Sir Martin Sorrell to the rescue!
Snap stock is up after the world’s biggest ad buyer said it will spend even more money on Snapchat
WPP says it plans to double spending on Snap ads this year.
Snap investors received some good news on Friday courtesy of one of the world’s biggest ad buyers.
WPP CEO Martin Sorrell, whose firm manages billions of dollars in advertising budgets, told CNBC that WPP plans to double its spending on Snapchat ads this year.
Sorrell said WPP will spend about $200 million with Snapchat, which is much less than the firm spends with others like Google or Facebook, but still significant for Snap. If $200 million is double what WPP spent last year, that means the agency was responsible for roughly 25 percent of all of Snap’s sales in 2016.
The fact that they are increasing that spend is a good sign for Snap investors. Snap stock is up almost 4 percent on the day.
Snap has had a rough year. After a seemingly successful IPO in early March, the company’s stock is near an all-time low thanks to a less-than-stellar first quarter and increased competition from Facebook and Instagram.
In fact, Sorrell’s comments came less than 48 hours after CNBC published a story claiming ad buyers were rapidly losing interest in Snap. Not all ad buyers, apparently.
So this is a bright spot for Snap, even if only temporarily. Snap reports Q2 earnings next week.
Update: Cheddar’s Jon Steinberg pointed out that Sorrell has talked about this spending jump before on Cheddar. Wall Street must have missed it, forgotten, or just appreciated the reminder on Friday. The stock is now up more than 4.5 percent.
This article originally appeared on Recode.net.
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