSellHold
Sep 2016MizuhoDowngradesNeutralUnderperform

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: CLSAAnalyst Color Long Ideas Short Ideas Reiteration Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (GOOG + FB)

View Comments and Join the Discussion!