Snapchat global ad revenue target slashed by $161 million

The advertising revenue of photo-sharing app Snapchat is expected to take a hit less than a year after its headline-making IPO.

According to eMarketer, the Snap Inc-owned platform is expected to see its ad revenues slow from a predicted US$935.5 million from last year to just US$774.1m – a reduction of US$161m.

The majority of its revenue, totalling US$642.5m, is expected to come from the United States, a number that is again down from its predicted $770m forecast in March.

Nevertheless, the market research company said it expected “strong growth” over the next two years, with US ad revenues reaching $2 billion by 2019. The youth-orientated platform is also expected to surpass Twitter in US ad revenues next year, with Snapchat raking in US$1.18bn in revenues, against Twitter’s US$1.16 billion.

Meanwhile, Facebook-owned Instagram, which launched its own Snapchat-style ‘Moments’ feature earlier this year, is predicted to outpace both of them, raking in $3 billion in US ad revenues this year and $6.84 billion in 2019.

At the time of its IPO, Snapchat claimed to be worth US$25bn, despite a lack of clarity over its number of active users.

Three months later, the platform began rolling out advertising to brands in Asia, a move Carat’s Jonathan Rudd called “a little too late”. 

Writing on Mumbrella Asia at the time, Rudd said: “My main concern for Snapchat here is that when Instagram Stories launched in the US, Snap was already the go-to platform for live ephemeral moments and had scale with millennials; that wasn’t the case in Asia. Hard facts are scarce but despite Snapchat now figuring on many markets in Asia’s Global Web Index reports, Asia hasn’t really warmed to Snapchat.”

Meanwhile, amid further claims its user base was falling, WPP nevertheless announced their plans to double their spending on Snapchat.

However, WPP boss Sir Martin Sorrell called this figure “a flea on the elephant’s backside” compared to Facebook, on which it will spend more than $2 billion in 2017.


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