Snapchat has reported consumer growth and quarterly revenue for the first time since going public.
The news that the estimates of Wall Street had been beaten by the social networking firm sent its inventory by more than 20 percent on Tuesday. This was the nearest Snap, that the parent company, has come to topping its IPO price of $17 because July 2017.
The centrepiece of this results was a 72% jump in sales to $ 286 million last year from this time. This was heralded as a vindication of the decision to transition into an automated advertising sales market in Google and Facebook’s design.
There was also a growth in the amount of users, with 8.9 million each day busy users visiting the site in the previous few weeks of 2017. Snap reported that consumers were remaining on its app’s Android version.
Analytics company FactSet puts the total amount of daily users that are active at 187 million at the end of December 2017.
Industry insight
Aaron Goldman, CMO, 4C Insights:
“Snap benefited from some of the seasonality that is expected during the vacations as advertisers heavy upward but also saw some fresh brands come in and test the platform for a place to participate hard-to-reach audiences. In November, Snapchat introduced a redesign that split out curated/professional content and peer-to-peer interaction.
“In fact, ad spend through 4C increased 29% in Q4 to shut out the first year of self-serve Snap Advertisements. This shows current users are delighted to spend time viewing videos with advertisements interspersed throughout and leaning back. More original content for Discover will just make the platform even more precious as a match to linear television.
“It is time for brands to embrace each of the “social” platforms as marketing vehicles that are unique.”
Yuval Ben-Itzhak, CEO of Socialbakers:
“Despite expansion anticipation from analysts along with a forecasted set of about $254.8 million in the fourth quarter earnings, Snapchat remains a long way behind its rivals for marketing dollars, Facebook and Instagram in terms of audience size. Reach currently offered by Snapchat’s lack, especially remains a limiting factor for entrepreneurs seeking to leverage the full capacity of the platform.
“Despite the improvements made on the platform towards the end of 2017, Snapchat’s advertisement product offerings will need to improve to measure up to its competitors. They need to provide viewability metrics if be successful moving forward and they want to grow their advertisement revenue.
“Presently, acquiring a programmatic access (APIs) into the Beta stage requires special permission from this stage. This means that both marketers and advertisers have no programmatic accessibility to find out about the crowd and understand what content to create and how to target.Snapchat will confront another massive expansion barrier in 2018 if they continue to only open its own API to a selected number of brands.”
