Mobile

Snapchat's redesign reverses slump as user growth, ad revenue surge

  • Messaging app Snapchat\’s daily active user (DAU) base rose to 187 million in Q4 2017, in comparison to 178 million within the prior quarter, beating analysts\’?expectations by nearly 3 million, Snap Inc. executives told investors in the call Tuesday. DAUs rather than 2017 rose 18% with a year earlier, reversing a trend of slow growth to the advertising and marketing platform.
  • Advertising revenue grew 38% in the past months of 2017 from Q3 for your total of $281 million in Q4. Annual ad revenue climbed 74% year-over-year, said Imran Khan, Snap\’s chief strategy officer.
  • Much of the growth is a result of improvements manufactured to the Android type of the app, CEO Evan Spiegel said, or perhaps to a redesign of the app that rolled out into a users in November and separates professionally produced content from friends\’ posts. Spiegel announced how the redesign will launch to any or all users during Q1 this current year.

While Snap made significant gains in Q4 – final results impressed investors, sending the firm\’s stock soaring to heights it hasn\’t found in a little while -?it is still unclear whether the social app could become a real solution to Facebook and Google to be a digital advertising giant while in the months and many years to come.

Snap made efforts prior to now year to increase the standard of content and experience for users on its app, while removing some friction for advertisers. Brands continued to pay over the platform in 2017, reversing a slump that plagued the mobile app given it went public last spring. However, inside call to investors on Tuesday, Snap warned that brand spending, which frequently peaks soon after the entire year, could fall again in Q1 and lead to lower revenue to kick off 2018.

\”As the business has more scale, we feel year-over-year growth is the best metric to consider,\” said Drew Vollero, Snap\’s chief financial officer, while in the call.

More brands seem to have started into the social websites platform mainly because it launched pixel tracking in November to determine smartphone users\’ actions having looked at an advertisement, giving marketers stronger first-party measurement options.?

Another change that likely brought about a successful Q4 for Snap became a shift toward programmatic ad buying. That change helped reduce friction within the buying process, in addition to boost ad impressions on Snapchat by 4x year-over-year, Spiegel said. In Q4, 90% of the ads over the app were bought programmatically, that the company said signifies that the \”auction transition\” for Snap Ads is largely while in the rearview.

Despite total quarter for ad revenue, Snap must keep stay relevant while keeping focused on innovation to keep up its latest growth trajectory. A serious driving think about the wave of latest users, in accordance with Spiegel, could be the app\’s redesign that prioritizes social features like messages and Stories from friends over ads and other professionally produced content housed in the Discover section. The look only has released to 20% of users to date, but of those people, the cell number who voluntarily watched publishers\’ Stories in Discover grew by a lot more than 40%, Spiegel said.

Snapchat\’s app overhaul mirrors recent news from Facebook, which started off 2018 in an instant by announcing it could adjust its News Feed algorithm you prioritized posts from best freinds and family over that surrounding brands and publishers for much more meaningful social interactions on the platform. That news sent marketers towards a frenzy around the potential drop in reach.

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