Snapchat’s shares have been sent sliding this time by a celebrity – Rihanna.
Opposing an offensive ad that was allowed to appear in the social media chat site, Snapchat was taken apart by the singer last week. approximately $800 million had been wiped out of the market value of snapchat after its shares tumbled by 4 per cent following the remarks by the singer. By the end of the week, the shares had recovered somewhat and traded at a 1 per cent deficit.
The offensive ad that is the root cause of this debacle is related to the mobile game “Would You Rather?”. The advertisements gave its users two options to choose from – “Slap Rihanna” or “Punch Chris Brown.” Brown is the person who had pleaded guilty for slapping Rihanna while they were dating inn 2009.
Snap was asked to stop the ad from being run by Rihanna through a statement issued on her Instagram account.
“Now SNAPCHAT I know you already know you ain’t my fav app out there! But I’m just trying to figure out what the point was with this mess!” the singer wrote. “I’d love to call it ignorance but I know you ain’t that dumb. You spent money to animate something that would intentionally bring shame to DV victims and made a joke of it.”
She added: “Shame on you.”
A statement was later issued by Snap to CNN where the company called the ad “disgusting.”
“We are investigating how that happened so that we can make sure it never happens again,” the company said.
Self-service ad platforms is perhaps to be blamed for this because such platform allow companies to purchase and put up ads without the intervention of any humans and the incident is reflective of the potential dangers of such ad platforms. This method is put to use by many social networks. The ads that are submitted to the Snapchat platform are “subject to our review and policy” and doesn’t allow content that depicts “excessive violence”, says the company in its advertisement policy.
It’s a big challenge for Snap, said Daniel Ives, chief strategy officer and head of technology research at GBH Insights, to a media outlet referring ot the latest Snap row.
“Social media platforms continue to have troubles with catching all offensive ads and content as we have seen from the likes of Facebook and Twitter,” Ives told CNN. “Snap dropped the ball on this ad.”
Ives added: “This is a make or break [year] for Snap and although we believe it’s heading in the right strategic direction, the Rihanna backlash and ad is another gut punch for this company to make sure they minimize the speed bumps ahead.”
It was just about a week ago that Kylie Jenner had negatively commented about the redesigning of Snap and Rihanna’s negative public statement follows those comments.
“Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad,” Jenner had tweeted. That tweet had resulted in a 6 per cent fall in the shares of Snap which erased $1.3 billion form the market value of the company.
(Adapted from MoneyCNN.com)