Snapchat is back: Strong fourth quarter takes swipe at Facebook and Instagram

February 09 10:01 2018

Snapachat managed to overtake most of the forecasts from different analysts; the company managed to buoy their revenue to tremendous levels despite all most all reports showing the absolute opposite.

“Anybody can log on to our platform and buy advertisements”.

Revenue increased 72% to US$285.7mln in the quarter ended December 31 as daily active users rose 18% to 187 million, compared to a year ago.

Not only have Snapchat’s advertising API and self-serve Ad Manager made it easier to buy Snapchat’s Snap Ads, but they have also opened up the app’s inventory to more advertisers. That change helped boost the number of ads featured in its app by 4X the amount from the same time previous year, with 90 percent of the ads now coming from programmatic systems, according to the company.

However, the broader availability of Snapchat’s inventory has corresponded with a reduction in the value of each ad.

Snap is now locked in a fight for its life with Facebook, which copied its marquee Stories feature – and the accompanying selfie filters and masks – and inserted them into all of its major products: Facebook, Instagram, WhatsApp and Messenger.

Wall Street was disappointed in the meagre amount of new users that Q3 of 2017 brought, but this has significantly turned around for the final quarter of the year. “But it was only one quarter, one quarter a trend does not make”.

Even though Snap wasn’t vocal about its release, Snapchat’s new Do Not Disturb comes at a time when more people in the tech industry are talking about smartphone addiction. Average Revenue Per User in the developing world almost doubled, from $0.30 to $0.56, with total revenue from the region doubling quarter-over-quarter, from $13 million to $26 million.

In an earnings call, Snap chief executive Evan Spiegel said: “Our business really came together towards the end of a year ago”.

Here are the most important details we culled from management’s post-earnings call. Snap said that more of its ads had multiple bidders, which should drive up pricing over time.

Several institutional investors and hedge funds have recently added to or reduced their stakes in SNAP. In January, Snapchat started allowing users to share photos and videos with other users outside the app, and a subsequent update added hundreds of customization options for the app’s Bitmoji avatars. But that is changing. This represented 4.5 million new DAUs, or growth of about 17% year-over-year, but just 3% sequential growth.

During its third quarter, the company panicked the investor world when it looked like it had been caught flat footed as it shifted from selling ad deals directly to big-budget marketers to using automated software.

The thing that makes Snap so compelling, though, is the idea that it’s still early.

Snap Inc. operates as a camera company.

That’s exactly the Google and Facebook playbook – building a huge ad business by working with thousands of small advertisers.

A personalised news feed and an auto-advance feature that takes viewers from one story directly to the next are also part of the redesign.

Snapchat Snap Inc

Snapchat is back: Strong fourth quarter takes swipe at Facebook and Instagram
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