Snapchat’s self-serve advertisements are paying off as revenue estimates improved for Q3.
Snap recently posted an increase in revenue of 43% year-on-year to $298 million whilst also reducing losses to $118 million from $325 million during the third quarter of 2018.
Evan Spiegel, CEO of Snap, said:
“The transition to self-service has allowed us to scale our sales efforts to smaller advertisers that we couldn’t initially reach.”
Over 85% of ad revenue was now transacted via the self-service, up from 35% just 12 months ago.
He further added that TV-style shows on Discover were now attracting a large number of viewers as well as publishers. Although criticised for its often click-bait content, Spiegel assured that Snap would focus more on premium content.
“Highlighted by these figures is the battle Snap has on its hands in the face of increasing competition, particularly from Instagram. According to consumer reports, Instagram has already overtaken Snapchat as the most used social media app among US teens following reports earlier this year that for the first time the number of people using its service on a daily basis had dropped. The lingering feeling for advertisers is this Snap audience does not offer the same ad potential as other social platforms,” commented Sophie Light-Wilkinson, VP Marketing, EMEA at Bazaarvoice.
“Interestingly the solution rests with advertisers as much as it does with Snap. The platform still maintains a stronghold of younger consumers and continues to launch innovative eCommerce features that give users a reason to stick around. Shoppable features such as collection ads, product catalogues as well as the visual search feature gives modern-thinking brands the opportunity to create shopper experiences that build full relationships with their customers.”
She warned that if Snapchat could not attract enough advertisers, the company would be facing acquisition.
Meanwhile, Snapchat lost 2 million daily active users during the third quarter, blaming the Android app design.