Does Snapchat marketing matter in 2019
Snapchat parent company publishes sales figures for 2019 - and disappoints investors
The instant messaging service Snapchat published the sales figures for Q4 2019 on Tuesday. After the US market closed, the group behind the app, Snap Inc., announced that there were significantly less advertising revenues than expected at the end of the year. In a year-on-year comparison, the company was able to improve and increase sales by 44 percent. Profit increased from $ 389.8 million to $ 561 million. The number of active users on Snapchat also grew to 218 million users compared to the previous quarter. That is a full four percent more than in Q3. Nevertheless, investors reacted disappointed. In the meantime, the share collapsed by a full twelve percent in after-hours trading.
Snapchat Ads: Advertisers want to reach the young target group
According to the market research company eMarketer, experts are expecting global advertising revenues of US $ 1.53 billion last year. Although total revenue was rather disappointing for many investors, Snapchat stated that advertising revenue had tripled in at least Q4 compared to the previous quarter. However, the company does not give a specific number. Despite the stock slump, many experts are optimistic about Snapchat's future as a result of this development. Debra Aho Williamson, Senior Analyst at eMarketer, said:
[...] the growth of its ad business shows that marketers want to engage with its youthful audience. Snap has also been a standard bearer when it comes to new ad formats, such as augmented reality advertising, and those features are attractive to some advertisers. Regarding user growth, user gains were strong in 2019 outside of Snap’s core US and Europe regions, probably aided by the revamped Android app.
What do Snapchat sales numbers mean for the future?
Eight million new users gained, however, cannot make up for the loss of $ 240 million compared to the previous Q3 in 2019. Compared to Q4 in 2018, Snapchat is expanding its net loss by as much as $ 49 million. For the full 2019 fiscal year, Snapchat posted a loss of $ 1.03 billion. The future of the photo app seems uncertain. Because despite the successful introduction of Instagram Stories and its own redesign, which, however, did not go down well with the users, Snapchat got a boost and the number of users rose. A total of 31 million users were added last year.
New features for advertisers on Snapchat
Compared to Instagram with over a billion daily active users in 2019, Snapchat is a small fish with 218 million users. The social media pioneer is therefore constantly working on new features to make Snapchat more attractive for advertisers. The platform also announced that it could now win Coca-Cola and McDonald’s as brand partners. US corporations are the first advertising partners to use Snapchat's new scanning technology. The report says:
[...] McDonald’s and Coca-Cola are our first brand partners to utilize our Scan camera technology, which combines visual search and augmented reality by recognizing a logo through the Snap camera and providing related AR experiences.
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