Explosive growth predicted in Snapchat ad revenues: eMarketer
EMarketer's first forecast for social media platform, Snapchat, predicts ad revenues will see explosive growth reaching $935.46m in 2017 with 25% expected to come from outside the US by 2018. After attracting criticism at the outset, Snapchat has become popular with millennials and Generation Z making it attractive to advertisers and businesses; it uses video ads and other tools that directly appeal to this audience which is harder to reach through traditional marketing channels. While it boasts 31.6% share of social network users in the US, Snapchat currently only captures 2.3% of ad spend on social media and needs to prove it can consistently offer better ROI for advertisers to compete with established platforms like Facebook and Twitter.

In Snapchat’s 2022 Q4 earnings report, the company announced that its platform had 375 million daily active users (DAUs), beating the expectation of 374.7 million—a 17% year-over-year increase.

Since Snap competitors have the company beat in terms of performance or brand awareness, the company will have to up its innovation efforts to continue to grow amid market challenges.

Do you work in the Advertising, Media, and Marketing industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.

Snapchat delivered its fourth-quarter earnings this past Tuesday after markets closed. The results not only shined a light on the current status and future potential for the social platform, but it also provided insight on the health of social media platforms as a whole.

Here, we look at Snapchat’s user trends, delving into new advertiser and creator opportunities—and how current market challenges as well as competitors’ efforts are impacting the company’s global growth.

How many users does Snapchat have?

In 2023, Snapchat will have 525.7 million users worldwide, up from 493.9 million users in 2022.

Snapchat’s user statistics

Snapchat posted notable user growth in Europe in 2022, per the firm’s quarterly reports. This was due in large part to the success of their immersive augmented reality (AR) experiences during the FIFA World Cup, as well as the excitement they have built around Snapchat+—a paid, enhanced version of the platform. Looking ahead, it seems that this growth will continue, as almost one-quarter of internet users in Western Europe will be Snapchat users in 2023.

Like what you’re reading? Click here to learn more about Insider Intelligence’s leading Advertising, Media, and Marketing research.

Snapchat’s user demographics

Snapchat has been known as a space where young Gen Z social media users have fled in hopes of escaping their parents who are now on Facebook.

It appears that this generation is sticking with the app, as Snapchat will remain Gen Z’s most popular social platform through 2023. However, TikTok will narrowly overtake Snapshot in users in 2024, scooping up 82.5% of US Gen Z social media users, as opposed to Snapshot who will have 82.3%. This gap is expected to increase in 2025, and Instagram will also beat out Snapchat’s users that year.

Marketing and advertising opportunities on Snapchat

Snapchat is leveraging its unique augmented reality (AR)-based advertising capabilities to entice marketers looking to engage customers and personalize their shopping experience. New features such as AR image processing not only give shoppers a better sense of what a product looks like, but also encourage users to interact with a brand.

What’s more, Snapchat’s AR tools could make the platform an attractive collaborator for companies looking to establish a retail presence in the digital realm. In May 2022, Snapchat released a suite of AR tools to help businesses simplify asset creation and give users more ways to optimize product discovery.

In 2023, Snapchat is already working on the next iteration of its Spectacles AR glasses, and aims to have its augmented reality (AR)-based advertising account for 10% of its overall ad income.

Snapchat’s emerging competitors

Despite Snapchat’s popularity among the Gen Z demographic, competitors like BeReal are gaining traction with this audience, based on a comparison of fall 2022 Piper Sandler survey data with our forecasts. In 2023, additional startups that appeal to younger generations—including Fizz, Gas, and Geneva—will gain momentum by allowing users to connect in small, intimate circles.

As 60% of US teens believe feeling “welcome and safe” online is of higher importance than having a space where they can speak freely, per research conducted in spring 2022 by Pew Research Center, we might see Snapchat and other leading social players evolve their strategies to contend with younger rivals that are gaining steam.