The Kardashian-Jenner clan have developed a habit of ‘breaking the internet’. In the latest instance of this, Kylie Jenner has managed to deal a monumental blow to Snapchat with just a single tweet. It wasn’t even a 280-character tweet. It was only 18 words (I mean, maybe 17, “ugh” is barely a word). But those mere 18 words managed to wipe $1.3bn (£1bn) off Snap’s market value.
Jenner’s tweet to her 24.5m followers reads: “sooo does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad.” These few seemingly harmless words, regarding the app’s massively criticised redesign, hurt Snap badly and goes to show the influence that celebrities can have over pretty much anything.
“$1.3bn wiped off Snap’s value following a seemingly innocuous tweet from Kylie Jenner highlights the sheer power an influencer can have,” said Josh Krichefski, CEO at MediaCom UK. “With over 24m followers, and an army of loyal fans hanging on her every word, this represents both a challenge and opportunity for brands and businesses in today’s reality TV and social media age.”
Despite the big hit to Snap’s stock on the back of the tweet, the tech company shouldn’t be too concerned about the thoughts of celebrities and needs to pay more attention to the average Joes and ordinary Janes that do far more for its image messaging app.
“What strikes me as interesting is that TV is used to paying for content but both Instagram and Snapchat get it for free,” said Solberg Audunsson, co-founder and chief services officer at Takumi. “If this wipes billions off the market cap for Snapchat, why wouldn't they consider holding on to their most important talent by offering compensation? It would be a radical shift and possibly undermine other parts of the platform dynamics but it's an interesting thought exercise.
“Neither Instagram nor Snapchat relies exclusively on influencers and celebrities to drive their engagement. In fact, they know that true retention comes from hyper relatable interactions at the local level. The pockets of deep interest and locality.
“I wouldn't be too worried about celebrities leaving. But I'd probably consider moving Kylie into the Discover section.”
The problem here is that, with the tweet, Jenner has seemingly become the mouthpiece for the masses in showing her disdain for the redesigned app. More than 1.2m people have signed a petition to get the old Snapchat back, but company CEO Evan Spiegel is standing firm on the changes and refusing to go back – committed and wise or stubborn and stupid? You be the judge. Well, not so much you, more the company’s stock – and we’ve seen how that’s going.
“While Snap’s app redesign announcement last year was definitely a step in the right direction, offering marketers increased personalisation and relevance, the changes to the platform have backfired spectacularly,” said Yuval Ben-Itzhak, CEO at Socialbakers. “Snapchat needed to make sure they maintained the quality and relevance of their content, especially as they try to size up to competitors such as Instagram. Unfortunately, over a million people, and counting, disagree with the changes to the app, based on the popular online petition. A drop in quality takes users’ attention elsewhere and Snapchat is currently facing that challenge.”
Though Snap’s app redesign hasn’t been too well-received, it’s recent decisions to both open up its Marketing API and introduce insights for creators have been far better received by those on the other side of the app’s spectrum.
The opening of the Marketing API means that all agencies, brands, and tech partners now have access to the Snapchat platform. Meanwhile, insights give creators a better understanding of their audience and opens up future monetisation opportunities for them.
“What’s quite ironic is that Snapchat has been the last network to get its influencer strategy off the ground. They’ve never had a strategy on their relationship with influencers to sort it out,” said James Erskine, director at The Big Shot and Social Circle.
“For a celebrity to comment like this, and for it to have such an incredible impact, is them being affected by the sort of people they’re not really in-tune with. They’re also the last to open up their API. So, they’re taking steps towards being more useful to brands, advertisers, and creators.
“I think the key thing is understanding which influencers and which content creators you want to work with and then it’s about harnessing that power. If you’re in a long-term relationship with the right creator, then you’re going to be able to work with them on modelling the message. So, there’s an opposite argument for pro influencer marketing [when it comes to the Jenner tweet].”
It’s important to note that Jenner’s tweet may not be the sole reason for the huge hit that Snap took (she did follow up her initial tweet saying “still love you tho snap ... my first love”).
As mentioned, the app’s redesign is unpopular with far more people than just Miss Jenner. On top of this, Snap has generally struggled over last year or so since its IPO. Then there’s the news that CEO Spiegel was likely the best paid CEO in 2017, picking up a cool $638m despite his company losing $720m in the same year. This, along with Jenner’s tweet and the general ill-feeling toward Snapchat, is likely to have culminated in the huge hit – rather than just one of those factors (but it’s a lot cooler to think that one person could wipe over $1bn out of a company that they’re not part of with a tweet).
I nearly forgot to mention that, on top of all that (I know), brands are strongly considering no longer using the app to reach their customers. This was highlighted when Maybelline asked its fans – through a Twitter poll nonetheless – if it should remain on Snapchat, after seeing its view drop "dramatically" on the platform. You know, just Twitter tearing down Snap without having to lift a finger.
“Some reports argue that the fall in company stock was already in play with the unpopular redesign at the end of last year, the news of the founder’s eye-watering paycheck and the platform never quite convincing the market since going public of its profitability. So, the timing of Kylie’s tweet brought the headlines together in a perfect storm,” said Lisa Targett, UK general manager at Tribe.
“It reinforces the power of celebrity when pushing for editorial hype - which could deter brands from working with top-tier influencers to get their message out, should one tweet go the wrong way.
“It's likely that Snapchat will snap back as I doubt the tweet was the catalyst for stock price plummet - however, what the headlines have done for Snapchat is an entirely different story.”
All-in-all, the Jenner-Snapchat tweet incident of February 2018 (they’ll learn about it in schools one day) shows just how much power a celebrity can have in damaging the reputation of a company.
At the same time, positives can be taken from this for brands implementing influencer marketing strategies. If a single tweet can damage a company this much, it can also do just as much to greatly boost its image and stock performance.
“Influencers have self-built a trusted relationship with those that follow them and as demonstrated in the case of Kylie Jenner, often have the power to make or break a brand,” said Amelia Neate, senior manager at Influencer Champions. “One positive mention from an influencer can see a brand reach new heights and new audiences instantly, and likewise expressing dislike in a brand, can in some cases see a brand take a hit.
“Snapchat is an extremely high-profile brand and while this has had an impact, should they decide to update the platform again, they may re-attract Kylie and other influencers once again boosting their audiences.”