There’s been a lot of news surrounding Snapchat more recently. It seems the popular picture messaging is on a roll and just this week said it would aim to generate between $300m and $350m in revenue during 2016, according to sources familiar with the matter. Investors had previously put an enormous $16bn valuation on Snapchat and the company has been working hard to revamp its ad offering.
Snapchat predicts $300m in revenue
However, revenue is hard to predict given how new Snapchat’s ad business is. In addition, products are still evolving which could boost or cut revenue estimates.
A source told Re/code that the company generated a $100m revenue run rate in Q4 2015. Snapchat did not comment on the matter.
The company’s ad offering includes Discover, which lets publishers craft content and engage with the app’s users. Live Stories allow advertisers to create montages of photos and videos. Local provides marketing opportunities based on user location.
In addition, its cooperation with Nielsen adds enhanced targeting features such as demographics as well as improved measurement to campaigns.
One way in which Snapchat could accelerate ad revenue growth would be to build a self-serve platform, similar to what Facebook does. This way, the company could benefit from smaller publishers and businesses too. 69% of smaller US businesses are now utilising Facebook Pages in order to advertise their products and service, helping to accelerate the social networks ad revenue to $5.8bn Q4 last year.
However, allowing just anyone to advertise may not be the strategy that Snapchat is gunning for. CEO, Evan Spiegel, previously confirmed that the company was trying to carefully balance what users want with advertiser expectations.
March 8, 2016