Snapchat provides significantly worse ROI than its competitors, according to a survey of 1,600 marketers carried out by RBC Capital Markets.
Snapchat was rated behind Google, Facebook, Twitter, LinkedIn, YouTube and Yahoo, scoring 3.43 on an eight-point scale, beating just one company – AOL, with a score of 2.88. By comparison, the most highly-rated companies, Google and Facebook, were rated 6.98 and 6.72 respectively.
The report pointed to a variety of reasons that marketers had seen a drop in ROI with Snapchat, including difficulty measuring key performance indicators, poor targeting, a decrease in both user engagement and open rates and increased competition from Instagram, as it launches a variety of Snapchat-style features.
It adds to the post-IPO backlash that Snapchat is currently experiencing, with Snap's share price having fallen 17.7 per cent from 2 March, the day of its opening, which closed trading at $24.48.
That drop should come as no surprise, according to an anaylst note from investment bank Cantor Fitzgerald. The three analysts behind the note claim that Snap's valuations "looks stretched to us both based on the future cash flows of the business and when compared to peers like Facebook and Google at IPO".
According to the note, the numbers involved in the company's valuation "do not add up". The analysts calculate that Snap is trading at 28.6x its enterprise value, compared to a 5.5x average for its peers and 9.6x for Facebook specifically.