Snap paid publishers more than $100 million a year ago
- Author: Zachary Reyes Feb 09, 2018,
Feb 09, 2018, 17:00
Snapchat's interface update has rolled up to more users overnight and the majority appear to be unsure over the social app's new direction. Though these "zero-rating" deals can be controversial for net neutrality reasons, they can make it much easier to recruit users.
Snap made efforts in the past year to improve the quality of content and experience for users on its app, while also removing some friction for advertisers.
The parent of communications app Snapchat (SNAP), which has been struggling since going public in March, reported revenue of $285.7 million, beating Wall Street estimates of $252 million and surging 72% from the year-ago quarter.
Spiegel explained the changes to investors: "Our advertising business changed profoundly over the past year as we migrated the sale of our Snap Ads to an automated auction".
Snapchat is banking on smaller businesses to advertise on its platform as ad revenue has almost doubled in that market.
The hope is that Snap will grow into its expectations.
This increase dwarfed the company's initial $17 IPO price, despite analysts expecting its 74 per cent year-on-year quarterly revenue to begin levelling off as rivals such as Facebook start taking lumps out of its business. And the share price soared up 21 percent in response. "But it was only one quarter, one quarter a trend does not make". "This is important because Snapchat can be more fun to use out in the world rather than at home on Wi-Fi", Spiegel said. He believes the strength was driven by small- to medium-sized businesses.
"Our business really came together towards the end of previous year", Spiegel said in remarks prepared for a conference call with analysts. The stock was sold at an average price of $13.30, for a total value of $332,500.00. However, Snapchat expected some relief by seeing more advertisers bidding on ad space.
Several institutional investors and hedge funds have recently added to or reduced their stakes in SNAP. But that is changing.
Canaccord Genuity analyst Michael Graham also noted progress in the Snap ad auction platform, but he said that auction density is the key question for this year.
The self serve platform allows brands to buy ads without dealing directly with Snap's sales team or third parties.
Snap spends a ton of money and the company is still not profitable. But as the automation of Snap Ads has shown, that's not necessarily a bad thing for Snap's ad business - assuming that Snapchat's audience continues to grow. He has reported for Advertising Age, Adweek and Direct Marketing News.
The new feature should come in handy for users who want to stop receiving notifications from certain friends, but do not want to sever connections with them on the app.