Despite Slowing Growth and Revenue, Snapchat Promises to Improve Ad Effectiveness
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Despite Slowing Growth and Revenue, Snapchat Promises to Improve Ad Effectiveness

Despite Slowing Growth and Revenue, Snapchat Promises to Improve Ad Effectiveness

With all the enthusiasm surrounding Snapchat, some are wondering if the social media platform is losing its spark. A pulse from the market shows that it is not that rosy for Snapchat as the company strives to retain its brand image by improving the overall effectiveness of ads on its platform.

During a recent disclosure of its financials, the company indicated that the parent company, Snap, Inc., has suffered another major loss in the second quarter, which was probably four times the loss of the previous quarter. Even though revenue performance was exceptional and rose by 153% to $182 million, investors and stakeholders were not happy as the company had a loss of $443 million.

The growth in terms of user base also saw a slight decline with the company only adding 7.3 million new users in the second quarter against the targeted 8 million. As of now, Snapchat has a user base of 173 million active users—people who use the app on a daily basis. Even though the figures were not encouraging for investors, Imran Khan, the chief strategy officer, is upbeat about the company’s journey toward monetizing the platform. He indicated that the company has made “great progress.”

Khan said the user base in the U.S. and Canada is 69 million, and by far these are the two most “monetizable” markets which they are targeting through enhancements in advertisement. The advertisement revenue of Snapchat increased by 149% on a year-over-year basis with a quarterly increase of 25%. Khan further commented that the USA and Canada make up more than half of the amount spent on advertising globally.

Snapchat remains positive about the road ahead and the company has devised new steps as part of their strategy. First, they will focus on improving offerings of ad space. Subsequently, they will create a more conducive platform and more efficient tools for advertisers. Snapchat plans to accomplish this by improving its programming capabilities with the launch of its self-service ad feature to help brands buy ads automatically. Currently, 60% of the advertisements are delivered in auto mode through programming techniques. Khan said that automation is the key and increasing it on their core platform helps generate better ROI.

The company also wants to provide advertisers and marketers the tools to help them analyze the spend on ads and measure the effectiveness. This is evident from their latest acquisition of location based analytics firm Placed. Speaking on this, Khan said that they are equally keen to work with third party companies and help advertisers by maintaining complete clarity and transparency in the process.

Anirudh Menon
Anirudh Menon
I have adorned multiple hats during my professional journey. My experience of 14 years comes in areas like Sales, Customer Service and Marketing. My journey as a professional writer started 5 years back, when I started writing for an in-house magazine for my employer. Having successfully delivered many in-house projects, it encouraged me to take my skill to the world. As on day, I have written articles, blogs website content for various industries like Information Technology, Start-up, Retail and Government. The subjects that I have covered range from Digital Marketing, SAP Cloud Platform, Cloud Computing, Content Marketing , Politics. Enhancement is a process and I constantly thrive to add more subjects in my portfolio. Over and above content writing, I also train language and communication to students who want to brush up their speaking skills. I am a part time trainer for IELTS coaching and also work as a budding voice over artist.

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