Sep 7, 2016
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Snapchat forecasts $1 billion ad revenues for next year

Sep 7, 2016

According to a recent forecast released by eMarketer, Snapchat is on track to rake in nearly $1 billion dollars in ad revenues in the coming year.

“Advertisers are attracted to Snapchat for its broad reach among young millennials and those in Generation Z, which are valuable demographic groups for many businesses,” said eMarketer principal analyst Cathy Boyle.

According to eMarketer's study, Snapchat is tracking towards over $360 million in ad revenues this year and over $935 million for 2017.

Snapchat initially faced criticism for its advertising platforms but has since responded and revised its offerings.

“To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads, and more sponsored geofilters and sponsored lenses," explained Boyle.

Currently, Snapchat's "Discover" feature holds the highest ad revenues for the app in the U.S. with 43% of revenue coming from it. Next year, "Stories" will take over the leading source of ad revenue.

While almost a third of social network users in the U.S. use Snapchat, it only draws 2.3% of social network ad dollars in the country at the present time, in part due to having launched its ad platform only in mid-2015. Its biggest competitors are established brands like Facebook and Twitter, which have perfected how to geotarget and measure user data.

“Snapchat has improved its targeting capabilities and partnered with 11 measurement firms to address the concerns voiced early on,” said Boyle. She continued, “What it has yet to prove is whether it can consistently deliver a better return on investment for advertisers than other social networks.”

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