Snap User Growth Declines Yet Ad Revenue Rises
In spite of a disappointing earnings report, Snapchat maintains advertiser growth is booming.
Though Snapchat’s latest report revealed new user growth was 3 million below expectations, the company boasted a jump in advertising revenue of 146% year-over-year.
Many analysts now believe the rise in ad revenue comes as advertisers acknowledge Snap’s strong engagement with the valuable 13-24-year-old demographic.
Advertisers have recognised that targeting this demographic will form the foundation to build lifelong brand preferences.
This user market will then transition into the coveted 18-34-year-old sector, allowing Snap to offer a compelling ROI difficult to replicate.
It is expected Snapchat’s user growth will continue to soften, as Facebook continues its attack on the social media platform.
However, commentators (such as Bloomberg Intelligence) state that new user growth is now increasingly difficult to maintain as an accurate investor metric given the fierce competition Snap faces.
Notable social advertising agencies, as 4C Insights, also report that advertising in Snapchat continues an upwards trend.