Snapchat in “only for rich people” PR fail

Snapchat felt the wrath of India in April 2017 after its founder and CEO Evan Spiegel was faced with allegations he said the app was “only for rich people” and that he didn’t “want to expand into poor countries like India and Spain”.

At a meeting to discuss Snapchat’s user growth in 2015, Anthony Pompliano – who served as the business’ growth lead – says he expressed concern that the app was not taking off overseas.

Before going on to present his strategy to address the issues, he maintains that Evan Spiegel abruptly cut him off before making the comments.

The accusations are contained in a lawsuit filed by Pompliano. It details his brief, three-week tenure at the company, during which he makes further allegations that the company exaggerated its user data and that the top executives were “completely misinformed” about key metrics.

Key statistics he says were misreported included:

  • Daily Active Users (DAUs) were less than the 100m they reported
  • User base increases were only 1-4% per quarter — far less than the double-digit month-on-month growth the company was claiming
  • Completed new user registration rate was 40%, not 87%
  • They retained 40% of its users after seven days, when in fact the figure was closer to 20%

But it was the comments about India and Spain that really made this a PR fail to remember. Twitter and other social media sites were flooded with posts – many from these countries – voicing their anger at the comments.

Snapchat PR fail tweet | PR Fail | Bad Marketing

And it didn’t stop there. Snapchat’s app rating on the Google Play Store and Apple App Store also tumbled, as a flood of 1-star reviews came in.

Snapchat PR fail review | PR Fail | Bad Marketing

It is often said that “there’s no such thing as bad publicity”. It got the brand spoken about. The brand was mentioned in the news. It probably had a positive effect overall… right?

Well, no. Snapchat’s (SNAP) share price took a tumble as well, dipping well below $20.

Snapchat Stock | PR Fail | Bad Marketing

 

How did Snapchat respond? With a mix of incredulity and dismissiveness, putting it down to a bitter ex-employee.

“This is ridiculous. Obviously, Snapchat is for everyone! It’s available worldwide to download for free. Those words were written by a disgruntled former employee. We are grateful for our Snapchat community in India and around the world.”

Whether or not Mr Spiegel made the comments or not – this story shows the destructive power of bad press. Negative mentions on social media, the app rating tumbling and the share price even more so. Particularly for those in senior roles, what you say and how you conduct yourself is incredibly important. Avoid saying anything that you wouldn’t say in public, and you might just avoid this type of PR disaster!

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Chris Rogers

I curate stories of #badmarketing so marketing professionals and business owners like you can learn from the mistakes of others - and produce better marketing that’s right first time. Bad Marketing also aims to be essential reading for marketers, academics & students – and anyone interested in the challenges of marketing.