eMarketer lowers Snapchat's global ad revenue forecast for 2017
Several factors, including slower-than-expected user growth, have led eMarketer to lower its ad revenue outlook for Snapchat
Snapchat’s worldwide ad revenues will total $774.1 million this year but the growth is expected to be slower than eMarketer predicted a year ago. Although many advertisers remain on the sidelines, Snapchat’s ad products are tantalizing for some because of their creative capabilities, highly engaged user base and emerging reputation as an alternative to Facebook. Several factors, including slower-than-expected user growth, have led eMarketer to lower its ad revenue outlook for Snapchat.
In March 2017, eMarketer predicted Snapchat’s worldwide ad revenues to reach $900 million for the year. eMarketer expects Snapchat’s US ad revenues to total $642.5 million this year. That’s down from $770 million that eMarketer had predicted in March 2017 and from $805 million forecast in July 2016.
Snapchat is still on track to surpass Twitter in US ad revenues next year. eMarketer projects Snapchat will rake in $1.18 billion in revenues vs. $1.16 billion for Twitter. In 2019, Snapchat will pull well ahead, with US ad revenues that will nearly double that of Twitter’s. By comparison, Instagram is already well ahead of Snapchat in the US and will continue to widen that gap over the next few years. eMarketer estimates Instagram will bring in just over $3 billion in US ad revenues this year, rising to $6.84 billion in 2019.
Despite all of its improvements in ad products and measurement, Snapchat remains in the experimental bucket for many marketers. They give it high marks for its creative possibilities and its ability to attract a young audience, but many have yet to make it a must-buy.
Snapchat has made several ad product advances in the past year, notably the launch of a self-serve ad buying system as well as targeting and creative tools for direct-response advertisers. The platform now has 15 measurement partners.
Despite these advances, many advertisers remain skeptical.The viewpoints of marketing executives at Nestle are emblematic of the way many advertisers feel about Snapchat right now. As of March 2017, Nestle had conducted 40 ad activations in six markets on Snapchat, according to an article in The Drum. Despite the multiple tests, Pete Blackshaw, Nestle’s global head of digital and social media, wasn’t convinced. “We like to jump into relationships with platforms with a very strong learning plan,” he said in the article. “Once we have the confidence that a medium works, pays out and builds the business, we are all in, especially if Snapchat can continue to do that and continue to help us decipher the very complicated nature of our kids,” he said.
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