Social media platforms Snap (SNAP) and Reddit (RDDT) are attempting to lure TikTok’s advertisers by offering discounts on their ad spends. The Information was the first to report the news, stating that the two companies are trying to leverage the uncertainty surrounding TikTok’s ban or sale in the U.S. Although Snap and Reddit’s sales agents have not explicitly admitted that they are targetting TikTok’s customers, they have mentioned that they can help advertisers reach the same audience that the Chinese social media app caters to.
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Social Media Platforms Eye TikTok’s Customer Base
TikTok’s competitors are taking prompt actions to capitalize on its dire situation. Snap is reportedly giving a 20% return in free ad expenditure to media companies that spend over $100,000 on ads on its platform. Meanwhile, Reddit is offering a 10% return in the form of ad credits to brands who spend between $150,000 to $1 million on the platform. Additionally, advertisers spending more than $1 million will get 15% in ad credits. The credits on Reddit are capped to a maximum of $500,000, and these credits must be exhausted before the end of January.
Reports also suggest that Pinterest (PINS) has also been telling advertisers that nearly half of TikTok’s users/audiences are common to its platform. By informing advertisers of this demographic overlap, Pinterest could be indirectly wooing brands to advertise on its platform. TikTok’s future hangs in the balance for now until President Donald Trump effectively works out a joint venture for the Chinese social media giant.
Is SNAP a Good Stock to Buy?
Ahead of Snap’s Q4 FY24 earnings due in February, analysts prefer to remain on the sidelines. Snap’s performance has been under pressure owing to slow user and ad spend growth amid the heated competition, keeping analysts at bay.
On TipRanks, SNAP stock has a Hold consensus rating based on seven Buys, 19 Holds, and one Sell rating. The average Snap price target of $13.67 implies 30.7% upside potential from current levels. In the past year, SNAP shares have lost 35.9%.
Is RDDT a Good Stock to Buy?
Reddit is also set to release its Q4 FY24 results in mid-February. Analysts remain divided on its stock trajectory. RDDT stock has a Moderate Buy consensus rating on TipRanks. This is based on 11 Buys, four Holds, and one Sell rating. The average Reddit Class A price target of $172.75 implies nearly 6% downside potential from current levels. Interestingly, RDDT shares have already gained over 299% in the past year.
